Having examined the state of current Canadian copyright law with respect to anti-piracy measures, the series outlining the case against the Bell coalition’s website blocking plan continues with an examination of the evidence on Canadian piracy. The coalition argues that piracy in Canada is a growing threat, relying on data from MUSO to suggest that current activities “makes it difficult if not impossible to build the successful business models that will meet the evolving demands of Canadians, support Canadian content production, and contribute to the Canadian economy.” My next post will discuss economic evidence in Canada, highlighting record growth in authorized streaming services and production in the Canadian creative sector. This post is limited to data on Canadian piracy rates and whether drastic measures such as website blocking are needed.

Before discussing piracy in Canada, it is important to emphasize that critiquing the data on piracy does not make one “pro-piracy.” No one denies that infringing activity takes place, whether in Canada or elsewhere. Rather, website blocking represents a significant reform with major costs and implications for freedom of expression, net neutrality, and the balanced enforcement of intellectual property rights. Without a compelling case that piracy in Canada is particularly severe – and evidence that the proposed solution will have a major impact on piracy rates – the risks and costs associated with such a plan will outweigh any perceived benefits.

Canadian Studies on Piracy Rates

The most recent Canadian government backed report on piracy is the Circum Network study from 2016. The Bell coalition submission cites the report in support of the claim that Internet providers should play a role in combatting piracy. Yet the report contained few recommendations and did not find much enthusiasm among Canadian stakeholders for investing in anti-piracy activities (which may help explain why existing tools are not being used). The report states that “Canadian representatives of rights holders consulted as part of this study tended not to give online piracy fighting a high priority. While they condemn unauthorized access to intellectual property and while some rights holders indicated actively reacting, they generally considered that their scarce resources are better invested in other battles and counted on global organizations to pursue the fight.” In fact, there was even disagreement among those rights holders that supported government action. While some wanted law enforcement to escalate the piracy issue, others preferred to focus primarily on education efforts.

Those views are echoed in other reports. For example, a 2017 report from the Canada Media Fund noted that “some industry watchers have gone so far as to suggest that piracy has been ‘made pointless’ given the possibility of unlimited viewing in exchange for a single monthly price”, a reference to the commercial success of services such as Netflix and other online video streaming services that now generate more than $1 billion per year in Canada in revenue.

In addition to the commercial success in Canada that refute claims that it is near-impossible to establish successful business models, the data consistently shows that Canada is not a global leader when it comes to piracy. For example, Music Canada recently reported that Canada is well below global averages in downloading music from unauthorized sites (33 per cent in Canada vs. 40 per cent globally) or stream ripping from sites such as YouTube (27 per cent in Canada vs. 35 per cent globally.

The lower Canadian piracy rates are also reflected in data from CEG-TEK, one of the most prolific (mis)users of the notice-and-notice system, which reported in 2015 that there were “massive changes” in the Canadian market after the new copyright legal rules were established. In fact, it noted that the biggest decrease in piracy occurred on Bell’s network:

•    Bell Canada – 69.6% decrease
•    Telus Communications – 54.0% decrease
•    Shaw Communications – 52.1% decrease
•    TekSavvy Solutions – 38.3% decrease
•    Rogers Cable – 14.9% decrease

Similarly, the Business Software Alliance reports that Canada is at its lowest software piracy rate ever, well below global and European averages.

The MUSO Report: Declining Piracy Rates and Questionable Assumptions

The Bell coalition website blocking proposal ignores this data, putting its eggs primarily in one basket: a MUSO study on the state of Canadian piracy (Sandvine data that 7% of North American households subscribe to unauthorized services leaves 93% not subscribing to such services, which does not advance their argument nor does it involve Canadian-specific data). The MUSO study comes up with a big number – 1.88 billion visits to piracy sites in Canada. Yet a closer look at the study shows that Canadian piracy rates declined during the study period. Moreover, there are very questionable assumptions that call into question the validity of the data and highlight why definitions of “piracy sites” is subject to considerable manipulation.

The report itself plainly states that Canadian piracy rates declined during the study period. It points to the trends in the first six months vs. the last six months:

Metric	Trend
Piracy Sites Visits (Overall)	-5.4%
Streaming Sites	-2.89%
Web Download Sites	-1.37%
Public Torrent Sites	-26.78%
Private Torrent Sites	-8.38%

 

In other words, for every type of site measured by MUSO, Canadian traffic declined during the study period.

Beyond the decline in piracy visits, the study is subject to questionable assumptions that raise questions about the validity of the data.  Underlying the MUSO data is website traffic information from SimilarWeb, which samples traffic in countries around the world. There have been several studies that found that SimilarWeb is prone to over-estimating website traffic (here, here), which could mean the overall number is inflated.

Even if the visits are accurate, the MUSO data captures many sites that fall outside the types of piracy sites most envision. The company takes its own list of 23,000 piracy sites and uses the SimilarWeb data as the basis for concluding the number of piracy visits. Yet the sample sites used by MUSO highlight the challenge in identifying what constitutes a piracy site. For example, web download sites include addic7ed.com, a site that contains user-generated sub-titles for television shows and movies. The site includes completed sub-titles and works in progress that allow users to contribute to the translations and sub-titles. It does not contain full video or audio. The legality of user-generated sub-titles may be open for debate (sub-titles can be used for lawfully acquired videos) but few would think of this kind of site as “blatantly, overwhelmingly, or structurally engaged in piracy.” The MUSO list also contains multiple sites that can be used to capture the video from sites such as YouTube. Stream ripping is a concern for the music industry, but these technologies (which are also found in readily available software programs from your local BestBuy) also have considerable non-infringing uses, such as for downloading Creative Commons licensed videos also found on video sites.

Where the site used in the database is widely viewed as a “piracy” site, the data doesn’t always support claims that website blocking is an effective tool for reducing site visits. For example, putlocker.is identified by MUSO as sample streaming site. Indeed, the site is on the blocklist in both Australia and the United Kingdom (both established through court rulings, not the administrative process envisioned by the Bell coalition). SimilarWeb has the latest data for site visits to Putlocker.is with Canada ranking below both Australia and the UK as a traffic source, despite inclusion on a blocklist in the latter two countries. Canada is also declining faster as a traffic source than Australia, the UK, and the United States (which is easily the top source of traffic).

None of this data is meant to justify infringing activity. However, claims that Canada is a piracy haven are not supported by the data. If anything, the data supports the view that Canadians are rapidly shifting away from unauthorized sites toward legal alternatives as better, more convenient choices come into the market. More on that side of the story in tomorrow’s post.