The average piracy site makes $4.4M each year on ads from Amazon, Lego, etc.

Pirated movies and TV shows are only part of the story of lost income for creators. A new report released Tuesday points the finger directly at the ad networks serving those sites.

“Good Money Gone Bad,” a report from the Digital Citizens Alliance (DCA), estimates that content theft sites earned about a quarter of a billion dollars last year from ads.

“Crime can pay,” the report noted, “when you can steal other people’s content.”

The 30 largest pirate sites — the report focused on movie and TV content — will make an average of $4.4 million annually from ads.

BitTorrent and P2P portal sites, among the most popular site types, can rake in more than $6 million per year from ads, and even a small site could see more than $100,000. Since their content is priceless, literally, these sites can have profit margins in the vicinity of 80 percent to 94 percent.

Nearly 600 sites were investigated for the study, which was conducted for DCA by research firm MediaLink LLC. Sites excluded from consideration included porn and hate sites and those with user-generated content. Almost 30 percent of the large sites had ads from premium brands such as Amazon, Lego, McDonalds, and Whole Foods.

Automated Ad Placement

Deputy Executive Director Adam Benson told VentureBeat, “A lot of companies have no idea that their ads are showing up on those sites.”

The key reason: An estimated 53 percent of U.S. online display ad placement was automated last year, as per media strategy firm Magna Global, and that figure is expected to hit 83 percent by 2017.

Way back in the last century, users of the early Internet often shrugged off content piracy. But the scale and damage is different now, the report says:

“The harm caused by content theft now extends well beyond the music and movie industries. It robs designers who rely on the Internet to sell their creations, hurts brands that find themselves associated with illegal and inappropriate sexual and violent content, funds online criminals and provides seed money for other illegal activities.”

What to do? The report recommends that advertisers, their networks, and exchanges beef up their voluntary best-practice standards, using automated filters to sift out content-theft sites. A best practices effort, however, was also attempted in 2012. Benson said that this time, the conversation can at least begin with “some hard numbers.”