Is ISP-level website blocking the right approach to combat piracy?

In December 2016, internet service providers in Australia began blocking five major BitTorrent websites after an expansive campaign spearheaded by a coalition of content providers, including cable/subscription service Foxtel and Village Roadshow. The long-awaited result was the conclusion of almost two years of work from this anti-copyright coalition, which involved first pushing new legislation through the Australian Parliament in 2015 before moving through the Federal Court later in 2016.

A great deal of time, and presumably money, went into the process of setting up a system allowing copyright holders to have these have infringing websites blocked, so it's worth asking – is this the best approach to combat piracy?

The very same day these ISP-level website blocks were instigated, a flood of articles were published describing ways the blocks could be bypassed. Two years of comprehensive legal work was subverted "with just a few clicks and without a penny spent."

Co-CEO of Village Roadshow in Australia, Graham Burke, has been one of the key players in moving these new laws through the government and courts over the past few years. In October he called those who pirate copyrighted content, "leeches and thieves," hyperbolically comparing them to drug dealers saying, "these are the same type of people that sell heroin."

Australia represents a fascinating case study in how to approach the 21st century battle over illegal file-sharing. The country has one of the highest rates of piracy in the Western world, with studies showing that anywhere from 16 percent of all Australian internet users accessing piracy websites to 26 percent of the total population accessing copyrighted content via illegal means (as a contrast, less than 5 percent of the internet population of the United States visit illegal file-sharing websites).

The high piracy rates in Australia have long been hypothesized as being related to the country being left behind in terms of global release patterns, with big name streaming services only rolling out widely across the country in early 2015 when Netflix and other local providers hit the scene. The rise of content piracy in the country can possibly be correlated with the citizens' ability to access film and TV materials. Consumer advocacy group CHOICE found in late 2015 that after just eight months of legal streaming services in Australia, the number of people pirating film or TV at least once a month had dropped by a quarter.

Another study pointed to an amazing 29 percent drop in internet piracy in the country over the course of 2015, with 33 percent of those surveyed who had ceased piracy citing streaming services such as Netflix being the single biggest reason for their behavioral shift.

While Australia is only just moving into a period of court-mandated website blocking, the United Kingdom has been blocking copyright infringing websites for several years. The success, or failure, of these measures is still a divisive topic. The most significant study that is often quoted as a marker of the system's success is from researchers at Carnegie Mellon University.

Their research determined that the most effective strategy in the UK occurred in November 2013, when 19 major video piracy sites were simultaneously blocked. They concluded the event resulted in a "meaningful reduction" in total piracy and an increase in paid legal streaming traffic of 12 percent. The following year, another 53 sites were simultaneously blocked in the UK with the Carnegie study noting an additional 6 percent increase in paid streaming traffic.

While this study is constantly referred to as the signpost of success for website blocking strategies, it is worth noting that Carnegie Mellon University's Initiative for Digital Entertainment Analytics (IDEA) receives unrestricted (gift) funding from the Motion Picture Association of America (MPAA).

In contrast to this report, TorrentFreak (which, to be fair, has as much of an agenda as the MPAA) obtained a leaked copy of an internal report commissioned by several film studios in late 2014 on the efficacy of website blocking as a strategy in reducing piracy. Interestingly, the report found that website blocking did indeed reduce traffic to piracy sites by over 70 percent, but conversely noted that traffic towards unblocked "linking-only" sites increased by more than 230 percent.

The statistic noting the traffic reduction of over 70 percent to these piracy sites is often cited by advocates of website blocking as evidence pointing to the efficacy of the strategy, but the TorrentFreak analysis of that report found some major problems with the data. Most of these site-blocking efficacy analyses note that they have limited ways of gathering their data. The leaked report even stated it couldn't measure VPN traffic or proxy services.

The VPN issue is the great unknown hovering over the site blocking conversation. While pro-blocking advocates don't see it as relevant to the efficacy of what they are trying to achieve, it certainly feels like a significant black spot in how to evaluate the usefulness of the process.

Australia, in particular, is a country with a notable uptake of VPN usage. A report published in late 2014 claimed that 680,000 Australian households were accessing overseas video content via a VPN. This equates to around 16 percent of Australian internet users regularly using a VPN. Most interestingly, half of those VPN users in late 2014 were paying for a US Netflix subscription simply because the service was unavailable in the country. At the time access to the US Netflix service by Australians via a VPN astoundingly constituted the second most used paid media service in the country behind cable TV provider Foxtel.

It seems increasingly clear that the availability of content is the primary concern for most users who are illegally accessing copyrighted materials. One cannot help but wonder if the major copyright holders would be better served by shifting the significant resources they are currently spending on legislative measures such as website blocking. Instead, they could concentrate on understanding how audiences want to consume materials in the 21st century and work to develop more modern distribution pathways. The statistics are relatively clear, with the "Netflix effect" showing an undoubted correlation in many countries between the introduction of simple, paid streaming services with a reduction in piracy.

We all can agree that copyright holders deserve to be able to make money from the content they invest in producing. That is not a question even up for debate. The question that needs to be asked is whether the strategies they are employing are effective. If nearly two years of hard and costly legislative work can be overturned literally in seconds, then maybe the answer is clear.