In June 2011, authorities in Germany, Spain, France and the Netherlands raided premises suspected of having something to do with kino.to, a site that offered links to a Megaupload-style file lockers containing unlicensed copies of movies, music and TV shows.
Not long after the raids, the site shut up shop. Folks associated with the site were later jailed.
But according to a new research paper, Online Copyright Enforcement, Consumer Behavior, and Market Structure, closing the site had little effect on copyright breaches. Indeed, it may have spawned a new generation of stronger piracy services.
The paper was penned by Luis Aguiar of the European Union’s Institute for Prospective Technological Studies, Jörg Claussen of the Copenhagen Business School and Christian Peukert from the University of Zürich. The three got their hands on Nielsen NetView data that “… monitors the online activity of a representative sample of Internet users by recording all of their URL visits together with visit duration, while guaranteeing them that the data will be kept anonymous.” With that data in hand, the authors set about identifying pirate sites and found that in their January to June 2011 sample kino.to topped their chart of 15 sites of interest with about 6,000 visits per week.
Those visits stopped once kino.to’s service ceased, but a new kinoX.to site that claimed to be kino.to’s the official heir quickly picked up traffic. So did other sites offering similar services.
“Put together, our data clearly shows that the shutdown massively altered the German market for unlicensed video streaming, making it less concentrated and more competitive,” the authors write. Users also started visiting more piracy sites, up to around 1.4 a week from the 1.15 when kino.to was online.
The study does find that former kino.to users did start to spend more time visiting sites selling licensed content, but argues “If we were to take the costs of the intervention into account (raid, criminal prosecution, etc.), our results would suggest that the shutdown of kino.to has not had a positive effect on overall welfare.”
“Finally,” the authors conclude, “the shutdown of kino.to resulted in a much more fragmented structure of the market for unlicensed movie streaming. This potentially makes future law enforcement interventions either more costly – as there would not be a single dominant platform to shutdown anymore – or less effective if only a single website is targeted by the intervention.”
Tag: Piracy
MPAA Pirated Clips From Google Commercials To Make Its Own MPAA Propaganda Videos
And here’s another one from the Sony archives, this time noticed by Parker Higgins. It involves an email thread between Sony TV’s Chief Marketing Officer Sheraton Kalouria and the company’s top intellectual property lawyer Leah Weil (with top TV exec Steve Mosko included in the cc: field). In the email, they’re discussing a new “reputational initiative” by the MPAA. From other emails, it appears that the MPAA finally realized that its reputation was toxic, and figured that rather than, maybe, figuring out why that is, it would put together a marketing campaign to improve the public’s view of the MPAA. Here were the four goals of the campaign:
- Fill the knowledge gap about our industry
- Change consumer perceptions
- Claim our rightful position as innovators
- Reframe our consumer message in a positive tone
I note that “stop suing our customers and biggest fans” and “stop trying to censor parts of the web or destroy innovations that challenge our business model” didn’t make the list. That’s too bad, as either of those steps might actually, you know, help improve the MPAA’s reputation.
But the really amazing thing about the campaign? Apparently at least some of the video involved unauthroized copying of content from… Google. The same Google that the MPAA and studios had dubbed “Goliath” and who they were hell bent on destroying because of the misleading belief that Google helped people infringe on their copyrights. Here was Kalouria’s email to Weil:
Also, I was somewhat horrified that their creative shop used footage from Google commercials in their “Swipe-o-matic”. I kid you not…some of those scenes of people being “moved” by movies are from a current Google campaign…!
Weil only responded with a single word:
Yikes!!!
Yes. If you’ve been following along with the home game, you know that the MPAA is really, really against copyright infringement (or at least that’s what it would have you believe). And it believes that Google is the single-biggest problem in the copyright world these days. And yet, when it’s time for the MPAA to put together some of its own propaganda to put some spit and polish on its down in the dumps reputation, what does it do? Make use of Google’s footage and pretend that the people being “moved” are actually being moved by the MPAA’s movies.
Apparently, infringing on the works of others is okay for the MPAA when it does it itself. And that’s leaving out the extreme irony of using Google’s ad footage as well. It’s unclear if this MPAA film ever saw the light of day, but it would be fascinating to see if anyone has it…
Music Industry Wants Cross Border Pirate Site Blocks
In recent years blockades of “pirate” websites have spread across Europe and elsewhere. In the UK, for example, more than 100 websites are currently blocked by the major ISPs.
