Slippery Statistics Suggest Online Piracy Is on the Wane

Sandvine has released a new report on global Internet traffic that points to the growth of online data consumption and implies that the increasing use of legitimate content services such as Netflix may be softening the impact of illegal P2P file-sharing.

At face value, that seems difficult to believe.

“Online piracy is booming by any measure,” industry analyst Jeff Kagan told the E-Commerce Times. “I don’t see how anyone could conclude it’s not.”

The first set of statistics in the report are straightforward. Internet data usage is surging. In the past year, it increased by 120 percent — from 23 GB to 51 GB — on North American fixed-line networks.

Netflix dominated North American fixed networks, accounting for 33 percent of peak-period downstream traffic. Other video services on North American fixed networks took up traffic as well, but nothing close to what Netflix users consumed. Amazon accounted for 1.8 percent of peak period downstream traffic, while Hulu claimed 1.4 percent and HBO Go pulled 0.5 percent.

Wait, What?

The notion that these services may be having an impact on online piracy and illegal file-trading comes from Sandvine’s finding that BitTorrent’s percentage of online data consumption declined. It accounted for 16 percent of total Internet traffic in Europe and 12 percent in North America. In the Asia-Pacific region, where there are fewer paid over-the-top video services available, BitTorrent accounted for 36 percent of total traffic.

So, does that mean fewer people are using torrents to share content? Not so fast.

“Netflix has always accounted for a very surprising amount of Internet traffic,” observed Kagan. “I simply I don’t see how a company like Netflix can have any effect on discouraging online piracy. Online piracy is a very large and rapidly growing problem.”

The Truth About Torrents

In fact, a deeper drill-down into the Sandvine report reveals that BitTorrent traffic increased by 40 percent in North America over the past six months, according to TorrentFreak, and the fact that its traffic now accounts for a smaller share of total Internet traffic is simply explained by the Internet’s overall growth.

“It’s worth pointing out that it’s incredibly easy to interpret a single data point in many different ways,” Richard Mooney, managing partner of Essence Digital, told the E-Commerce Times.

There’s nothing to establish a causal connection between greater use of Netflix and BitTorrent’s declining percentage of data streamed on the Web.

Dueling Statistics

“I would argue that it’s very dangerous to conclude that piracy is declining just because Netflix accounts for 33 percent of bandwidth and BitTorrent accounts for a smaller percentage of traffic in a culture that is consuming more and more digital content each day,” Mooney said.

It’s worth noting that a significantly higher proportion of 18-to-29-year-olds believe it’s reasonable to share files with their family and friends, upload files to sites where people can download them, and also post links to unauthorized files on websites such as Facebook, said Mooney, pointing to a recent report from the American Assembly. That research further indicated that members of the same age group purchased significantly less of their existing music libraries.

“So, with such perceptions and behaviors firmly set in the next generation,” said Mooney, “I think it’s safe to say that piracy will remain a source of entertainment for many years to come.”

New Platforms

On the other hand, the continued evolution of digital platforms that allow users to legally buy media is bound to have an impact on user perception and behavior, Mooney acknowledged.

“The American Assembly also found that those that are most likely to illegally share files through P2P sites are also most likely to purchase digital content,” he pointed out, “so it’s incredibly important for the industry to understand what drives this audience to buy versus illegally download content in a bid to shift behavior.”

Sandvine did not respond to our request for further details.