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Online piracy cuts into HBO profit on Mayweather-Pacquiao

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Manny Pacquiao (right) lost to Floyd Mayweather on Saturday — and so did HBO and Showtime, thanks to online piracy by Periscope and Meerkat users.

Broadcasters got hit with a nastier left hook than Floyd Mayweather or Manny Pacquiao landed on Saturday night.

Showtime and HBO were slammed during the so-called Fight of the Century, as hordes of online pirates aimed their phones at the TV to transit free, live video of the welterweight boxing championship that millions could watch without paying the nearly $ 100 pay per view price tag.

On Monday, punch drunk TV executives were dealing with the new media landscape.

Spectators often use mobile phones to “broadcast” from live events, a form of piracy. Isaac Brekken/AP

Spectators often use mobile phones to “broadcast” from live events, a form of piracy.

Enlarge And here’s what it looks like. Artur Debat/Moment Editorial/Getty Images

And here’s what it looks like.

Enlarge

Spectators often use mobile phones to “broadcast” from live events, a form of piracy.

“It was insane,” a network source said. “But it’s the new reality, this kind of technology is going have huge implications for broadcasters like NBC which has already paid billions for the Olympics.”

Periscope is owned by Twitter, but the company does not control the content created by its users. As such, lawyers for the pay cable channels were reduced to a game of whack-a-mole as they attempted to shut down each individual stream.

Whenever a stream went down, viewers could find another. To underscore the impact, Twitter CEO Dick Costolo gloated in a tweet, declaring Periscope the “winner” of the fight — though HBO and Showtime still made $ 400 million in pay-per-view sales.

Officials from both pay channels declined to comment, but one industry source likened the possible disruption to what happened to record and CD sales after music lovers could easily trade digital files.

“This is a concern for our business overall,” the source said. “It’s a concern for every grip, every lighting director, all the way up to the CEO of the company. This could be a Napster-type of thing. It’s troubling, because you don’t know where it’s going to go.”

Dick Costolo tweeted out, "and the winner is...@periscope."Twitter

Dick Costolo tweeted out, “and the winner is…@periscope.”

The hijacking leaves networks and sports leagues are scrambling to figure how to fight back.

Last week, golf blogger Stephanie Wei used Periscope to post video clips of Jordan Spieth’s practice round at the Match Play Championship — and in response, the PGA revoked her 2015 credentials, saying she violated rules against sharing video images of players.

And earlier this year, the NHL banned Periscope and Meerkat streams from its games.

Broadcasters are also struggling to fight this new high-tech threat to their bottom lines.

“We’re aware of these platforms (Periscope, Meerkat, Livestream and others) and are active in evaluating both the opportunities and challenges they present,” said ESPN spokesman Paul Melvin.

Other media observers said broadcasters will prevail, noting that in 2012, many believed that Twitter would deter viewership of the London games, which still turned out to be the most-watched television event in history with 217 million viewers spread out over several days.

In the case of the Mayweather-Pacquiao fight, sources told The Daily News that Showtime and HBO had reached out to established live streaming platforms like YouTube and UStream that block copyrighted content.

But emerging platforms such as Periscope do not have these industry-accepted systems in place and require individual requests for each takedown, an industry source said.

For NBC, the pirating of the fight has huge implications for its Olympic telecast next year. The network shelled out a whopping $ 1.23 billion for the North American rights to carry the the 2016 Summer Games from Rio, and could easily lose viewers who watch events live on pirated streams in real time. Historically, NBC tapes the biggest events and airs them in primetime.

“This will cannabalize viewers,” said TV Media Insights editor-in-chief Marc Berman. “It’s very dangerous time for broadcasters.”

SI DEBAR: The main streaming services

Periscope

What is it: App allows users to stream live from their mobile device

Launched: March 26, 2015, days after it was purchased by Twitter for $ 100 million.

Users: Over 1 million

Legal Issues: Legal notices sent from HBO to take down streaming of “Game of Thrones”; banned by NHL.

*

Meerkat

What is it: App allows users to stream live from their mobile device

Launch: February 27, 2015 by Ben Rubin

Users: over 300,000

Legal Issues: HBO warned it about posting “Game of Thrones” material; banned by NHL.

*

Livestream

What is it: App allows users to broadcast live video. Users create their own Livestream pages with their archived videos.

Launched: 2007 in New York

Users: Over 300,000

Legal Issues: Livestream has strict copyright laws, like YouTube, and content is removed through automatic censoring.

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Daily News – Sports

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