Traffic to pirate websites that provide live streaming video of TV channels climbed 61% from February 2011 to February 2012, representing the fastest-growing segment of copyright-infringing Internet sites, according to a study commissioned by Google and U.K. music industry association PRS for Music.
The study also found that 86% of copyright-infringing websites rely on advertising from companies "outside of the mainstream." Overall, about 36% of pirate websites have payment pages accepting credit cards.
The study, conducted by BAE Systems Detica, identified six distinct business models behind online copyright infringement: live TV gateway; P2P community; subscription community; music transaction; rewarded freemium; and embedded streaming.
Compared with the 61% growth to live TV pirate sites, P2P community sites grew 17% from 2011 to 2012. Over the same period, traffic to music transaction sites dropped 19% and embedded streaming sites (which allow users to stream content that others have uploaded) fell 33%, the study found.
The live TV gateway websites -- most of which are located in the U.S. -- offer links to streams of live free-to-air and pay TV. The segment generates "mid-high" volume relative to the other segments with up to 1.1 million unique U.K. users per month on one live TV streaming site alone, according to the report.
Of the live TV sites, 67% have ads and 86% of those ads are served by networks not affiliated with the Ad Choices scheme. The "Ad Choices" scheme is administered by the Internet Advertising Bureau (IAB) in the U.K., and ad agencies must sign up to be included.
"Our research shows there are many different business models for online infringement which can be tackled if we work together," Theo Bertram, Google's U.K. policy manager, said in a statement. "The evidence suggests that one of the most effective ways to do this is to follow the money, targeting the advertisers who choose to make money from these sites and working with payment providers to ensure they know where their services are being used."
For the study, BAE Systems Detica compiled a list of more than 1,000 sites from copyright holders that they believed to be significantly infringing copyright. Those were winnowed down to 257 sites based on popularity and to maintain a representative sample. The report does not disclose which sites were evaluated.
The full report can be downloaded at www.prsformusic.com/aboutus/policyandresearch/researchandeconomics.