October 2023 – Page 34 – news.buyenne.com

The all-round pirate IPTV ‘product’ widely available today was relatively unknown just a decade ago. When acceptable quality, capacity, presentation, and availability collided, mainstream awareness was just a question of time.

The suggestion that broadcasters were taken by complete surprise underestimates their market awareness, but whether most expected the initial hors d’oeuvre to be immediately followed by a perpetual all-you-can eat TV banquet, seems at least somewhat improbable. The growing enforcement response seen today, on the other hand, was always inevitable.

Cross-Border Investigation

News this week of a major operation against a pirate IPTV network in Austria follows an increasingly familiar pattern; an initial rightsholder complaint to authorities followed by a significant law enforcement response.

During a media event at the Federal Criminal Police Office (Bundeskriminalamt) it was revealed that the investigation began in 2022 when a “large pay-TV company” filed a criminal copyright complaint. No specifics, but mentions of Sky and DAZN content suggest the general direction.

Inquiries in Germany led investigators to Austria and the Wiener Neustadt public prosecutor’s office, which in turn requested legal assistance from the Federal Criminal Police Office. A team of IT forensic experts went on to identify a large network of suspects operating in Austria.

Massive Operation in Austria

What followed were two large-scale raids, one in the spring of 2023 and a second during late summer. A team of 40 investigators targeted addresses in the Vienna, Lower Austria (Niederösterreich), Tirol, Vorarlberg, and Salzburg regions.

A total of 20 suspects were arrested during the raids. While all lived in Germany or Austria, the suspects and others in the wider network are said to be Turkish citizens. Aged between 23 and 35, the suspects are described as having computer science skills.

The authorities also seized €1.6 million, 60 bank accounts, and an Audi A7.

The ‘Big Money’ Business Model

At the top of the network, investigators say the IPTV business was lucrative. In the opinion of Gabriel K. and his colleagues, the main suspects generated profits in excess of €11 million over a three-year period, funds allegedly invested in real estate and various companies. Supporting figures released this week related to the operation’s sales structure make it difficult to assess whether the huge headline profit claim is reasonable.

The authorities claim that the IPTV service was advertised on TikTok, Facebook and similar platforms, but the parties responsible for that aren’t mentioned. It’s further claimed that some customers were recruited as subscription resellers. By whom is unclear and without that information, it’s impossible to say whether those sales add to the subscriptions already sold to existing resellers, or form part of subscriptions already sold.

Gabriel K. reportedly confirmed the existence of 15 known resellers in Austria, servicing between 300 and up to 2,500 customers each. The customer range here is too broad to draw any sensible conclusions on profit or revenue.

At one extreme this could mean a single reseller turning over €25,000 per month, based on 2,500 customers paying €10 each (estimates actually indicate around €8.50pm), thereby generating annual turnover of €300,000. At the other extreme, one reseller with 300 customers might turn over €3,000 per month, while generating an annual turnover of €36,000.

Multiplied out over all 15 resellers, overall annual turnover for the resellers identified thus far could be close to €4.5m or as low as €0.5m. Once the resellers’ sales margin is removed from the equation, revenue returned to the ringleaders may reduce these amounts by up to a third, give or take, and that’s before factoring in operational costs.

“Decrypting TV Signals” Since 2016

Investigators say that the men are suspected of decrypting TV signals since 2016.

“The signal is decrypted once and can then be passed on infinitely,” said chief investigator ‘Gabriel K.’ as reported by local media.

While it’s clear someone must’ve decrypted official TV channels at some point, the information currently available makes no mention of any hardware capable of that being seized by the police. A total of 55 “electronic data carriers” are mentioned (storage devices presumably) but nothing beyond that.

That raises the question of whether illicit streams were created by the ringleaders, or simply purchased to sell on. Several local reports say that the ringleaders are suspected of decrypting official TV signals but then go on to suggest the streams were supplied by others.

While these details are important, none really detract from the scale of the alleged offending and the charges of commercial fraud, money laundering and copyright infringement (criminal, presumably) said to await the defendants at trial. Potential prison sentences of up to 10 years in Austria only add to a civil case reportedly pending in Germany, which in itself could prove extremely punishing.

After seven months in custody, the suspects reportedly decided to confess and have been freed to await trial.

From: TF, for the latest news on copyright battles, piracy and more.