Copy protection, watermarks, digital fingerprinting, and conditional access are all Digital Rights Management (DRM) technologies used to enforce copyright protection of video content, reports In-Stat high-tech research firm. However, efforts to stop the 12 billion illegal peer-to-peer (P2P) downloads occurring annually in the U.S. have come up short. Instead of imposing additional copyright protection technologies, content owners need to find new ways of monetization.

“What is needed is a new approach to monetizing digital content including moving a relatively small group of consumer households that do the bulk of P2P downloading (power users), to legal services. The question is whether the video industry wishes to control its own destiny, or get crushed by technological change, similar to what is occurring in the music business,” said Keith Nissen, In-Stat analyst.

In-Stat believes content owners and service providers need to shift from content protection to a two-pronged content monetization strategy consisting of digital rights information management and offering a better user experience than illegal P2P services.

According to the research company, U.S. broadband households download 14 billion videos each year, 85% are illegal.

In-Stat sees watermarking becoming a growing technology to track licensed usage rights.

A migration of power user households from P2P to legal video services would generate $1.4 billion in subscription revenue and $1.1 billion in advertising revenue.