USC student Elizabeth watched the season finale of HBO's lusty vampire drama "True Blood" along with about 5.4 million television viewers.
But the 19-year-old junior didn't see it in a way that would yield ratings points for Time Warner Inc.'s premium cable channel. She caught the final episode on her laptop using Megavideo, one of a growing number of websites in the vanguard of a new wave of Internet piracy. At least 1.25 million others did the same thing, according to estimates from one firm that monitors online traffic.
Megavideo and other sites like it offer a vast unauthorized selection of popular television shows and movies that can be watched with the click of a mouse, using the same streaming technology found on mainstream sites like CNN or Hulu. It demands none of the time or technical sophistication required to download a video file via BitTorrent or other file-sharing technology.
Streaming video is the most visible sign of how Internet piracy has evolved since the days of Napster and its imitators. The new digital black market combines "cyberlockers," such as Megaupload and Hotfile, which piracy experts say hold stores of pilfered content, with linking sites such as TVDuck and TVShack.cc, which act like an underground version of TV Guide, helping people locate bootlegged TV shows and movies. Some of these linking sites even contain reviews and recommendations that lend a patina of legitimacy.
The growth of streaming pirate sites has been nothing short of arresting. One independent measurement service documented a 42% jump in the number of infringing sites with streaming capability from July to August, sounding alarms throughout Hollywood.
"Accessing stolen content by streaming has become increasingly widespread," said Rick Cotton, general counsel for NBC Universal. "So the challenge of reducing digital theft online now has a second major focal point."
Technological leaps in the living room are heightening anxiety further, with manufacturers expected to ship 27.7 million televisions and 55.7 million media players with Internet connections this year alone, according to global projections from researcher iSuppli. Software including Google TV makes it possible for viewers to search for and find video on the Web — including unauthorized streams (a Google spokesman said the company provides tools for rights holders to remove links to infringing content).
"As we see more and more Internet-connected TVs, we'll see more and more streaming piracy," said Brian Baker, president and chief executive of Widevine, a company that makes the Internet streaming technology used by Netflix, Blockbuster, CinemaNow and Wal-Mart.
File-sharing remains the primary source for pirated digital copies of songs, movies, TV episodes and video games. But use has stagnated as media companies have enjoyed greater success in crippling or shutting down popular sites such as Mininova and Isohunt, said Eric Garland, chief executive of BigChampagne, a media tracking firm. Streaming and downloading from so-called cyberlockers are on track to surpass peer-to-peer use by 2013, according to the Motion Picture Assn. of America, Hollywood's lobbying arm.
"It's not larger than peer-to-peer, but it's growing faster," said Lawrence Low, a vice president of strategy with BayTSP, a technology company that works on behalf of entertainment industry clients in identifying unauthorized content online. "Live streaming, in particular, is doubling in the last two years."
The financial damage to the industry is hard to quantify. The federal Government Accountability Office threw up its hands in April, writing that it couldn't accurately estimate the losses because of all the assumptions required to make up for the lack of data — such as estimating how many consumers would have purchased something they pirated.
The fear is nonetheless palpable throughout the entertainment industry. Executives worry that improvements in Internet speeds and in the software that compresses movie files into easy-to-distribute packages are making matters worse.
"It's made streaming a lot less clunky than it was even three years ago," said Darcy Antonellis, president of Warner Bros. Technical Operations.
Some of the sites that provide links to pilfered digital content lack any whiff of the illicit.
"It may be the case, in some instances, that people are viewing content from these sites believing they're legitimate sites," said Daniel Mandil, the MPAA's general counsel. "That's obviously part of the business model that these sites want to create the impression of legitimacy."