Today on Capitol Hill, at an event hosted by the Information Technology and Innovation Foundation (ITIF), industry analyst David Price of NetNames unveiled a new report that measures the size and shape of online piracy – and details how piracy profiteers are finding new ways to make money off stolen creative works.

“The amount of bandwidth used for copyright infringement in North America, Europe and Asia Pacific has grown nearly 160% since November 2011, accounting for 24% of total Internet bandwidth, according to a study from NetNames, the British brand protection firm,” the Los Angeles Times reported today.

The Washington, D.C., event was attended by U.S. Senators Orrin Hatch (R-UT) and Sheldon Whitehouse (D-RI), co-chairs of the Congressional International Anti-Piracy Caucus. Both lawmakers underscored the need for action to address the problem of online piracy and its damaging effects on the economy.

Among the more troubling findings in the report:

  • As the Internet grows, Internet-based piracy continues to skyrocket.  The amount of bandwidth dedicated to pirated content has grown by nearly 160 percent between 2010 and 2012.

  • Bandwidth on piracy sites accounts for nearly 24 percent of total Internet bandwidth.

  • In January of 2013, 327 million unique Internet users explicitly sought pirated digital content.

  • In January of 2013, there were nearly 14 billion page views recorded on web sites focused on piracy – a 9.8 percent increase in page views dating back to November 2011.

But it’s not all bad news. While the consumption of stolen content is up overall, the use of direct download cyber lockers is down – in large part due to the shutdown of Megaupload, which demonstrates that enforcement can be effective.

  • The number of unique users on direct download cyberlockers dedicated to piracy decreased nearly 8 percent since November 2011.

  • Page views on direct download cyberlockers decreased by 2.3 billion page views marking a 40 percent decrease from November 2011.

And in some regions, particularly North America, the explosion of legitimate distribution services such as Hulu and Netflix has significantly altered the online landscape, demonstrating great potential, although the increased share of bandwidth going to legitimate sites has not kept pace with the rapid growth on pirate sites.

In this video, Price explains the economics of piracy – how illegal sites make money off advertisements and subscriptions. While increased enforcement is one way to curb piracy, at least temporarily, persuading legitimate businesses that make up the Internet ecosystem to do the right thing and take the profit out of piracy could affect real, long-term progress – and ensure that consumers can enjoy high-quality content from safe, secure, and legal sources, and that creative professionals are rewarded for their hard work.

Read full report, Sizing the Piracy Universe.