After spending about $100 million on “Lilo & Stitch,” a live-action remake of a 2002 animated film, Disney had plenty to celebrate. The film pulled in $361 million worldwide on its opening weekend in May and bested “Mission: Impossible — The Final Reckoning” at the box office.
But the company also had cause to be concerned. In the days after the Disney film’s opening, a pirated version of “Lilo & Stitch” proved to be a hit on YouTube, where more than 200,000 people viewed it, potentially costing Disney millions of dollars in additional sales, according to new research from Adalytics, a firm that analyzes advertising campaigns for brands.
The findings of the research shed new light on the copyright issues that once threatened to upend YouTube’s business. They also show how advertisers have unwittingly supported illicit content on YouTube, and they provide rare data about piracy on the platform.
YouTube has long tried to tamp down piracy, but users who upload stolen films and television shows have employed new tactics to evade the platform’s detection tools, the research showed, including cropping films and manipulating footage.
YouTube then recommended the uploaded videos to users on its homepage, promoting pirated streaming of box office releases like “Lilo & Stitch,” or movies exclusively available on streaming platforms, like “Captain America: Brave New World,” according to screen recordings compiled by Adalytics and an analysis by The New York Times.
YouTube, which is owned by Google, may also have generated revenue from some stolen videos, though it’s unclear how much money the platform may have made.
The company has a program known as Content ID to identify videos protected by copyright. It allows copyright holders to block the videos, share in advertising sales of the videos or receive data about who views the videos. Over the years, YouTube has paid billions of dollars to rights holders. YouTube reported flagging 2.2 billion videos last year and said rights holders permitted about 90 percent of those videos to stay on the platform.
Jack Malon, a spokesman for YouTube, said the company does not analyze the less than 10 percent of videos it removes at the request of copyright holders and does not track how many of those videos may be recently released, full-length movies.
The channels that uploaded the videos of “Lilo & Stitch” and “Captain America: Brave New World” were terminated for violating YouTube’s policies on spam, Mr. Malon said.
He declined to say whether the company had profited from commercials shown in copyrighted videos that evaded detection by Content ID or racked up views before rights holders asked that they be taken down.
At YouTube’s request, Adalytics and The Times provided 200 videos for YouTube to review, most of them full-length films. YouTube analyzed the videos but declined to provide insight into what percentage of the films their rights holders had permitted to stay up or had required to be removed.
“To frame these videos as ‘illicit’ without first reviewing the specific choices made by each rights holder misunderstands how the media landscape on YouTube works today,” Mr. Malon said. While “mistakes do occur” on YouTube, he said, he dismissed the Adalytics report as an effort to get companies to sign up for the firm’s services.
Holders of copyrights for the videos, including all the major film studios, did not respond when asked for comment by The Times.
The founder of Adalytics, Krzysztof Franaszek, who conducted the research, said he had observed 9,000 examples of possible copyright violations, “including full-length movies that were in theatrical release, Netflix exclusives such as ‘Extraction 2,’ TV shows such as ‘Family Guy’ and live N.C.A.A. college football games.” The videos collectively had more than 250 million views. More than a hundred of these uploads were also reviewed by The Times.
Movies from every major film studio were found on YouTube in unofficial streams uploaded from last July to May, Adalytics found. When briefed on the research findings, Larissa Knapp, the chief content protection officer of the Motion Picture Association, a trade group for movie studios, said she found them concerning.
At one point, the antipiracy work between the studios and YouTube “did work,” Ms. Knapp said. “But now it seems like some of the stuff may have gone off the rails if illegal content is being placed with ads.”
The research recalled a time in YouTube’s history when Hollywood accused the platform of profiting from its stolen content. In 2007, Viacom sued YouTube, claiming it engaged in “brazen” copyright infringement by allowing uploads of the media company’s material without its permission. In 2012, YouTube won the suit by arguing that it was shielded from liability by the 1998 Digital Millennium Copyright Act, which exempted YouTube from liability for hosting copyrighted work.
The law shifted the burden for protecting a copyright from the platform and video creators to rights holders, said Eric Goldman, a law professor at Santa Clara University. Without the rule, he said, “the internet would not be able to exist in its existing format.”
YouTube has tried to work with film studios, television networks and streaming services to combat piracy. Google, YouTube’s parent company, developed its Content ID technology to recognize copyrighted videos, and YouTube became more aggressive at policing its platform for piracy. Copyright holders gained the right to either have the content removed or collect a share of the advertising revenue the videos generated.
The box office in the United States and Canada routinely loses $1 billion each year to piracy, which is roughly 15 percent of its annual haul, according to the Alliance for Creativity and Entertainment, a trade group of 50 entertainment companies that tries to reduce piracy.
Dr. Franaszek began the research after his advertising clients noticed that as much as 60 percent of their ad spending on YouTube went to videos or channels that were labeled “no longer available.”
After digging deeper, he found that his clients had paid to support content that YouTube later removed because it violated company policies against nudity, violence or hate speech, or because of other offenses.
When videos are removed from the platform, YouTube scrubs advertisers’ records so that they can no longer see the name of the video. Advertisers have to go to the link for the removed video to see if it was removed for a copyright violation, Dr. Franaszek said. He added that the platform did not fully reimburse the advertisers for the cost of commercials in those videos.
Erich Garcia, a senior vice president at Quote.com, which lets consumers compare insurance offerings, said his company’s ads routinely ran with videos that had disappeared, limiting his insight into the effectiveness of his promotions.
Mr. Malon said YouTube advertisers could get more insight into those videos by asking their account representatives for more information. Representatives can provide advertising credits.
Ads from Disney, Hulu, HBO Max, Focus Features and dozens of other companies from various industries were found alongside unauthorized film and television uploads, Adalytics said.
Pirates deployed a range of deceptive tactics to evade YouTube’s antipiracy algorithms. Some uploaded and voluntarily removed copyrighted videos on the same day, racking up viewers before being caught. Other pirates mirrored the videos to reverse the images, or cropped the frames in an effort to trick the Content ID system. Still others placed clips of regular people at the end of a Hollywood blockbuster video to further cover their tracks, Adalytics and The Times found.
Dr. Franaszek said Adalytics clients who paid for advertising in videos that were removed over copyright issues had a simple request: “to have visibility into what content their YouTube ad dollars are funding, and where their ads appear.”
Nico Grant reports on Alphabet’s Google and YouTube as well as the corporate culture of Silicon Valley. He is based in San Francisco.
Tripp Mickle reports on Apple and Silicon Valley for The Times and is based in San Francisco. His focus on Apple includes product launches, manufacturing issues and political challenges. He also writes about trends across the tech industry, including layoffs, generative A.I. and robot taxis.
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