Hollywood has had it with piracy. With Kodi boxes enabling a host of pirated services through add-ons, a host of major film studios and online streaming providers have come together to force a number of popular pirated streaming tools to shut down in a coordinated crackdown.

Developers of add-ons including urlresolver, metahandler, Bennu, DeathStreams and Sportie shut them down on Thursday after receiving a letter from a consortium including the major Hollywood studios, Netflix, Amazon, Sky UK and the English Premier League (EPL). Colossus, a repository of Kodi add-ons has also shut down, along with Covenant, a popular streaming tool. Without these, it will not be easy to find streaming content -- at least until other developers pop-up with replacements.

Kodi is a free open source media player. It works on multiple operating systems and device platforms, and lets users stream various media, most notably film and television shows. Its flexibility has made it popular with third-party developers of "add-on" services, which are used to illegally stream copyrighted content. They do so by scraping video hosting sites for streaming links and making them available via tools inside Kodi. These add-ons are often loaded on to devices and sold as "fully-loaded" Kodi boxes by third parties.

The XBMC Foundation, a non-profit that developed Kodi, has expressed frustration at its platform being used in this way. It has warned of the dangers of these pirated devices, as users can find that there is little to no support once the devices have been purchased and often they include malware targeting the user.

A recent study collating data from a number of UK organizations found that more than 1 million illegal set-top boxes had been sold in the country during the past two years. Providers create new revenue via annoying banner ads and pop-ups, but many also charge users subscription fees for channels they already pay for, or smuggle malware on the device or even hijack customers' computers. According to the UK's Police Intellectual Property Crime Unit (PIPCU), a contributor to the report, these sellers aren't necessarily petty criminals but increasingly part of large international crime syndicates. (See 1 Million Pirate Set-Top Boxes Sold in the UK.)

And that's not all. According to an assessment from Electrical Safety First, these boxes could cause life-threatening situations. The organization tested the switched mode power supply unit for nine Kodi set-top boxes and found all of them failed safety tests, with substantial risk of electric shock or fire. These were all unbranded boxes priced between £30-£100 and loaded with add-ons for pirated streaming content.

Yet, according to a recent study from networking vendor Sandvine, 95% of illegal streaming is done via illegal set-top boxes despite these risks. In its 2017 Global Phenomena report, it estimated illegal streaming services are earning $840 million from their subscribers, and costing the video industry in North America alone $4.2 billion in lost revenue. (See Piracy Is Killing Capacity – Sandvine.)

Another study from Nagra puts the worldwide "lost revenue" figure at $7 billion worldwide, based on the revenue from every fourth pirated user being converted to a legitimate service.

Even if you question the math and the assumptions behind it, the numbers involved are pretty big. That has resulted in action by legitimate video providers more recently, such as us satellite provider Dish Network earlier this year.

It also led to the creation of the Alliance for Creativity and Entertainment (ACE), a new initiative aimed at fighting piracy worldwide, comprising 30 entertainment companies. Members include the six major movie studios, Netflix, Amazon, HBO, Hulu and a range of global content providers including Canal Plus, the BBC and Grupo Globo.

Members pool funds and resources to help research efforts to identify instances of piracy, work with law enforcement to shut them down and also collaborate with search engines and ISPs to facilitate their efforts. The funds are not trivial: governing board members have to contribute $5 million annually and executive committee members put in $200,000 each.

While still led by the Motion Picture Association of America (MPAA), this initiative helps coordinate efforts with a broader group of industry members, and also adds budget to anti-piracy efforts.

Thursday's announcements are the first salvo in what is likely to be an extended war on piracy. But in the Internet era, what is shut down today will likely open somewhere else tomorrow. ACE certainly has its work cut out.

— Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation