Digital entertainment has become more accessible than ever thanks to the spread of smartphones and affordable pricing of streaming services like Spotify and Netflix. This has resulted in streaming becoming a bigger source of revenue for the music industry than selling physical CDs. Digital home entertainment is forecast to overtake the sale of DVDs in 2016 as well. Streaming has even been touted as a “ killer of piracy”.
But piracy isn’t dead. The infamous Popcorn Time service now claims to add about 100 thousand new users per day. At this rate, it will take Popcorn Time to become more popular than Netflix subscriptions in the US in about a year. While Popcorn Time itself could be shut down, the appeal of piracy as a source of free entertainment is not going to disappear.
There are two “good” reasons for people to pirate digital content: price and ease of access. Norway’s case shows that eliminating these two obstacles removes the appeal from piracy. However, looking at the global landscape, pricing is a challenge that current digital content providers have not managed to resolve.
While smartphones have become ubiquitous, payment methods (bank cards) for accessing digital services have not. Even if a user in India wanted to buy a streaming service subscription, less than 2 percent of them would be able to do so; add to this the fact that services are incorrectly priced and the number is reduced even further.
Compared to mature economies, software piracy has historically been a much more serious problem in emerging markets. With digital entertainment becoming available in these regions, the amount of users choosing Popcorn Time over Spotify or Netflix is going to be significant. To help illustrate the problem, we’ve put together an infographic comparing payment access and piracy in the biggest global markets. Click on the image below to access the full image:
Carrier billing is one way to resolve the challenge of piracy for digital merchants - its reach goes far beyond credit cards and other bank-based payment methods.
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