Prior to shutting down, ExtraTorrent creator SaM had earned millions from distributing torrent links.
Prior to ExtraTorrent’s permanent closure, the site had gone down for two days due to emergency maintenance. Some theorized that the world’s second largest torrent site would go down. Days after, without specifying why, website owner SaM posted a final goodbye to the site’s fans.
Now, a new report shows that ExtraTorrent, along with other top torrent indexing site, made millions.
Digital Citizens Alliance published a report tallying how much popular pirating sites actually generate. The report, titled Good Money Gone Bad: Digital Thieves and the Hijacking of the Online Ad Business, claims to show the money flowing behind these sites.
So, how do illegal content distribution sites manage to stay online and earn tons of cash? The answer: advertising. The report states,
“The 30 largest sites studied that are supported only by ads average $4.4 million annually, with the largest BitTorrent portal sites topping $6 million.”
Even minor sites, which don’t offer a lot of illegal content, earn a lot of money. The Digital Citizens Alliance states that they make more than $100,00 a year from advertising.
To determine the amounts, Digital Citizens Alliance commissioned advisory firm MediaLink LLC. The firm undertook a research project focused on the pirating ecosystem’s revenues and profitability.
Focusing only on data from 2013, Digital Citizens Alliance focused on 596 sites in four categories:
- BitTorrent and Other P2P Portals
- Linking Sites
- Video Streaming Host Sites
- Direct Download (DDL) Sites
Sites like ExtraTorrent, The Pirate Bay, KickAssTorrents, and others earned over $23,181,252 in 2013 in ad revenue alone. Classifying ExtraTorrent as a “large” site, it had an aggregate 94.1% margin. It also had an aggregate cost of $1,375,864.
Digital Citizens Alliance explained why the margins came out so high.
“With cloud-based hosting becoming a commodity, infrastructure costs are low for all but the DDL segment of the ecosystem, which requires more processing and storage capacity than other segments.”
Torrent sites like ExtraTorrent, along with other linking sites, drove the most ad revenue for 2013. Both linking and torrent sites accounted for 80% of aggregate ad revenue. BitTorrent sites generated more than half of the total. Yet, they only made up less than a quarter of the 596 sample sites.
Digital Citizens Alliance gave their summary.
“Content theft sites are making millions in revenue, at high margins, from advertising. Creating a content theft site is inexpensive and requires little technological expertise, making ad-supported content theft ‘easy money’ for bad actors.”
They also explained why taking down sites like ExtraTorrent won’t work.
“Exacerbating the problem for rights-protected content owners and many unwitting premium and secondary brand advertisers are the concurrent trends of a dramatically growing online global universe hungry for cheap, new content, and the explosion of programmatic buying and selling of advertising.”
Furthermore, efforts to “degrade the viability of ad-supported theft [sites]” have only had margin success. These sites evade detection “with considerable ease.”
So, what can the music industry, as well as the entertainment industries, do to take down these sites? Citizens Digital Alliance recommend a coordinated effort from all rights owners.
“A coordinated effort by all stakeholders in the online advertising ecosystem is urgently required to preserve the value of digital media and help make the Internet a safer marketplace for legitimate commerce.”
Cloned sites quickly fill the void left by former sites, such as KickAssTorrents and ExtraTorrent. Without a coordinated effort, explained Citizens Digital Alliance, pirating sites will continue draining millions from all stakeholders.
Following ExtraTorrent’s takedown, “fans” and former “admins” quickly resurrected a clone site. However, while millions have browsed to the site, they have complained of malicious software and viruses.
Image by Pictures of Money (CC by 2.0)