In a study produced by the Global Innovation Policy Center for the U.S. Chamber of Commerce, global online piracy costs the U.S. economy at least $29.2 billion and as much as $71 billion in lost domestic revenues each year.

While this figure is significant, it doesn't take into account the annual losses to the U.S. economy in jobs and in the reduced gross domestic product (GDP). The report estimates digital video piracy results in between $47.5 billion and $115.3 billion in reduced U.S. GDP per year along with losses of between 230,000 and 560,000 jobs.

To be sure, media companies have taken steps to protect their content from piracy, but this has not been enough to fully cut off the process. Now, analysts have speculated that blockchain technology could potentially play a role in the control of this content and the protection against piracy going forward.

Key Takeaways

  • Digital piracy costs the U.S. economy an estimated loss of domestic revenues of at least $29.2 billion each year, along with an estimated reduction in gross domestic product (GDP) between $47.5 billion and $115.3 billion.
  • Using blockchain technology could be one strategy to help in the effort to halt digital piracy.
  • In theory, a blockchain Internet and distributed ledger technology (DLT) could help prevent pirates from hiding their unlawful piracy activities online.
  • Companies are already using blockchain to prevent piracy through content surveillance and digital watermarking.

Blockchain as a Player in the Fight

While blockchain is unlikely to be able to address piracy fully on its own, blockchain technology could be best put toward this cause as one component of a larger effort to stop piracy.

Part of the reason for this is that there are many potential reasons why piracy takes place, and experts have yet to arrive at a definitive explanation for the practice. Various factors like cultural norms, lack of access, unaffordability, and even a general view of media content as not having inherent value can all contribute to piracy activities.

In theory, if the Internet were built on blockchain technology, it could become impossible or, at the very least, extremely difficult for pirates to unlawfully share and profit from media content. The reason for this, presumably, is that a blockchain Internet would allow for the tracking of unlawful actions via distributed ledger technology (DLT). Individuals would not be able to hide their piracy activities as they can now. However, a blockchain Internet remains speculative.

26.6 billion

The estimated number of viewings of U.S.-produced movies that are pirated digitally each year.

Content Surveillance

One way that blockchain can help to prevent piracy at this stage is through content surveillance. Vevue is a blockchain streaming service developing a technology to track the life cycle of media content. Founder Thomas Olson has indicated that "if someone copies content tracked by our technology by any possible means, including videoing or recording a screen, our platform will be able to identify the owner of the device/system where the content was last played."

In this case, blockchain itself does not track the content; this is dependent upon a unique computational process inherent in Vevue's project. However, blockchain would allow the surveillance data to be stored and shared efficiently. Put another way, blockchain is a record that Vevue's team can use to assist in the tracking actions of its proprietary technology.

Bounty Hunting

Blockchain can also help with the process of digital watermarking, a process akin to bounty hunting. South African company CustosTech has used the bitcoin (BTC) blockchain to build a proprietary digital watermarking technology. This technology allows the embedding of a monetary reward, like BTC tokens, in media files. These watermarks are embedded in such a way as to be imperceptible to the content receiver and impossible to remove. If a file is pirated, CustosTech can analyze the watermark for that file to determine who the legal recipient of the file was.

The fact that a monetary reward can be encoded in the process as well could serve as an incentive for those outside of the media space to help find pirated files. Indeed, CustosTech's bounty-hunting program is available to anyone. By helping to track down pirated files, hunters can earn rewards in BTC.

The idea of rewarding users with cryptocurrency for their assistance in fighting piracy translates to the project of Rawg, a cross-device game discovery platform, as well. This company is aiming to create a blockchain system that rewards video gamers with cryptocurrency tokens for achievements they earn in the game itself. Gamers are only able to synchronize their achievements for token rewards with non-pirated games and on official platforms. In this sense, Rawg is not offering a bounty-hunting reward but rather an incentive for gamers to avoid piracy on their own.

Many other projects are exploring the anti-piracy space and using blockchain technology. Are they likely to fully eradicate the practice? No, but they very well may help to reduce the amount of revenue lost as a result.