A panel session about brand-sponsored piracy featuring the BPI and Interactive Advertising Bureau? Haven’t we been here before? Yes, in May 2013 actually: that conference saw Google and musician David Lowery in the mix too.
There were unlikely to be quite as many sparks today at the Copyright & Technology conference in London, with no Google. But the panel promised an interesting debate nonetheless with Geoff Taylor from the BPI, Nick Stringer from the IAB, Nick Swimer from law firm Reed Smith, and consultant Jeremy Penston. Music Ally boss Paul Brindley was on moderation duties.
Brand-sponsored piracy? That would be big brands’ display ads appearing on (and thus funding) sites devoted to online piracy. It’s an increasingly controversial issue within the music industry, as well as other creative industries. But how big a problem is it really, and what’s being done to tackle it?
“If you look at what funds piracy, it is largely advertising,” said Taylor. “The most popular sites are torrent sites, which are typically funded through advertising, and they do very well. There was some discovery from the Pirate Bay case with one email showing they were being offered £60,000 by a gambling site to put ads on the Pirate Bay.”
He admitted that the overall problem can’t be solved, because some brands from other countries will always be willing to advertise on these sites. Taylor also said that with hundreds of intermediaries involved, the online advertising space is a lot more complex than many music rightsholders would think.
“Before this issue started becoming part of the currency of debate in this area, brands were very complacent about this. They thought this was a very cheap way of reaching a good demographic: young people, interested in music, quite an attractive audience. And they didn’t really think through what was happening.”
He suggested that these sites were leeching off the brands – seeming reputable because they had recognisable brands advertising on them – and were actually damaging the brands, citing a study conducted by online security firm McAfee: “The sites that distribute unauthorised content: 59% of them had porn, 12% had malware, 7% were closely associated with known criminal gangs, and a lot of them were trying to scam personal details,” he said. “They are something that will ultimately do long-term damage to the value of the brand.”
The BPI has been running a pilot with the IAB that has shown “encouraging” progress – a reduction in the appearances of well-known brands on sites targeted, and a change in the nature of the ads: “We’re seeing a much higher percentage of the ads that are served are for gambling, adult dating sites and other fairly unsavoury types of ad, which creates a different image in the minds of consumers.”
Taylor admitted that it took time for the BPI and music rightsholders to understand how best to approach the issue of big brands’ ads appearing on piracy sites.
“Some of the fault was on our side: we were trying to talk to the individual brands, and they would often feed back ‘we didn’t know our ads were appearing on those sites’. We didn’t understand the internet advertising space as well as we maybe should have done,” he said.
Over to the IAB’s director of regulatory affairs, Nick Stringer, who said there is now consensus around the best approach to take. “The IAB wants to help tackle this issue: brand advertising facilitating legal content, and we want to promote legal ad-funded music services,” he said. “We want to promote advertising to support those services, and we don’t really want to support the content and services that are undermining those business models. That’s absolutely crucial.”
He went on to suggest that what’s really important to understand is that brands don’t always know where their ads will end up, but the reputable big-brand advertisers don’t want to be associated with inappropriate and illegal content or services.
“The ad industry is putting in place some good practice which injects some transparency into this trading of advertising. It’s brands having more say and control about where their ads are ending up,” he said. These measures aren’t just about illegal services: it might be a big brand not wanting its ads to appear on sites for lad mags, for example.
“Were really targeting the big brands… the BAs and the Tescos, but there are elements of the advertising world that, let’s say, advertise less decent products. We can’t always control that, we’re not going to eradicate the problem. We’re trying to minimise the risk of ad mis-placement and give brands control over where their ads end up,” he said. “A lot of IAB members want to do the right thing… It’s not always easy for the ad industry to know what an infringing site is, but I believe this approach will make a significant impact.”
Over to Jeremy Penston, who wrote a report called Six Business Models of Copyright Infringement that’s been influential in the debate around brand-sponsored piracy. He agreed with Taylor that most piracy sites now make their money from ads.