In recent weeks alone several new countries adopted similar measures, Australia, Spain and Portugal included.
Opponents of this censorship route often argue that the measures are ineffective, and that people simply move to other sites. However, in its latest Digital Music Report music industry group IFPI disagrees, pointing at research conducted in the UK.
“Website blocking has proved effective where applied,” IFPI writes, noting that the number of UK visits to “all BitTorrent” sites dropped from 20 million in April 2012 to 11 million two years later.
The key to an effective blocking strategy is to target not just one, but all leading pirate sites.
“While blocking an individual site does not have a significant impact on overall traffic to unlicensed services, once a number of leading sites are
blocked then there is a major impact,” IFPI argues.For now, however, courts have shown to be among the biggest hurdles. It can sometimes take years before these cases reach a conclusion, and the same requests have to be made in all countries.
To streamline the process, copyright holders now want blocking injunctions to apply across borders, starting in the European Union.
“The recording industry continues to call for website blocking legislation where it does not already exist. In countries where there is already a legal basis for blocking, procedures can be slow and burdensome,” IFPI writes.
John Deere Thinks People Will Pirate Music With In-Car Computers
Did you know that it’s illegal to tinker with the code in your in-car computer? Thanks to the nuances of the Digital Millennium Copyright Act (DMCA), you’re not even supposed to inspect the inner workings of your vehicle’s circuitry. This is absurd, which is why the Electronic Frontier Foundation (EFF) is fighting for a better policy.
The EFF is currently entrenched in a legal battle to challenge DMCA overreach. In a new blog post—colorfully titled “Automakers Say You Don’t Really Own Your Car”—the digital rights advocates share some of the absurdity that many vehicle manufacturers are slinging to justify the DMCA’s applications to in-car computers. This is the best:
John Deere even argued that letting people modify car computer systems will result in them pirating music through the on-board entertainment system, which would be one of the more convoluted ways to copy media (and the exemption process doesn’t authorize copyright infringement, anyway).
Yes, that John Deere. How about this: If you manage to pirate music in a tractor, you deserve a much better prize than a DMCA letter. You deserve to own the tractor you paid for. Repair it when it breaks down, even! And yes, you should be able to do whatever you want with your car’s computer—within reason.
Ridiculous Ruling In Ireland Requires ISP To Kick Those Accused (Not Convicted) Of File Sharing Off The Internet
There just seems to be something about the way that some people’s brains function (or not) when the word “piracy” is introduced. Over in Ireland, there’s been an incredibly long running battle over whether or not internet access providers need to kick people off the internet if they’ve been accused (not convicted) of file sharing three times. Such “three strikes” rules have been put in place in a few countries, and the evidence shows that they don’t work at all. Not even in the slightest. They don’t slow down the rates of piracy for any extended period of time (sometimes they show a very brief drop before people figure out other ways). They certainly don’t lead more people to buy content. France, famously, led the way with the very first three strikes law, which the country has already dropped.
Over in Ireland, the fight over three strikes has been going on for nearly a decade. Back in 2008, the recording industry sued Eircom, the large Irish ISP, claiming that the company was required by lawto implement a three strikes regime. Eventually, in an effort to avoid legal costs, Eircom caved andagreed to implement a three strikes plan, but with a condition: the recording industry also had to pressure competing ISPs to implement a similar plan so that Eircom customers didn’t go fleeing. The recording industry did just that. The ISPs pushed back and seemed to be vindicated when the Irish Data Protection Commission ruled that a three strikes plan violated consumer privacy, and Irish judges found no legal basis for such rules.
Of course, the recording industry fought back, and a court flat out rejected the Data Protection Commission’s findings, and insisted there wasn’t any privacy issue at all with three strikes.
And, thus, we get back to the lawsuits against ISPs with a judge now ruling against ISP UPC and making some rather astounding statements in the process. The judge, Brian Cregan, appears to have become a true believer in the myths that the recording industry is spreading, and to him “piracy” seems to justify any and all punishment, without any clear concern as to whether or not anyone’s actually broken the law, or whether or not three strikes plans even work. These quotes are fairly astounding:
Mr Justice Cregan said that there was “wholesale theft” taking place on the UPC network. He said that the constitutional rights of “a whole class of persons are not just being infringed but are being destroyed”. The downloading of music for free is destroying the intellectual property rights of creative artists and should be a matter of great concern in any civilised society, he said.
