Residential Proxies for Streaming Platforms and the Role of IP Address Intelligence
The streaming industry in Europe is poised to flourish in the coming years with a forecasted growth rate of 20.36% from 2022 through 2027, highlighting a continued trend of rapid expansion within the industry according to data from Technavio.
While growth is projected to be strong, profits and ad revenue could face a hurdle, as the streaming industry faces potentially one of its biggest threats. Residential proxies, similar to VPNs, are a technology used by consumers to mask their identity and location. Their use is rising at an alarming rate. According to recent findings from Digital Element, there has been a 188% surge in the adoption of residential proxies across the EU from January 2023 to January 2024, with a staggering 428% increase within the UK alone. During that same time period VPN usage, already a concern for the streaming industry, has escalated by 42% in the EU and 90% in the UK.
This issue has significant implications for both the platforms and their users. Residential proxies are by nature an identity masking technology and are increasingly being used to bypass geographical restrictions in order to access content not available in certain regions. This practice undermines the licensing agreements and revenue models of streaming services.
Contributing to the problem even further are the many individuals who "sub-let" their IP addresses to proxy services. This cohort are unaware of the broader implications of their actions because they blur the line between legitimate and illegitimate access, making it increasingly difficult for streaming platforms to manage. These consumers are often motivated through compensation offered by the residential proxy companies - ironically, often in the form of streaming service gift cards.
Some might say that an easy solution would be to simply block all residential proxies but for streaming providers, the answer is not that simple. Blocking every residential proxy observation would also cut off access for legitimate subscribers, creating a poor user experience for paying customers. A more nuanced and informed approach is necessary in order to protect the rights of honest consumers, yet still block the bad actors.
To effectively fight this, streaming providers can’t take a surface-level approach, they need to get into the weeds and leverage tools that will provide a deep understanding of user intent. To do this they need to look at the root of all web traffic - the IP address – and then go even deeper.
This is where IP address intelligence comes into play. By leveraging sophisticated IP address intelligence, streaming platforms can gain insights into the nature of the traffic they are receiving. This technology enables them to identify not only whether an IP address is associated with a residential proxy, but can also provide contextual clues to quantify the threat and understand its scope. By identifying IP behavioral patterns at the root level, streaming providers can begin to formulate their strategic approach regarding the disposition of IP addresses related to residential proxies.
While there is currently no cut-and-dry solution to eliminate the problem, IP address intelligence provides a critical first step. It offers the data needed to understand the breadth of the problem and begin modeling strategies to help mitigate the impact of residential proxies. Without these insights, streaming platforms are essentially operating in the dark, unable to effectively differentiate between legitimate and illegitimate traffic.
If the trend line continues to hold, the use of residential proxies will only increase and cause even greater concern for streaming platforms worldwide. As the industry seeks to address this issue, the role of IP address intelligence will become increasingly important. It is clear that without the ability to accurately identify and understand the origin of traffic, there is no foundation upon which to build a viable solution. The future of streaming depends on the industry's ability to adapt and respond to these evolving challenges, and IP address intelligence will undoubtedly play a pivotal role in this ongoing effort.
[Editor's note: This is a contributed article from Digital Element. Streaming Media accepts vendor bylines based solely on their value to our readers.]
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