NBC’s piracy takedowns skyrocket: Wait, wasn’t file sharing supposed to be dead?

NBC’s Los Angeles-based anti-piracy unit sent out 3.9 million takedown notices for pirated content last year, according to a Wall Street Journal report from Monday. Three years earlier, NBC (s GE) sent out just 427,000 such notices.

Piracy is exploding, and NBC is barely keeping up fighting back: That’s the message of the story, which details the work of the studio’s anti-piracy unit at length. Here’s the thing about that notion: It runs counter to some of the common narrative we’ve seen with regards to piracy in recent years. Piracy was supposed to be on the decline, we’ve heard time and again, with Netflix (s NFLX) and others offering legal alternatives that are simply more convenient.

And there’s been numbers to back this notion up: In 2010, 19.2 percent of all residential U.S. Internet traffic during peak times was caused by P2P file sharing, according to traffic management company Sandvine. In the second half of 2012, that number was down to 12 percent. Netflix traffic, on the other hand, exploded during the same time.

So what’s going on here? Is piracy getting worse, is Netflix winning or is it all just business as usual? The answer probably depends on who you ask, but here are a few points worth considering:

  • BitTorrent is still growing, just more slowly. Or in the words of Sandvine: “In absolute traffic level, BitTorrent has risen in volume by over 40%, but the application continues to exhibit a steady downward trend in overall traffic share.” That means people are still downloading growing amount of movies and TV shows via BitTorrent, but Netflix and others are just growing faster.
  • BitTorrent’s not the only game in town anymore. Pirates have been using one-click file hosters and streaming sites hosted in countries with more legal flexibility for some time now, and streaming sites, especially, are starting to play an increasing role for TV show piracy.
  • The world isn’t flat. Sandvine’s numbers in particular have shown a significant slowdown of file sharing in the U.S., but abroad, things look very different. The existence of release windows has in many countries led to a whole generation of TV viewers who watch U.S. movies and TV shows online, something that was echoed by the WSJ piece:

“Rick Cotton, general counsel of NBCUniversal, who oversees the company’s antipiracy unit, said piracy is a particularly big problem overseas. For example, he said that revenue for its Spanish home-entertainment unit declined 62% between 2009 and 2011, mainly because of piracy, and NBC shut it down.”

  • Takedowns don’t equal downloads. That’s an important point that was somehow lost in the Wall Street Journal’s story. The number of takedown notices sent out by NBC isn’t exactly the best indicator for actual piracy levels. Sure, one could argue that the growing supply of pirated sources also indicates a growing level of demand for pirated content. However, the fleeting nature of piracy makes it hard to actually quantify any of this, in part because P2P file sharing works without hosted copies of content. It doesn’t really matter whether ten or a thousand sites link to the same torrent, shared by the same number of people — except if you want to send takedowns to all of these sites.
  • Curious timing, anyone? The WSJ story remarked that studios hardly ever talk about their own anti-piracy efforts, but went on to say that “NBCUniversal gave the Wall Street Journal a rare peek inside the cat-and-mouse game its security team plays with suspected pirates.” Of course, one should note that NBC’s corporate parent Comcast (s CMCSK) just implemented a six strikes copyright enforcement scheme on its own broadband service last week. In light of that step, the story reads a bit like a plea for sympathy: Look, we had to step up our game because takedowns alone weren’t working!

So what’s the takeaway from this? For one, piracy is obviously alive and well, and it’s still a huge headache for studios like NBC. But Sandvine’s numbers also show that piracy’s growth can be contained, especially in markets with compelling legal alternatives. However, expanding these efforts is hard work that takes time, money and the will to change up some of Hollywood’s rules. Expect many more stories about piracy whack-a-mole in the meantime.

Image courtesy of Flicker user Steenbergs.