Except, that’s not true. Copyright infringement and “theft” are two separate (and very different) things. And, no constitutional rights are “being destroyed” at all. If someone’s rights are being harmed via copyright infringement, those individuals or companies have every right to bring legal cases against those who are the ones actually engaging in infringement. Arguing that ISPs should automatically cut people off of the entire internet based merely on accusations (that have a long history of not being accurate) would seem to be “destroying” the due process rights of many more people than any copyright infringement. Besides, I would also think that “a matter of great concern to any civilized society” would be things like “due process” and better enabling communications and access to information for all — like the internet does. But, no. If you happen to download a song you like without paying for it, apparently you should be barred from the internet.
“The current generation of writers, performers and interpreters of music cannot have their livelihoods destroyed by advances in technology which allow persons to breach their constitutional rights with impunity.”
Two points on this. Any realistic look at “the current generation of writers, performers and interpreters of music” would recognize that it is an amazing time to be a creative personbecause of the internet. Thanks to the internet, artists no longer are solely reliant on giant gatekeepers to pick them out of everyone else. Instead, they can use these platforms to create, to connect with fans, to promote, to distribute and to monetize their works. More words are being written, more videos are being filmed and more music is being recorded today than any time in history. It’s difficult to see how one can possibly square that reality with this fantasy world of Judge Cregan’s in which he believes that writers, performers and musicians are in trouble.
The reality is that it’s merely the business models of the old gatekeepers that have been challenged. But that is the nature of the free market. If you cannot keep up with the changing times, you go out of business. But Cregan has apparently decided that the world should always look like it did briefly in the 1980s, and the internet upsets all of that, so clearly, it’s the internet that should go.
Not only did Judge Cregan decide that UPC needs to put in place a three strikes plan, but that it should have to cover most of the costs itself, apparently blaming the technology itself for the struggles of the legacy recording industry:
Mr Justice Cregan said the cost of setting up this system had been put at between €800,000 and €940,000, three-quarters of which UPC had argued should be paid for by the music companies.
The judge said however given the music companies’ constitutional rights “are being destroyed” by UPC’s customers, he believed UPC should pay 80 per cent and the music companies the rest.
Cregan is apparently so sure of himself on this issue — despite what appears to be an astounding confusion over what’s actually happening in the world, that he further rejected UPC’s argument that this is a matter for the legislature, not the courts. Instead, Cregan seems to believe that the courts can magically will into place a new regulation kicking people off the internet. He further rejected requests to refer this matter to the European Court of Justice, insisting that his interpretation of the law is plenty.
Music Industry Demands Action Against “Pirate” Domain Names
In recent years copyright holders have demanded stricter anti-piracy measures from ISPs, search engines, advertising networks and payment processors, with varying results.
Continuing this trend various entertainment industry groups are now going after companies that offer domain name services.
The MPAA, for example, has joined the domain name system oversight body ICANN and is pushing for policy changes from the inside.
A few days ago the RIAA added more pressure. The music group sent a letter to ICANN on behalf of several industry players asking for tougher measures against pirate domains.
The RIAA’s senior vice president Victoria Sheckler wants the Internet to be a safe place for all, where music creation and distribution can thrive.
“… we expect all in the internet ecosystem to take responsible measures to deter copyright infringement to help meet this goal,” she notes.
The music groups believe, however, that domain registrars don’t do enough to combat piracy. ICANN’s most recent registrar agreement states that domain names should not be used for copyright infringement, but most registrars fail to take action in response.
Instead, many registrars simply note that it’s not their responsibility to act against pirate sites.
“We […] do not see how it is an appropriate response from a registrar to tell a complainant that it has investigated or responded appropriately to a copyright abuse complaint by stating it does not provide non-registrar related services to the site in question,” Sheckler writes.
In what appears to be a coordinated effort to pressure ICANN and other players in the domain name industry, the U.S. Government also chimed in last week.
According to the U.S. Trade Representative, Canada-based Tucows is reported as “an example of a registrar that fails to take action when notified of its clients’ infringing activity.”
