Blog , 06 Nov 2019

Can Hosting Providers Help Improve Customer Profits?

Tobias Knecht,

Founder and CEO, Abusix

The internet has been called the paramount innovation of the 20th century. It has certainly been a game-changer for many companies around the world. However, the internet has had some far-reaching consequences for the legal owners of copyrighted material. Internet piracy affects these copyright holders economically, but it can also affect their reputations. In recent years, an increasing number of groups, associations, and corporations have begun fighting the pirates by exerting pressure on ISPs that do not block sites that are guilty of copyright infringement, and the pressure is likely to worsen. Naturally, the issue of blocking has been hotly debated, but there has been little agreement among ISPs, the courts, and copyright owners. However, a study conducted in the United Kingdom at Carnegie Mellon University indicates that ISPs and their customers could benefit from proactively fighting copyright infringement.

Researchers at CMU studied what happened after court orders were issued to force ISPs in the UK to block individual websites that heavily facilitated copyright infringement. Since 2012, more than 100 sites and several thousand mirrored and proxy sites have been blocked. Most of these sites were peer-to-peer or streaming sites, but some sites were guilty of trademark infringement, including sites that sold counterfeit products. The results indicate that piracy decreased overall. Furthermore, legal subscription sites saw their usage increase by up to 12%.

However, the study also found a link between the number of pirate sites blocked and the benefits received by the legal sites. When a single site was blocked in 2012, users simply increased their visits to other pirate sites that remained unblocked, delivering no measurable benefit to the legal sites. However, when 19 pirate sites were blocked in 2013 and 53 in 2014, legal sites increased their number of new subscribers as well as their usage rates.

The conclusion drawn by the researchers was that the effectiveness was tied to the degree of the disruption. When only one or two channels were disrupted, users could quickly turn to unblocked sites and VPNs. However, when many channels were disrupted, people were forced to spend time and effort to locate another site, explore it, and learn to use it. The alternative was to subscribe to a legal site and pay the monthly fee.

The study did have some limitations. One is that only legal sites that charged a fee were included for measuring the legal use of media, but legal consumption can occur on sites that do not charge users a fee. Another limitation is that the study only examined consumer behavior for three months following each round of blocking, so it is impossible to tell the longevity of the impact.

Regardless of any limitations, the results found by the study are intriguing. Although it is possible for the customers or subscribers to receive an economic benefit if their ISP blocks infringing websites, the study does support the need for ISPs to do their part in the battle against piracy. Furthermore, taking a proactive stance against copyright infringement could potentially bolster an ISP’s defense if it is named in a lawsuit. Recent court cases have made it clear that an ISP can be named as a codefendant, found vicariously liable, or found guilty of contributory liability. The waters of the safe harbor are becoming increasingly rocky and treacherous, so every ISP must make adjustments to ensure the most protection possible. Although it would certainly be nice if all internet pirates would voluntarily refrain from infringing on another’s copyright, that is not going to happen in the immediate future. Pirates invest little in their enterprises, but they can reap substantial monetary rewards. With the ability to operate from virtually any country and hide behind multiple identities, these pirates have little incentive to abandon a lucrative enterprise.

If you have questions, contact Abusix to learn more about the solutions that we offer ISPs and hosting providers. We have a chat feature and contact form on our website, but you can also email us at info@abusix.com if you prefer.

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