Contrary to his self-serving tweet posted on Twitter today, I’d venture to say that the ocean gets its saltiness from a criminal who cries crocodile tears when he doesn’t get his way and can no longer make millions by stealing the work of others.
Contrary to his self-serving tweet posted on Twitter today, I’d venture to say that the ocean gets its saltiness from a criminal who cries crocodile tears when he doesn’t get his way and can no longer make millions by stealing the work of others.
Starting today, we’re launching a pilot program for a small group of partners that will offer paid channels on YouTube with subscription fees starting at $0.99 per month. Every channel has a 14-day free trial, and many offer discounted yearly rates. For example, Sesame Street will be offering full episodes on their paid channel when it launches. And UFC fans can see classic fights, like a full version of their first event from UFC’s new channel. You might run into more of these channels across YouTube, or look here for a list of pilot channels. Once you subscribe from a computer, you’ll be able to watch paid channels on your computer, phone, tablet and TV, and soon you’ll be able to subscribe to them from more devices.
While this announcement is potentially good news in that it offers content creators large and small new ways to monetize their work, unless YouTube purges pirates from the site, it’s is a business model that remains tainted.
I’ve written previously about the various ways YouTube enables (and reaps profit) from movie piracy. With the latest announcement paid YouTube channels, I thought it worth looking at yet another example of their dirty laundry. This time it’s an Argentina-based website that uses popular movie trailers on YouTube to attract customers to its online store selling bootleg DVDs and video games.
I came across the illegal site when I viewed a trailer the French indie film “Tomboy” uploaded to YouTube. The user had uploaded a number of trailers to his YouTube channel and in the description for each, included a link to his illegal website. To add insult to injury, the trailers featured not only a link to the bootleg site but included a its own splashy animated logo edited in.
Here’s the description translated from Spanish:
www.xtopsite.com where you can find the last extrenos on DVD
Pre release movies 20000 retro releases and unpublished
4000 concerts in Argentina and worldwide with the best sound
1500 Complete TV series, so you can finish watching it so steep that you got
20000 MP3 bands and musicians to upload your best technology
20000 programs to make the impossible possible
20000 playstation xbox360 wii chipiadas for your consoles to play online against worldwide
shipments at home just as fast in 24 hours on market
The best prices, the best quality, over 15 years as leaders in the market $ 3. – C / u cd $ 5 – c / u dvd
Promo: if pedis 100 units or more makes you a discount of% 25. -
orders effected only by form: http://www.xtopsite.com
When I navigated to the website, I found this, a virtual storefront that looks legit enough, but isn’t. How could I tell? Well, the first clue was the DVD for the film “42″ which just recently appeared in theaters. ”42″ is not scheduled to be released on DVD until this summer, August 2013.
This site also sells (bootleg) Xbox games, along with advice for finding cracked serial numbers online.
Here’s the specific advice (translated from Spanish):
Clearly these pirates are using YouTube as a means to advertise and drive traffic to their illicit business. Since it’s based in Argentina, they can operate openly with little fear of closure since the country is notoriously lax on piracy. An article published on smartplanet.com sums it up pretty well:
Argentine websites and physical markets questioned for distributing pirated and counterfeit material shows how relaxed local attitudes are toward intellectual property. Students regularly buy photocopies of entire college texts rather than pay for the book, while several Buenos Aires parks fill on weekends with vendors openly selling pirated computer software.
Part of Argentina’s fertile culture of piracy is inspired by a belief that intellectual property rights can be sacrificed in the name of helping the poor and forgotten against large corporations; part is caused by Argentina’s lax enforcement of intellectual property laws; and the rest comes from the country’s isolating economic policies, where import restrictions and high import taxes make buying genuine foreign goods prohibitively expensive.
The Office of the U.S. Trade Representative has placed Argentina on its “watch list” citing copyright infringement as one concern, “However, serious problems persist, including widespread availability of pirated and counterfeit goods, an inefficient judicial system, and a failure to adjudicate civil and criminal cases and impose deterrent level sentences…overall levels of copyright piracy continue to present a problem, as reflected, for example, in a reported growth in piracy over the Internet.”
So while the United States is concerned that Argentinian authorities inaction against IP theft and piracy, a U.S. based company like YouTube help them facilitate it without a problem? As a business that abides by U.S. law, should YouTube/Google do more to prevent an illegal enterprise from using their website to promote/distribute illegal goods?
According to YouTube’s own “Terms of Service” (and I assume U.S. law) the company bears no responsibility in these situations:
The Service may contain links to third party websites that are not owned or controlled by YouTube. YouTube has no control over, and assumes no responsibility for, the content, privacy policies, or practices of any third party websites. In addition, YouTube will not and cannot censor or edit the content of any third-party site. By using the Service, you expressly relieve YouTube from any and all liability arising from your use of any third-party website.
In addition to their “Terms of Service” YouTube offers users a bit more guidance via their “Community Guidelines,” but here, the only reference discouraging “illegal” activities are “Dangerous Illegal Acts” like bomb making and sniper attacks. Nothing about operating illegal bootleg/counterfeiting operations.
