In 2009 we conducted a study of online distribution of pirated media.  The questions were: “How do they make money?”, “Why do the sites survive?”, and, “Who pays the operators?”.  The answers were strange, and changed noticeably over the course of a single year.

The pirate media distributors stream their wares out of server farms on sovereign native people’s territories in the West, and in Sweden, Ukraine, and China to the East.  Using legal loopholes, bribery, and protection from mob and government interests, the sites not only survive, they thrive and propagate.

Often it seemed there was hardly any money making involved, where it begged the question why so much time was being spent mounting the pirated materials beside the distribution of malware to steal private data.  Ad revenue visibly increased every month, however.

22% of studied pirate streams had ad placements for major corporate interests on Jan 1st, 2009.  By June major corporate placements had gone to 39.5%, and by September, 52.5%.  By Jan 1st 2010 it was 91%. It is what the slaves to cliche call a tipping point.

A man only identified as Hans, working out of a native people’s zone server farm in Canada, said his site had increased ad revenue in the year from €275,000 to €1.4 million.  With this increased revenue stream, he said he had stopped taking paid malware trojans which had earned his outfit an additional €320,000 annual previously.  This suggests that corporate advertising is making the watching of pirate media sites more attractive on several levels.

At first I was surprised to see World of Warcraft ads.  Later, I was shocked to see Visa, Bing, Liberty Mutual, and many other large MNC utilizing the pirate sites for advertising.

Really, when a customer goes to watch a TV show or film, and sees a Visa ad up front, can they not assume it is a legitimate broadcast of material?  Finally, Pillsbury, Sprint, Coca-cola, H and R Block, and most strangely, upcoming film promotions joined the fray… begging the question, who is at fault now?

The second shock we received in the study was the quality of the pirate sites over the big broadcasters sites.  29% of the time major broadcasters sites would fail when I attempted to watch shows on their sites.  In fact, 21% of the time their crash would crash my browser.  This compared to 7% stream failure rate on the pirate sites.

We would attempt to watch shows using OSX 10.5.4 on FOX, ABC, and USA Networks, and the failure rate would drive me to test the same program with rare problems on pirate sites.  How can the pirate sites deliver better service and technical expertise?  Presumably the answer lies with the money they get from large corporate funders.

As 2009 neared it end, the biggest advertiser on ’sidereel’ and other pirate link consolidators was ATT.

The East Coast Ledger is still awaiting responses from the advertising corporations or the film industry giants, the representatives of whom we spoke to only saying they were ‘astonished’ at the studies findings.  We will publish any full responses we receive here.

It seems only William Gibson understood the future.