This industry has become a worldwide phenomenon, generating incredible losses to those who legally issue it through subscriptions. Thus, NAGRA wanted to see the penetration of this type of content in the United States. The report has been prepared together with the Digital Citizens Alliance, funded by Hollywood, so it could not be 100% objective.
$ 1 billion: the money generated by pirated IPTV in the United States
The report, called «Money for nothing«, States that pirate IPTV generates $ 1 billion per year in the form of subscriptions only in the United States. This figure is four times higher than the income of the largest company in the world, Apple, which in 2019 earned 260,000 million dollars.
That figure does not take into account the operating costs of these platforms, such as paying for servers or buying media players that include the links. Subscription prices vary widely, ranging from $ 2 to $ 25 a month, although most range from $ 10 to $ 15. On average, they have chosen the conservative figure of 10 dollars a month, or $ 120 a year, although they typically lower prices for such long-term subscriptions. Researchers estimate that some 9 million households have a pirated subscription in the United States, which is equivalent to about 30 million people, or 9% of the country’s population.
The study also analyzes the sales structure, where normally a store or portal buys “credits” from a wholesaler, who is in charge of managing the servers. Sometimes the network is fully integrated, and feeds are obtained, proprietary technology is developed, and own servers are used. They can also even collaborate with other wholesalers to have more channels.
There are also “legal” companies that help them operate
NAGRA estimates that there are some 3,500 pirated IPTV websites, social media pages, and stores in the United States. There are platforms that can have 100,000 users, generating millions of dollars of revenue. Even a platform that sells subscriptions for $ 10 a year with only 5,000 subscribers may be making $ 600,000. If the cost of maintaining these services is discounted, the net benefits can be about $ 265,000 per year, since the income is not reported to the Treasury.
As for wholesalers, it’s not uncommon to find some with 30,000 subscribers through retailers, where each additional connection “credit” costs about $ 6 per subscriber per month. Eliminating operating costs, they may be entering $ 1.35 million annually, with a profit margin of 85% and without paying taxes.
NAGRA also complains that there are legal companies involved, such as payment platforms, CDNs, hosting services, social networks, etc. Among them, they allow them to operate as payment services, in addition to advertising them to bring them closer to users.