In the summer of 2018, a report by anti-piracy company Irdeto examined the payment processing capabilities of 400 pirate IPTV provider sites. It found that the majority (76%) were openly advertising their payment options with Visa, Mastercard and PayPal leading the way.
Irdeto's strong message was that such payment processors should support legitimate media organizations by doing better due diligence and stopping support for pirated streaming services.
"If media organizations threaten to vote with their feet against payment platforms that allow piracy, it will be fascinating to see who blinks first," the report says.
at the moment when we asked if this type of threat was the best way to achieve change. Now, more than two years later, the tone seems to have smoothed out a bit while still carrying a serious message.
Payment processor brand Pirates Expolit
While it has a lower public profile than the Alliance for Creativity and Entertainment, the Audiovisual Anti-Piracy Alliance is clearly a force to be reckoned with. The anti-piracy group currently has 30 members, including tech companies Irdeto and Nagra, as well as content owners and broadcasters such as BT, BeiN Sports, DAZN, LaLiga, Premier League and Sky.
This week, the group raised the issue of payment processor support for pirated IPTV providers again, but it posed things a little differently. According to AAPA, among other things, the inclusion of payment processor logos on payment portals gives them an air of legitimacy while damaging the processor brands.
โFrom a hacker's perspective, they want consumers to pay for the services they offer. Their professional-looking websites already mislead many unsuspecting consumers into thinking they are a legitimate provider. This appearance of authenticity is reinforced by hackers who often use multiple services from well-known payment providers to facilitate the purchase of subscriptions, โreports the AAPA.
The underlying suggestion is that the emergence of brands such as Visa and Mastercard allows not only payment processing, but also generates an increase in consumer confidence for illegal services. The big question then is how the situation has changed since the 2018 Irdeto report.
Improvement from 2018, but not enough, says AAPA
In 2018, of the sites that openly published payment methods, 21% offered Visa, 21% Mastercard and 14% paid through PayPal. Since then, AAPA says it has engaged with all three companies and, according to a study by its Disruption Working Group, PayPal now ranks first with 17.3%, Mastercard with 14.7% and Visa very close with 14.1%.
โThe question for the payment services industry and legislators is how do so many websites get away from preventive measures, some of which are legal requirements like anti-money laundering regulations? Of course, any ex-ante system is not airtight and can be circumvented, but the evidence suggests that much more needs to be done. But by whom? asks AAPA.
AAPA's Commitment to the 'Big Three'
Despite the fact that PayPal is now the largest player in the IPTV market according to AAPA's own study, the anti-piracy group does not express any criticism of the payment processor.
โPayPal and AAPA have a long-standing relationship. PayPal is committed to finding a viable solution to combat the impact of piracy on the industry and on its brand. Issues are discussed openly and constructively, โsays AAPA.
Visa also receives modest praise, albeit with slight reservations.
"From our interactions with Visa, we know that they have very strict internal procedures," writes AAPA. "These procedures may include multiple cease and desist notices and may require proof through a trial [IPTV] purchase. All of this takes time while piracy continues unchallenged. Visa, of course, is protecting their rights and interests, and AAPA members are doing the same, โsays the group, asking for compromises to find a middle ground.
As for an assessment of Mastercard's efforts, AAPA says it is "a little early to tell" with the suggestion that meaningful cooperation has yet to begin in earnest.
Opportunities to improve
Overall, AAPA feels that the way forward for all processors is to be more vigilant when it comes to due diligence matters, preferably reinforced and monitored by a third party or a memorandum of understanding. Proactive monitoring to ensure proper compliance with processor terms and conditions is also high on the list of requirements.
Referring to a discussion paper published by the European Union Intellectual Property Office, AAPA also identifies the need for a more streamlined system whereby rights holders can complain about pirated sites and cancel their services.
Additionally, rights holders are looking for a transparent system that opens up awareness of how payment processors treat specific "repeat offenders".
IPTV and Cryptocurrencies
Looking back at Irdeto's 2018 report, cryptocurrencies accounted for just 4.3% of all payment methods openly advertised by pirate IPTV providers. According to the latest figures, that share has now reached almost 12%. AAPA describes the increase as "not huge" and puts forward various theories as to why the uptake is not higher.
"These could be the instability of cryptocurrencies, the sinister association with hacking and ransom demands, or that most consumers do not know how to use cryptocurrencies," the group says.
It seems likely, at least among less tech-savvy IPTV users, that the latter is more likely to be a factor. After all, the most convenient payment methods (PayPal and credit / debit cards) remain the most popular despite the continued level of cooperation with rights holders.
This raises the question of whether the crackdown on the simplest forms of payment will have a strong effect on the penetration of pirated IPTV services in the market.
In the short term, the answer appears to be a resounding 'yes', but over time consumers are also likely to become more used to using crypto, making the transition from traditional payment methods a gradual affair rather than of a sudden culture shock overnight.
There is also evidence in the market to suggest that IPTV providers are encouraging their customers to switch to cryptocurrencies sooner rather than later. In part this could be due to pressure from the payment processor, but there is also a desire for providers to secure their business by making law enforcement "money tracking" investigations considerably more difficult.
That leaves the prospect of significant action by major processors, eventually forcing a big shift towards crypto and creating even bigger problems that will be considerably more difficult to address.
