In the market for monitoring and protecting content on the Internet in Russia there are a number of players that in some ways satisfy consumer demand for these services.
Their activities mainly fall under the "protection" category, which refers to activities to identify Internet links to download illegal content and a set of measures to persuade the owners to remove the links. However, a complete technical method that prevents illegal downloading and its distribution to consumers has not been proposed.
As a result, and due to the low efficiency of implemented measures that in fact fail to prevent theft, not more than 10% of rights owners use these “protection” services. But at the same time, film distribution losses amount from 10-15% (based on statistical models) to 30-40% (according to the producers) of the revenue received.
In addition to indirect protection services, Pirate Pay plans to create an infrastructure for the controlled distribution of digital copies of content through Bittorrent. In other words, to become a distributor of digital content through torrents, offering users a convenient means of payment to the authorized owners of the content.
The total volume of offline DVD sales in Russia is estimated at 1.6 billion dollars, but annual sales are down by 10-13%. This is happening because of the move of consumers to online sales (offline sales passed the peak in 2008). The volume of the online market compared to offline is still small. According to various estimates, the volume is from $0.1 to $0.15 billion, mainly from online video streaming services. In this case, legal products account for only about 1%. Market players are optimistic about these figures, predicting growth in the share of legal content to 10% in the near future. Pirate Pay’s business model will create new and particularly efficient conditions for the growth of both market niches of the project: the content security services market and the market of legal sales of digital content over the Internet.
The growth of the market of security services will begin with from a low level. In 2010 - $2.5 million (+ / - $ 0.1 million), and by 2015 it will reach an annual volume of $25 million, the bulk of which will be taken by Pirate Pay. The main drivers of growth will be: an increase in distributors coming to the service, from 10% to 75%, and the rejection of the old methods of protection in favor of the Pirate Pay. Thus, the rate of growth will be 800-900%, most of which will be for Pirate Pay.
The market for the growth of legal sales of online DVD was an impressive 25,500%. First, is the role of the base effect, as today the estimated amount of legal sales is only 1% of the 3 billion rubles in sales. But the increase of this share to 30%, and the annual "overflow" in the market of online distribution of DVDs of 4.5 billion rubles from offline will allow the level of legal sales to reach 7.65 billion rubles by 2015. Pirate Pay will share this growth with other market participants, and plans to take about 40% of this niche, and also a commensurate share of torrent traffic within general Internet traffic.
The overseas markets for content protection and distribution of digital content is much larger than the Russian market. The market volume of security services is valued at $100 million. The market for digital content distribution is as high as $10 billion. The estimated growth rate of these markets is 300% by 2015. Growth rates are lower than the Russian market due to a substantially higher degree of development of markets (especially the distribution market).