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Kim Dotcom’s Truth = Nothing but Lies

Megalomaniac Kim Dotcom is at it again. With a launch of a new campaign announced via an all caps headline screaming that “THE TRUTH WILL COME OUT!” on his website, he’s ratcheted up his assault on the big, bad U.S. government, the so-called “copyright lobby” bogeyman and everyone else who views him as the criminal thug that he is.

As part of his campaign to get out his (version of the) truth he’s published a “white paper” called “Megaupload the Copyright Lobby and the Future of Digital Rights.”

In it he claims the case against him “represents one of the clearest examples of prosecutorial overreach in recent history.” He takes particular aim at the White House, claiming his arrest was “propelled by the White House’s desire to mollify the motion picture industry in exchange for campaign contributions and political support.”

He goes on to claim that it’s a case of him and “digital rights advocates, technology innovators and ordinary information consumers on the one side, and Hollywood and the rest of the Copyright Lobby on the other.” He characterizes his highly profitable pirate website as a wonderful public service, with piracy only a minor concern.

Megaupload operated for seven years as a successful cloud storage business that enabled tens of millions of users around the world to upload and download content of the users’ own choosing and initiative. The spectrum of content ran from (to name just a few) family photos, artistic designs, business archives, academic coursework, legitimately purchased files, videos and music, and – as with any other cloud storage service – some potentially infringing material. [emphasis added]

How about some real truth about Megaupload? Until its takedown in January of 2012 it was the largest and most profitable repository of pirated content in the world. Contrary to claims made in his “white paper” Dotcom’s business model was dependent on content theft to drive traffic to, and generate income for, the site. The pirated content on Megaupload included music, movies, e-books and more–and represented the creative work of artists, filmmakers, authors and musicians across the spectrum.

For Kim Dotcom it’s easy to create propaganda that points to the big, bad MPAA or RIAA as the enemy…after all they are in the business of making money right? Well, the fact is, so is Mr. Dotcom and, unlike Hollywood, he doesn’t play by the rules. Why invest in content (and employ thousands to make it) if you can just steal it?

As an independent filmmaker I’ve had plenty of opportunities to witness first hand the piracy supported by Mr. Dotcom’s illegal enterprise, and it wasn’t pretty. Our film, like thousands of others, was easy to find on Megaupload as a free download or streaming in HD, complete with subtitles in various languages. Meanwhile it could be also be streamed or downloaded (with subtitled versions) on legit sites like iTunes, Amazon, Netflix, Busk Films and others portals worldwide.

The difference between these legit online distributors and Dotcom’s Megaupload was that we earned income from our film’s distribution on the legit sites while it was Mr. Dotcom (and his uploading minions) that profited from our film on Megaupload. For indie filmmakers like us who don’t have theatrical releases, back-end distribution is the only way to recoup expenses. Megaupload’s pirated offerings forced filmmakers like us and other content creators to compete against FREE versions of their own creations. How crazy is that?

Despite his splashy spin minimizing the amount of “infringing material” disseminated through Megaupload (and Megavideo), the fact is that without stolen content, he would not be the “Mega” millionaire he is today.

How did the illicit Megaupload business model become a profit machine? Well, it’s helpful to think of a company like Amway. Amway’s business success popularized the multi-level marketing style pyramid business model (or scheme ) whereby the operators at the top of the pyramid recruit people to work for them. They, in turn, recruit more workers who, in turn, sell products to the public. Those at the top make money only if they can recruit, and keep, enough people below to do the actual work. Those doing the bulk of the work earn money, but at a much lower rate than those at the top. It’s the trickle up theory of profits.

Megaupload’s business was predicated on offering enticements to users (uploaders) to join this type of piracy-4-profit pyramid. This approach was essential to maximizing the number of visitors to the site. Another essential part of this equation was making sure the UCG (user generated content) that would attract eyeballs. Sorry, but your ” family photos, artistic designs, business archives” wouldn’t do the trick. No what better UGC carrots than popular movies, books or music? Dotcom didn’t seem too worried about copyright thanks to the “safe harbor” provision of the DMCA that allow UGC sites to easily look the other way (plead ignorance) when it came to vetting infringing content.

In order to set this eco-system into motion, Megaupload lured its worker bees. Simply put, the more downloads users generated for each file, the more money/rewards they earned. These rewards precipitated the next, and most insidious stage of piracy—the viral spread of infringing links. With dollar signs in their eyes, Megaupload’s affiliate armies took their links and posted them on web Warez forums far and wide. The more Megaupload links they “shared” across the web, the more money they made.

Pirate forum search results for new indie film showing more than 300 posts “sharing” download links.

In other words, Megaupload created, and was dependent on, an army of affiliates to do the dirty work for them. The scenario enabled Megaupload (and dozens of cyberlockers modeled after them) to shield themselves from legal liability, while their servers were simultaneously receiving thousands of (stolen) files every day–fresh content sure to attract new (and returning) customers.

