The Federation Against Copyright Theft, in conjunction with the police and Intellectual Property Office, has released a new report on the state of Internet piracy in the UK. Estimates suggest that at least a million set-top devices providing access to pirated material have been sold over the past two years, with 25% of the public consuming illicit content overall.

With the devices hitting the headlines on an almost weekly basis, it probably comes as no surprise that ‘pirate’ set-top boxes are quickly becoming public enemy number one with video rightsholders.

Typically loaded with the legal Kodi software but augmented with third-party addons, these often Android-based pieces of hardware drag piracy out of the realm of the computer savvy and into the living rooms of millions.

One of the countries reportedly most affected by this boom is the UK. The consumption of these devices among the general public is said to have reached epidemic proportions, and anecdotal evidence suggests that terms like Kodi and Showbox are now household terms.

Today we have another report to digest, this time from the Federation Against Copyright Theft, or FACT as they’re often known. Titled ‘Cracking Down on Digital Piracy,’ the report provides a general overview of the piracy scene, tackling well-worn topics such as how release groups and site operators work, among others.

The report is produced by FACT after consultation with the Police Intellectual Property Crime Unit, Intellectual Property Office, Police Scotland, and anti-piracy outfit Entura International. It begins by noting that the vast majority of the British public aren’t involved in the consumption of infringing content.

“The most recent stats show that 75% of Brits who look at content online abide by the law and don’t download or stream it illegally – up from 70% in 2013. However, that still leaves 25% who do access material illegally,” the report reads.

The report quickly heads to the topic of ‘pirate’ set-top boxes which is unsurprising, not least due to FACT’s current focus as a business entity.

While it often positions itself alongside government bodies (which no doubt boosts its status with the general public), FACT is a private limited company serving The Premier League, another company desperate to stamp out the use of infringing devices.

Nevertheless, it’s difficult to argue with some of the figures cited in the report.

“At a conservative estimate, we believe a million set-top boxes with software added

to them to facilitate illegal downloads have been sold in the UK in the last couple

of years,” the Intellectual Property Office reveals.

Interestingly, given a growing tech-savvy public, FACT’s report notes that ready-configured boxes are increasingly coming into the country.

“Historically, individuals and organized gangs have added illegal apps and add-ons onto the boxes once they have been imported, to allow illegal access to premium channels. However more recently, more boxes are coming into the UK complete with illegal access to copyrighted content via apps and add-ons already installed,” FACT notes.

“Boxes are often stored in ‘fulfillment houses’ along with other illegal electrical items and sold on social media. The boxes are either sold as one-off purchases, or with a monthly subscription to access paid-for channels.”

While FACT press releases regularly blur the lines when people are prosecuted for supplying set-top boxes in general, it’s important to note that there are essentially two kinds of products on offer to the public.

The first relies on Kodi-type devices which provide on-going free access to infringing content. The second involves premium IPTV subscriptions which are a whole different level of criminality. Separating the two when reading news reports can be extremely difficult, but it’s a hugely important to recognize the difference when assessing the kinds of sentences set-top box suppliers are receiving in the UK.

Nevertheless, FACT correctly highlights that the supply of both kinds of product are on the increase, with various parties recognizing the commercial opportunities.

“A significant number of home-grown British criminals are now involved in this type of crime. Some of them import the boxes wholesale through entirely legal channels, and modify them with illegal software at home. Others work with sophisticated criminal networks across Europe to bring the boxes into the UK.

“They then sell these boxes online, for example through eBay or Facebook, sometimes managing to sell hundreds or thousands of boxes before being caught,” the company adds.

The report notes that in some cases the sale of infringing set-top boxes occurs through cottage industry, with suppliers often working on their own or with small groups of friends and family. Invetiably, perhaps, larger scale operations are reported to be part of networks with connections to other kinds of crime, such as dealing in drugs.

“In contrast to drugs, streaming devices provide a relatively steady and predictable revenue stream for these criminals – while still being lucrative, often generating hundreds of thousands of pounds a year, they are seen as a lower risk activity with less likelihood of leading to arrest or imprisonment,” FACT reports.

While there’s certainly the potential to earn large sums from ‘pirate’ boxes and premium IPTV services, operating on the “hundreds of thousands of pounds a year” scale in the UK would attract a lot of unwanted attention. That’s not saying that it isn’t already, however.

Noting that digital piracy has evolved hugely over the past three or four years, the report says that the cases investigated so far are just the “tip of the iceberg” and that many other cases are in the early stages and will only become known to the public in the months and years ahead.

Indeed, the Intellectual Property Office hints that some kind of large-scale enforcement action may be on the horizon.

“We have identified a significant criminal business model which we have discussed and shared with key law enforcement partners. I can’t go into detail on this, but as investigations take their course, you will see the scale,” an IPO spokesperson reveals.

While details are necessarily scarce, a source familiar with this area told TF that he would be very surprised if the targets aren’t the growing handful of commercial UK-based IPTV re-sellers who offer full subscription TV services for a few pounds per month.

“They’re brazen. Watch this space,” he said.

FACT’s full report, Cracking Down on Digital Piracy, can be downloaded here (pdf)