Despite the critique, it’s far from clear that Tucows and other registrars are doing anything wrong. In fact, the Electronic Frontier Foundation
“Domain registrars do not have an obligation to respond to a random third party’s complaints about the behavior of a domain name user. Unless ordered by a court, registrars cannot be compelled to take down a website,” notes Jeremy Malcolm, EFF’s Senior Global Policy Analyst.
“What the entertainment industry groups are doing is exaggerating the obligations that registrars of global top-level domains (gTLDs) have under their agreement with ICANN to investigate reports of illegal activity by domain owners, an expansion of responsibilities that is, to put it mildly, extremely controversial, and not reflected in current laws or norms.”
Law or no law, the entertainment industry groups are not expected to back down. They hope that ICANN will help to convince registrars that pirate sites should be disconnected, whether they like it or not.
Rightscorp Hemorrhages Cash, Profit from Piracy Remains Elusive
In copyright enforcement circles the terms ‘piracy’ and ‘profit’ are often cited in close proximity. Entertainment companies bemoan the alleged profits made by ‘pirate’ sites at the expense of creators, while the same entities claim that piracy is killing their business, even while making billions.
Somewhere in the middle ground lie the groups that seek to turn piracy into profit by punishing the infringements of others. Traditional ‘trolls’ seek thousands from alleged Internet pirates via the courts, but companies such as Rightscorp Inc chase individuals for relatively tiny sums – $20 per shot – for unauthorized content downloads.
It’s a strategy the company insists will eventually pay off but if the latest set of results filed by the Los Angeles-based outfit are anything to go by, investors should be wary of holding their collective breaths.
In a call with investors yesterday things appeared to start reasonably well. Rightscorp President, COO, CTO, and CFO Robert Steele began by reporting how well the company had performed in the final quarter of 2014. Total revenues were almost $242,000, up 56% from the $155,300 achieved in the same period of 2013.
For the full year, things looked even better. From January 1 to December 31, 2014, Rightscorp pulled in close to $931,000 in revenues, that’s 187% up on 2013 when the company generated just $324,000. Steele said the growth in the company’s revenues can be attributed to two key areas.
Firstly, the growing number of copyrights for which the company has contracts to extract settlements from customers. On December 31, 2013, Rightscorp were detecting infringement on approximately 30,000 titles but by the same date in 2014 that had skyrocketed to around 230,000.
Secondly the company says it is getting more and more ISPs on board. It now claims to deal with 233 and has received settlements from customers of five of the top 10 US ISPs including Comcast, Charter, CenturyLink, Mediacom and Suddenlink. The idea is that more ISPs participating should mean more notices being forwarded and a more healthy bottom line for the company. But that’s only the theory.
The problem for Rightscorp is that when compared to the revenue being generated from infringements, its costs are astronomical. It pays out around half of its revenues to its rightsholder clients, which in 2014 amounted to $465,364. But when one looks at the bigger picture that’s much, much less than half of the company’s problems.
In 2014 the company spent around $139,000 on sales and marketing. Its wages bill increased from $637,000 in 2013 to almost $1.15 million in 2014. And last year its lawyers earned more too.
In 2014 the company’s legal bills neared $481,000, that’s up from $355,500 in 2013. The increase is attributed to legal action being taken against the company, including harassment cases currently in the pipeline.
All told, Rightscorp incurred operating expenses of $4,329,602 during the twelve months ended December 31, 2014, versus $2,134,843 for the twelve months ended December 31, 2013.
So, with revenues of approximately $931,000, that’s a loss of around $3.4 million for 2014. The company lost ‘just’ $1.81 million in 2013. Nevertheless, Rightscorp still see their situation as positive.
“We recorded our strongest year yet with an astounding 187% year-over-year growth,” Steele said. “We are confident that by focusing on these growth metrics, we will be able to capture significant growth ahead.”
The company’s latest 10-K filing paints a more gloomy picture, however.
“The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern,” the filing reads.
“The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it establishes a revenue stream and becomes profitable. If the Company is unable to obtain adequate capital it could be forced to cease operations. Accordingly, these factors raise substantial doubt as to the Company’s ability to continue as a going concern.”
While the company’s accounts give cause for concern, the precarious situation is only amplified when one examines Rightscorp’s over-exposure to a limited number of copyright-holder clients. In 2014 a total of 76% of Rightscorp sales came from one client, BMG Rights Management. The company’s contract with Warner Bros. accounted for a further 13% of sales.