Though the site claimed to respond to takedown requests, Megaupload was in fact playing a shell game, by not removing the actual infringing files and instead generating fresh links to replace those removed via the DMCA process. When Megaupload was first taken down in 2012 I wrote a blog post about this and put together a short video demonstrating how this worked (below).

Megaupload Unmasked from fastgirlfilms on Vimeo.

It’s also important to remember the impact Megaupload’s business model had on encouraging and sustaining piracy profiteering across the web. It’s takedown marked a significant turning point in the fight against online piracy profiteering. As I wrote in an earlier post in response to the launch of Kim Dotcom’s new site Mega:

…when U.S. law enforcement took his popular Megaupload offline a year ago, it marked a significant turning point in the battle against online piracy. Since then real progress has been made. Copy-cat sites that modeled the success of Dotcom’s business model closed their doors. At the same time, more options for timely and legitimate online distribution of movies and music emerged–options both profitable for creators and affordable for consumers. Advertisers and payment processors have also stopped partnering with some remaining pirate cyberlocker sites, diminishing their profits and popularity. Other companies, such as Google, have also had to address their role in aiding, abetting and profiting from piracy. Overall, the lure of online piracy as a cottage industry has been greatly diminished.

Kim Dotcom is not Robin Hood and he’s not a hero. He’s a (wealthy) thief who, thanks to technical know-how and a black market business acumen, was able to exploit the work of content creators across the globe for his own, personal gain. Dotcom’s lies cloaked as “truth” may gain him sympathy from his acolytes, but it won’t change the fact that stealing from others isn’t sharing, it’s theft.

IP and Instagram–a Teaching Moment Perhaps?

I had to shake my head when I saw the outraged reaction to Declan McCullagh’s story on CNET.com about changes made Instagram’s “Terms of Service” that supposedly now give the popular Facebook-owned online photo-sharing service the right to “sell users’ photos without payment or notification.” According to McCullagh:

Instagram said today that it has the perpetual right to sell users’ photographs without payment or notification, a dramatic policy shift that quickly sparked a public outcry.

The new intellectual property policy, which takes effect on January 16, comes three months after Facebook completed its acquisition of the popular photo-sharing site. Unless Instagram users delete their accounts before the January deadline, they cannot opt out.

Nowadays social media sites are constantly tweaking their privacy and usage policies, so that’s nothing new. What struck me, however, was how many of the site’s subscribers were suddenly discussing, and expressing concerns about, protecting copyright. Suddenly the concept of protecting IP seems to matter–well, at least when it comes protecting their IP.

In comments responding to McCullagh’s CNET piece, one poster admonished Instagram saying: “You DO NOT have permission to use my stuff just because it’s hosted on your servers.” I agree, but Megaupload’s Kim Dotcom would likely take the opposing view.

Another posted this: “My photos will not sell without my knowledge and compensation. I spend time on my pictures.” For the record, this is essentially what content creators have been saying for a long time in rebuttal to claims that online piracy is OK.

Whatever happens with Instagram’s “Terms of Service” (the company already appears to be attempting to clarify them) I think we should take advantage of this dust-up as a possible teaching moment. Copyright is important to creators, small and large, on Instagram and across the web. Perhaps when people realize what’s at stake with their own creations, they will better appreciate what’s at stake when it comes to the creative rights of others.

Creative Commons Celebrates 10 Years

Creative Commons, a non-profit that promotes the sharing of creative works through the use of its free licenses, celebrated its 10- year anniversary this past Sunday (December 16th). Their licenses do not replace copyright, but rather provide various options that creators can use to outline how their creative work may be used/shared for non-commercial purposes:

The Creative Commons copyright licenses and tools forge a balance inside the traditional “all rights reserved” setting that copyright law creates. Our tools give everyone from individual creators to large companies and institutions a simple, standardized way to grant copyright permissions to their creative work. The combination of our tools and our users is a vast and growing digital commons, a pool of content that can be copied, distributed, edited, remixed, and built upon, all within the boundaries of copyright law.

There’s often confusion about these licenses and what they represent. Certainly they can provide creators with an easy (and free) way to define licensing options for their work. Unfortunately, Creative Commons licensing models are routinely cited by anti-copyright activists as a (better) alternative to conventional copyright in this new age of remix-culture and online “sharing.” Ironic, of course, since Creative Commons licenses are predicated on copyright law, the very copyright law that “freehadists” loathe. As with all copyright licensing, creators (not users) determine how their works are disseminated. A typical copyright “all rights reserved” license puts strict, clear limitations on usage while the Creative Commons “some rights reserved” language allows for more flexible use options in situations where the creator doesn’t desire compensation.

