Aussie piracy crackdown fuels shift to VPNs

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By Leith van Onselen

For month’s I have argued that the Government’s data retention policy and crackdown on unauthorised downloading of content would ultimately fail because Australians would simply embrace virtual private networks (VPNs), thus allowing them to surf the web and download content anonymously (click here to read about how VPNs work).

It, therefore, should not be a surprise to read that Australians are already flocking to VPNs in anticipation of the new measures:

While the proposals have not yet been implemented, many Australians are already taking countermeasures.

Over the past two weeks many file-sharers have been seeking tools to hide their IP-addresses and bypass the proposed monitoring system. By using VPN services or BitTorrent proxies their sharing activities can no longer be linked to their ISP account, rendering the three-strikes system useless.

Data from Google trends reveals that interest in anonymizing services has surged, with searches for “VPN” nearly doubling in recent days. This effect, shown in the graph below, is limited to Australia and appears to be a direct result of the ISPs proposals…

ScreenHunter_6458 Mar. 10 14.06

“We are seeing a peak in traffic and sales from Australia. In the past two weeks we saw an 88% traffic increase,” the VPN provider informed us.

Seriously, what is the point of pursuing a $400 million-plus data retention scheme when the targeted perpetrators can easily circumvent the regime at a cost of $5 to $10 a month?

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It seems the only winner from such a policy are the VPN providers, with ordinary Australians left picking up the tab.

As I keep saying, the ultimate solution to online piracy is to make content as freely available and affordable in Australia as it is in the USA. As noted by Fairfax’s Laura Demasi yesterday, Australians will happily pay for content, but only if it is convenient and affordable:

Pirates are… much more likely to pay for downloads, with 23 per cent of them paying for downloads via the likes of iTunes and Google Play, while only 11 per cent of the general population does. They are also twice as likely to use paid online streaming services, such as Quickflix, than the rest of us.

So if it’s not the money, then what is that drives pirates? It’s the same old elephant in the room. By and large people in Australia pirate because they don’t want to wait months to watch their favourite TV shows or movies. It’s a timely access, not a cost, problem.

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So what’s the chance that the Government will move to free-up access to digital content, in the process waging war against its backer, Rupert Murdoch (owner of Foxtel)?

Buckley’s and none, I say.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.