“Every pound that goes to a pirate website in advertising pounds is a pound that might have gone to a legal website if that pirate website had not been there,” he said, showing a slide of The Pirate Bay in 2011 with banner ads from Mazda and Orange placed by an legitimate ad-tech firm called Flashtalking.
“It’s a false green indicator to consumers who come to these websites, see these ads and think ‘this must be okay’,” he said, before showing a screenshot now, where the ads appearing on The Pirate Bay are for scammy-looking “get-rich-quick schemes… as a consumer you suddenly start getting these warning signals, the red light”.
He talked about the report, and its findings that copyright infringement is a business, not an altruistic movement around sharing. “63% relied on advertising in one way or another,” he said. “By calling a piracy website a business, you start to think of it differently, you start to think about how you challenge that business model, and who wants to be associated with it.”
Next was Nick Swimer from Reed Smith to give the legal perspective on the brand-sponsored piracy debate. What role is there for government and legislation in this? He started by talking about the prevalence of the problem through stats: Google sys there are more than 150,000 piracy websites, while a recent Screen Digest report suggested that a quarter of bandwidth used in North America, Europe and Asia goes on pirated content.
“Advertising is their lifeblood: it’s the thing that powers these websites. It is a significant problem,” he said, pointing out that rightsholders are starting to bring proceedings against ISPs to require them to block infringing sites, if they’ve been demonstrated to be infringing “on an industrial scale”.
He cited claims from those cases about the money being made by the piracy sites: “KickassTorrents, according to the expert evidence, generates in the order of $12m-$22m a year,” he said, before citing another case involving a site called FirstRow which live-streams Premier League football matches. “They believed that site was generating between $5m and $10m a year.”
Swimer even suggested there could even be lawsuits in the offing. “Unless the advertisers take greater steps and don’t just say ‘it’s complicated, it’s programmatic purchasing of advertising, there’s lots of intermediaries, you can see a scenario where a rightsholder will say enough’s enough and bring a case against an advertiser,” he said, suggesting that the crime would be aiding and abetting infringement. “It would be extremely tough,but you could see an advertiser saying ‘we’re going to give it a go’.”
Could Taylor see this happening: a legal basis for taking action against advertisers? “Most of the brands who are reputable companies are working with us quite positively. We don’t want to get into discussing legal threats with them. It’s not the right approach because they want to get to the same place we do,” he said.
“There are, obviously, ad networks that are not in the same category, and operate frankly in pretty flagrant disregard for ethics as well as the law. That category of advertisers and ad exchanges and networks, maybe you can conceive the possibility of that kind of action… But one of the other difficulties here is the multi-jurisdictional nature of it. It’s not that easy to consider taking action in Russia or some of the other countries you’d have to go.”
He also suggested that Stringer’s suggestion that advertisers can’t tell what illegal sites are is “absolute rubbish”, claiming that browsing Google’s transparency reports for takedowns provides all the necessary evidence of infringing sites. Stringer retorted that this is about automated processes: “it’s machines talking to machines, and they don’t always think in the way that humans do,” he said. But this is what the IAB is working to factor in to those automated processes.
Taylor talked about the BPI’s project with the IAB, which is helping it to understand where the problems are in the online advertising system, including understanding which networks are serving most ads into piracy sites.
The panel session continued with a discussion of Google: is the company playing ball more now in this area? “You’ve got to distinguish between the different areas of Google’s business. In advertising they’ve shown a lot of intent to take part in the IAB product,” said Taylor. “Obviously there’s a big issue with search. They promised to fix it a year ago, and they haven’t fixed it… Once you’ve been told 2m times that a site’s illegal, why are you putting it above Amazon? It’s time they supported legal business rather than illegal business.”
He continued: “They told everybody they’d done it, August 2012 they announced that they’d changed their algorithm… It’s just that it doesn’t work. It works for a general search, in fairness: if you search for Coldplay, the results are better than they were two years ago. If you search for Coldplay Paradise Download, the results are not materially better,” he said. “We think you should get Amazon, iTunes, 7digital, Spotify, all the other legal services on the first page.”