Pirate booty? Start-ups see new ad market in illegal downloaders

A SMALL number of US-based start-ups are harvesting data about the hundreds of millions people who illegally stream movies, TV shows and music in a bid to create a new advertising market.

Whether major brands are willing to pay for the opportunity to market to consumers who steal content – an industry taboo to date – will determine the fate of this cottage industry.

The new businesses measure and track the digital footprints of illegal downloaders. While the concept is still in its infancy and has been greeted with scepticism among some media insiders, a handful of firms are making early inroads.

The biggest of these startups, Tru Optik, signed a deal earlier this year to share its data with New York media agency Mindshare, a division of GroupM, which is owned by WPP, the global advertising and public relations company.

Three-year-old Tru Optik has assembled a database of the 500 million people who illegally view or share shows and movies via BitTorrent and other file-sharing platforms. That data is combined with other user data, including the websites they visit, zip codes and purchasing history.

Mindshare uses this information to better identify new genres of movies and shows to help its media clients advertise to fans of these genres, said Sameer Modha, who oversees customer data strategy at Mindshare Worldwide.

For example, Mindshare recently noticed from the data that there is a fan base for shows and movies from several different genres, including Westerns and science fiction, that all featured “protagonists who are isolated in some dystopian alternate reality.”

Mindshare can use this customer segmentation to help media clients market relevant shows and movies. But Modha stressed that Mindshare does not advertise directly to illegal viewers, and said that understanding their behaviour is not the same as promoting it.

Some major industry players, including the National Association of Broadcasters ( NAB), told Reuters they find the enterprise distasteful but have yet to take any legal action against this new approach.

Tru Optik’s chief executive, André Swanston, says the company does not endorse or condone piracy.

Its database allows brand advertisers to reach these downloaders – identified by IP address and other anonymous data points, but not by name, according to the company – with targeted ads on the websites they frequent.

No ads are placed on sites where pirated content is shared or on pirated content itself, according to the company.

“I don’t think it’s legitimising these people because these are already legitimate consumers,” he said, noting that the illegal downloaders also are heavy buyers of media.

“By providing media companies with better audience data and the ability to market to these viewers, Tru Optik believes it is helping clients mitigate piracy and better monetise its content,” Swanston said. – Reuters