In his book “Free Culture-How Big Media Uses Technology and the Law to Lock Down Culture and Control Creativity,” Lawrence Lessig, a law professor, copyright critic, and founding board member of Creative Commons, has argued that current role of current copyright law “is less and less to support creativity, and more and more to protect certain industries against competition.” In the book’s Afterword, Lessig explains the rationale behind the Creative Commons movement:

Its aim is to build a layer of reasonable copyright on top of the extremes that now reign. It does this by making it easy for people to build upon other people’s work, by making it simple for creators to express the freedom for others to take and build upon their work. Simple tags, tied to human-readable descriptions, tied to bullet-proof licenses, make this possible…Content is marked with the CC mark, which does not mean that copyright is waived, but that certain freedoms are given.

While promoting “freedom” can seem like a benign and worthy concept, one should be mindful of the more nefarious agenda that lurks behind it. As author Robert Levine explains in his book “Free Ride: How Digital Parasites are Destroying the Culture Business, and How the Culture Business Can Fight Back,” “The organization’s licenses depend on copyright law; they just give creators a standard legal structure to sign away certain rights.” Levine points out that companies such as Google, Microsoft and EBay contribute to Creative Commons and that several of its board members represent interests that stand to “benefit from having more work free from copyright restrictions online.” He cautions that Creative Commons “may not have the best interests of artists at heart.” This concern seems justified given the fact the organization appears to have only one artist on its tech-heavy, 15 member Board of Directors.

Political agendas aside, the key with utilizing Creative Commons licensing is that it’s a matter of choice. Just because some creators use a Creative Commons to license their work does not mean those who make different choices should be vilified or ignored. One copyright size does not–and should not–fit all. Those of us who create music, films, photographs and more–own our work (and copyright) and, with the exception of legitimate “fair use,” we should be able to determine how it’s used.

Google Complains that it’s Hard Work to Remove Reported Pirate Links

I came across a story published on today’s Torrent Freak highlighting the conflict between content creators and Google over the search giant’s search results that routinely point to pirated content. As I pointed out in a blog post last week, despite Google’s much ballyhooed August announcement that they would downgrade (not remove) search results for sites routinely reported for piracy, not much has changed.

Per TorrentFreak, and in typical Google fashion, Google’s Legal Director Fred von Lohmann, employs the oft-used boilerplate, disingenuous refrain that the rise in takedown requests could be considered an attack on free speech:

“As policymakers evaluate how effective copyright laws are, they need to consider the collateral impact copyright regulation has on the flow of information online.”

Von Lohmann goes on to complain that when Google instituted their “new” search ranking policy, they received more than 250,000 takedown requests per week and that number has grown to more than 2.5 million. While von Lohmann characterizes this trend as evidence that ”flow of information online” is being obstructed, I see it as evidence that there is a ton of infringing content/product online that has, until now, efficiently flowed (via Google search) from thief to consumer, impervious to any limit or law. Why should we have sympathy for sites linking to pirated or counterfeit goods? How is that an attack on free speech? It’s not.

Why is that the rights of piracy’s victims–the content creators large and small who work to create films, music, books and more–are discounted in favor of thieves who profit from their crimes? Check out those reported search results and you will find hundreds of websites that make money by distributing access to pirated/stolen goods, some in digital form, some as tangible (counterfeit) products. Marc Miller, MPAA’s Senior Vice President for Internet Content Protection points out this inconsistency in TorrentFreak:

“Google’s reading of the data is missing some critical perspective: if the process is cumbersome for Google, it is even more cumbersome for the creators and makers who must constantly be on the lookout to protect their work from theft,”

Piracy apologists like to focus on erroneous takedowns and highlight stories whereby a 9 year-old in Finland had her computer confiscated, or a grandmother in Colorado had her ISP account wrongfully suspended. Certainly mistakes happen, and when they do it’s unfortunate, but they are few and far between when compared with the cumulative harm being done to those whose livelihoods are damaged by rampant online theft. For every search result removed in error there are thousands, if not hundreds of thousands, removed for valid reasons. Sensationalistic anecdotes make for splashy headlines and provide convenient red-herrings for those who defend the piracy status quo–big bad Hollywood versus the grandmothers of the world–but meanwhile the genuine stories documenting piracy’s ruin are routinely minimized or ignored.

Also lost in this debate is the fact that if one takes the time to read the DMCA, it’s easy to see that the law actually favors the reported party, not the other way around. If a site has been removed in error, the owner can use the Google website to file a counter-claim with a click of a mouse. That immediately puts the onus on the party that filed the original DMCA request to go to court and prove the legitimacy of their claim. If that next step isn’t taken, the takedown becomes moot. Filing a court case is a costly endeavor so it’s unlikely that those whose file false DMCA claims, whether in error or purposely, would bother to spend money to enforce a bogus DMCA. Conversely, those content creators who don’t have deep pockets have little recourse when it comes to enforcing a valid DMCA takedown if the other party, representing an infringing (pirate) website, chooses to file a counter-claim.

There’s no denying the current process is rather unwieldy and somewhat broken, but when it comes to rights being at risk, I don’t believe Google has much to complain about. Sure it costs time and money to process the takedowns and remove offending search results–but isn’t that just the cost of doing business? There’s a price paid by those who create content–why should it be any different for those who profit by disseminating it?