If the former pulled the plug (and after a one year contract BMG only needs to give 30 days notice to do so) it could be game over for Rightscorp.
Movie Group To “Kill Piracy” By Not Releasing Movies For Months
This is not how this works… This is not how anything works.
Entertainment companies all around the globe bemoan the fact that their creations cost millions to create and often require years of preparation, but all that can be undone in an instant by pirates.
It’s certainly true that any media – whether movies, music or software – can be instantly cloned and distributed to a potential audience of hundreds of millions. According to the industry the doomsday scenario of this position is that filmmakers, musicians, authors and coders will eventually give up the game and go do something else more profitable instead.
Of course, this hasn’t happened yet, largely due to the fact that the public is still digging deep. Hollywood, for example, is having its best year on record. But what if all content suddenly stopped appearing on physical and digital shelves. What would the pirates do then?
Well, if the threats of India’s Tamil Film Producer’s Council (TFPC) come to fruition, we won’t have long to find out. Plagued by the menace of persistent and large scale piracy of their movies, the Council is close to making the most radical stand against copyright infringement ever seen.
Yesterday the TFPC held their general meeting and of course piracy was high on the agenda. Several solutions were reportedly discussed but one came to the forefront – a complete boycott on releasing films for the foreseeable future.
“Some groups wanted a six-month ban, while others wanted a three-month ban,” said council president Kalaipuli S Thanu.
The producer and distributor, who regained control of TFPC in January following allegations of corruption against his rivals, said that something drastic needs to be done.
“The basic fact is that all producers are suffering losses and we have to look into that. We have asked them for some time to call in all the parties concerned and try to reach a resolution that is beneficial to everybody.”
In addition to promising the establishment of a dedicated anti-piracy unit compromised of ex-police officers, Thanu says that not releasing movies at all will be the best way to hit pirates.
“Piracy will automatically stop when there’s no content. When we stop film releases, say for three months, the movie pirates will go out of business. We are looking into this option because film producers have suffered heavily in the last 24 months,” Thanu said.
Mississippi Attorney General Jim Hood Demands $2,100 To Reveal The Emails He’s Had With The MPAA
As you may know, we’ve been covering the story of Mississippi Attorney General Jim Hood and his campaign against Google. A few years ago, we noted how bizarre it was that Hood and other state Attorneys General seemed to be blaming Google for all kinds of bad things online. It seemed to show a fundamental lack of understanding about how the internet (and the law!) worked. Of course, things became somewhat more “understandable” when emails leaked in the Sony Hack revealed that the MPAA had an entire “Project Goliath” designed around attacking Google, and the centerpiece of it was funding Jim Hood’s investigation into Google, including handling most of the lawyering, writing up Hood’s letters to Google and even the “civil investigative demand” (CID — basically a subpoena) that he could send.
Hood lashed out angrily about all of this, even as the NY Times revealed that the metadata on the letter he sent Google showed that it was really written by top MPAA lawyers. Hood continued to angrily lash out, demonstrating how little he seemed to understand about the internet. He made claims that were simply untrue — including pretending that Google would take users to Silk Road, the dark market hidden site that could never be found via a Google search. Hood also dared reporters to find any evidence of funding from Hollywood, and it didn’t take us long to find direct campaign contributions to his PAC from the MPAA and others.
Given all of this, we filed a Mississippi Public Records request with his office, seeking his email communications with the MPAA, its top lawyers and with the Digital Citizens Alliance, an MPAA front-group that has released highly questionable studies on “piracy” and just so happened to have hired Hood’s close friend Mike Moore to lobby Hood in Mississippi. Moore was the Mississippi Attorney General before Hood and helped Hood get into politics.
We’ve had to go back and forth with Hood’s office a few times. First, his office noted that Google had actually filed a similar request, and wanted to know if we were working for Google in making the request. We had no idea Google made such a request and certainly were not working on behalf of Google in making our request — but Hood’s office helpfully forwarded us Google’s request, which was actually a hell of a lot more detailed and comprehensive than our own. This actually is helpful in pointing to some other areas of interest to explore.
However, after some more back and forth, Hood’s office first said that it would refuse to share the emails between Hood and the MPAA’s lawyers as they “constitute attorney-client communications” or “attorney work product” and that finding the rest of the emails would… require an upfront payment of $2,103.10