Did you ever consider the costs involved in operating a vast pirate IPTV enterprise? Following the prosecution of the Flawless IPTV operators, the expenses of their IPTV service were exposed.
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The recent legal actions against five individuals marked the completion of the most extensive IPTV prosecution in the UK.
The prime focus of this extensive probe was Flawless IPTV and its operations from August 2016 to May 2018.
During this period, Flawless IPTV served approximately 42,000 direct clients, charging each around £10 per month. During that timeframe, it was the most in-demand IPTV facility in the UK.
The service also engaged about 100 resellers who had the liberty to determine their own prices. These resellers had approximately 20,000 subscribers, from whom Flawless received a £6 cut per subscription each month.
The prosecutors estimated that Flawless gleaned gross revenues of about £4.6 million. Nevertheless, this was only an educated approximation, as the actual figure may have been higher.
The ambiguity arose from Flawless’s decision to begin accepting Bitcoin payments from subscribers in 2018, making it impossible to obtain concrete evidence of the total amount received.
While revenues were challenging to ascertain, the service’s expenditures were meticulously documented.
Costs of Operating Flawless IPTV Service
Bank and PayPal records unveiled payments to multiple entities worldwide, presenting insight into Flawless’s operational costs and the allocation of payments.
Employees
From August 2016 to May 2018, Flawless IPTV had at least 23 employees, apart from the six main operators.
The documents from the probe showed that the total payments to these employees exceeded £439,300, making it the most significant expense for the operation.
Infrastructure
Moreover, every IPTV operation necessitates two vital components: a source of illegitimate pirate streams and servers to distribute these streams to subscribers.
Media reports emphasized that Flawless both utilized its own methods to procure streams from legitimate suppliers and purchased from ‘wholesale’ illegitimate stream suppliers.
For the previously mentioned reasons, the names of the stream suppliers are also redacted here. However, they include what is likely to be the world’s largest wholesale supplier of illegitimate IPTV streams.
Hosting
Following employee salaries, Flawless’s second-largest expense was hosting providers.
From February 2017 to April 2018, these providers, including well-known international corporations, were paid over £281,600 for their services. None of them have been accused of any wrongdoing.
In addition to these major expenses, Flawless also spent £28,000 on app development, approximately £12,200 to Xtream Codes (which shut down in 2019), £9,500 to card-sharing suppliers, £3,600 to Sky viewing card suppliers, and £1,200 to the WHMCS billing platform.
Over its 22-month existence, Flawless expended at least £818,200 on staff and suppliers, averaging roughly £37,200 per month to maintain the operation.
However, the actual costs, extending beyond financial expenses, were significantly higher.
This investigation and prosecution shed light on the intricate financial workings of large-scale digital piracy services, and the successful outcome demonstrates the dedication of regulatory bodies to curb such illegal activities.
The severe sentences handed down to the five men behind Flawless IPTV serve as a powerful reminder of the legal consequences associated with digital piracy.
For more information about this story, you can view the original report on TorrentFreak.
Following in-depth research on IPTV operations and resellers, we came across this video on YouTube that was quite striking.