How Pirates are Profiting from YouTube

Last week, an article by Andy Maxwell at TorrentFreak highlighted a bizarre problem on YouTube.

In short, the site was being inundated by a flood of pirated movies and TV shows, many available in several different languages, being posted openly on the site.

This is odd for two separate reasons. First, YouTube’s Content ID system usually keeps clearly pirated content off the site. Second, the videos were appearing on established but inactive YouTube channels.

It was clear that someone was hacking or otherwise accessing old YouTube accounts to upload current pirated films.

However, Maxwell would quickly figure out why. After looking at the Content ID matches in some of the videos, he noticed a track named Forward by Zoxer in one of the videos.

It became clear that this was a for-profit scheme in which pirates hacked unsuspecting YouTubers to make money off of pirated content. The plan is as convoluted as it is effective.

How the Plan Works

The problem for pirates trying to exploit YouTube is that the most common way to earn money is off-limits. The YouTube Partner Program, YouTube’s revenue-sharing system for creators, won’t accept pirate channels. Furthermore, YouTube will likely shutter such channels before they can get a check.

Instead, the system does an end-run around both the Partner Program and Content ID.

As described by Maxwell, the system works like this:

1. Create or Obtain Audio Tracks: The first step is to create or otherwise obtain audio tracks. The pirates likely use AI to generate “unique” tracks for this purpose. However, any unique audio track will do.
2. Register the Tracks with Distributors: Second, the tracks are registered with various music distributors, such as CD Baby or Tunecore. This gets the tracks into Content ID for future matching.
3. Obtain and Edit Pirated Films: The pirates then obtain a popular film and edit the track into it. They also likely take additional steps to discourage Content ID from matching the film itself.
4. Upload the Film to YouTube: They then upload the file to YouTube using hacked accounts. Content ID successfully matches the song, and the video goes on to get thousands, if not millions, of views.
5. Collect Royalties: They then collect their royalties from their distributor for all the Content ID-matched views.

The beauty of the strategy is that they don’t care if the accounts they use are suspended. It’s not their accounts. They are just defunct accounts to which they obtained access. They can move on to the next.

Thanks to the distributors and the Content ID system, they are separated from the actual piracy.

The system is essentially laundering piracy. Turning pirated content into “legitimate” royalties. However, it’s not a system without risks.

The Risks

The big risk of this system is simple: It relies on the distributors remaining ignorant. If the distributors become aware of the scam, they can easily shut it down.

However, where YouTube has content moderation tools and extensive experience battling piracy, the distributors are at least somewhat less prepared.

To be clear, CDBaby, Distrokid and Tunecore all have copyright policies and ways to send takedown notices. However, YouTube processes millions of copyright claims daily through its various systems. That’s a scope of experience the distributors can’t match.

However, that does raise another question: How did the videos get through?

While Content ID clearly worked on the videos when identifying the song, why did it not also block the video itself?

That’s a tougher question to answer. However, for as long as Content ID has existed, it’s been playing a cat-and-mouse game with pirates. Pirates find exploits to avoid a Content ID and the system gets updated to close that gap.

That is likely what happened here. As such, the other risk is YouTube updating its algorithms to both stop future piracy and remove existing films. Though YouTube is understandably a dubious partner in this space, it is in the site’s best interest. After all, they run a video rental and purchase service, that this piracy is undermining.

Bottom Line

In the end, this is likely to be a short-lived spike for YouTube. As distributors and YouTube become aware of the scam, they can put the squeeze on it.

However, despite the eye-popping number of views, it’s also unlikely that those behind it will reap significant rewards. According to recent numbers, a Content ID stream nets just $0.00087. This means that a million views nets just $870. However, it’s unlikely that all that money will make it back to the pirates.

Between the distributor’s commission, which is around 30% on YouTube, and the likelihood these accounts will be shuttered before the full payout is made, they will likely receive pennies on the dollar, if anything.

In short, this is likely a lot of work for a very small, very short-term reward. There’s a reason that for-profit piracy usually takes the form of pirate IPTV services or other subscription services. There isn’t that much money to be made here.

Still, the story is an interesting one. It highlights a key flaw in the current Content ID system, and it’s one that both YouTube and the various music distributors need to address. If anything, this is a very loud warning shot that there are flaws that need patching.

Hopefully, all involved can do so quickly.