How rampant is online Piracy?

The author of a new study commissioned by NBCU has released a video presenting claims of huge increases in the amount of online piracy over the last two years.  I'm always a bit skeptical of industry-backed research in this area, particularly when the study doesn't provide details on their methodology or definitions, and reports claims of significant numbers in a somewhat dishonest manner.

This report seems to fit that pattern.  Hidden in the passing discussion is the result that their study of online piracy in 2010 reported that 23.8% of all online traffic was pirated content.  Still, while expanding the scope of their study to include new forms of pirated content, and claims that the amount of pirated content distributed via the internet had skyrocketed in absolute terms (160% increase in the amount of "pirate" data traffic), along with an increase in the number of people regularly trading in pirated content (up more than 10% to 317 million unique users), the report still suggests that in 2012, a whopping 24% of all online traffic was pirated content.  Yes, that's right - in relative terms, a nonsignificant increase of 0.2% of total global online data traffic - and that's with a broader definition of "pirated content."

The claim of huge increases in absolute amounts of content, even if accurate, is confounded by the rapid increase in both the number of Internet users in the three areas examined (North America, Europe, and Asia) and the even more significant increase in online traffic driven by growth in video content (and its much larger data files) and the expansion of broadband connectivity.  Put in that context, and looking at share of data traffic, the increase is minimal.  Similarly, a 10% growth in the number of internet users accessing pirated content regularly sounds high, until you compare against the growth in the total number of internet users globally - which is up 17% over just the last year.  The 317 million number also seems a bit suspect when you consider that it amounts to 17% of the internet users in those areas.  Do 1 in 6 internet users really traffic in pirated content at least monthly?

I'm not going to claim that online piracy isn't a problem, or profess any real knowledge of how significant the problem is, or how negative its impact.  (Although I'll point the interested to a study for the WIPO that found that while piracy of broadcasting signals was rampant, the economic impact was slight as the vast bulk of that piracy was in areas where signals weren't being marketed anyway, and/or where populations were unlikely to be able to afford first-world prices).

But I will point out that the trumpeted claims of online piracy becoming a significantly bigger problem in the last few years is contradicted by the report's own numbers, once they are placed in the context of the continued rapid growth of internet use and increased data traffic.

Source - Online piracy of entertainment content keeps soaring, LA Times
Study on the Socioeconomic Dimension of the Unauthorized Use of Signals, Part III - WIPO SCCR/21/2