Is the situation any different with YouTube’s parent company Google? Not really since Google’s terms of service follows the same murky (though apparently legal) path.
If the bootleg site is in Iran, Cuba or the Sudan, it seems Google may be forced to act, otherwise, despite lip-service that frowns on “dangerous and illegal” activities, linking to illegal businesses is A-OK. If I’m interpreting the verbiage correctly, bootlegging DVDs is not dangerous per se (which obviously it’s not), then the illegal part is moot. Though Google terms state that users aren’t allowed to create websites, ” that have the primary purpose of redirecting visitors, acting as a bridge page, or driving traffic to another website” it appears that the company does little to stop this activity, at least on YouTube.
You may use Google Sites to create websites for your business or to promote your products or services, unless you are in Cuba, Iran, or Sudan. There are some commercial uses we don’t allow. We don’t allow websites that have the primary purpose of redirecting visitors, acting as a bridge page, or driving traffic to another website. We also don’t allow websites that have the primary purpose of profiting from displaying ads from any publisher network, such as sites created with little or no unique content and exist only to display ads.
It is our policy to respond to clear notices of alleged copyright infringement. More information about our copyright procedures can be found on this page: http://www.google.com/sites_dmca.html
Unlawful Use of Service
Our products and services should not be used for unlawful purposes or for promotion of dangerous and illegal activities [emphasis added]. Your account may be terminated and you may be reported to the appropriate authorities.
The U.S. Customs and Immigration Enforcement (I.C.E.) has been seizing web domains as part of an ongoing effort to battle counterfeiting across the globe. Perhaps its time to examine the mechanisms by which U.S. companies indirectly aid such criminal enterprises as well? Why not engage some of our own companies in a discussions aimed at reducing their role in enabling these criminal activities?
On another front, why not enlist the YouTube community in helping to report these questionable sites? YouTube has a system whereby users can flag material deemed to be in violation of “rules:”
Users report content that may violate YouTube’s rules by flagging it. YouTube’s rules are outlined in ourCommunity Guidelines. YouTube staff review flagged videos 24 hours a day, seven days a week. When a video is reviewed and determined to violate our Community Guidelines we remove it.
YouTube seems to have no problem allowing its users to flag innocuous kissing scenes from lesbian/gay tv shows and movies, why not give its “community” an easy way to flag material actually links to illegal content–content that does harm? According to YouTube’s community guidelines:
We Enforce These Guidelines
Okay, this one is more about us than you. YouTube staff review flagged videos 24 hours a day, seven days a week to determine whether they violate our Community Guidelines. When they do, we remove them. Sometimes a video doesn’t violate our Community Guidelines, but may not be appropriate for everyone. These videos may be age-restricted. Accounts are penalized for Community Guidelines violations and serious or repeated violations can lead to account termination. If your account is terminated, you won’t be allowed to create any new accounts. For more information about how the Community Guidelines are enforced and the consequences of violating them, please visit the Help Center.
At present, it’s pretty much impossible notify YouTube about the illegal linking scenario I’ve described in this post because 1) it’s not a “dangerous and illegal act” 2) it doesn’t infringe “my rights.” When I tried to flag the trailer and alert YouTube that this YouTube channel linked to a counterfeit site I was met with a form that required information (like an actual hyperlink to the law being infringed) and legal standing that I don’t posses.
Clearly YouTube doesn’t want to be deluged with false claims, but making an option available for users to report a legal issue that does not involve one’s own trademark or copyright would help.
There may be other technological ways to vet questionable links. Google seems to achieve wonders with its search algorithms. Why not utilize technology to ferret out links to dubious websites posted on their pages? Google regularly labels sites as “compromised” on search results. Of course, when it comes to others attempting to crackdown on criminal websites listed via their search engine Google likens this to an attack on “free speech.”
For now, it seems Google has no legal obligation to worry about its role in facilitating illegal activity like bootleg DVD sales. After all, sharing links to infringing streams and downloads is allowed to fly under the radar, so is it any surprise other savvy pirates link to their sites selling bootlegged copies? Moving forward, one can only hope Google representatives begin to acknowledge this problem and begin to develop efficient and thoughtful ways to deal with it. If Google wants YouTube channels to become a legitimate and profitable means of distribution for content creators, why not get rid of those YouTube users whose activities undermine the livelihoods of these same creators YouTube is attempting to woo?
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.
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).
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.
This past Saturday, Director Stephen Soderbergh gave the keynote address at this year’s San Francisco International Film Festival. In his address on the “state of cinema” Soderbergh spoke about the nature of art, movies vs. cinema, studios, and budgets among other things. He also discussed online piracy’s impact on indie filmmaking:
Theft is a big problem. I know this is a really controversial subject, but for people who think everything on the internet should just be totally free all I can say is, good luck. When you try to have a life and raise a family living off something you create…
There’s a great quote from Steve Jobs:
“From the earliest days of Apple I realized that we thrived when we created intellectual property. If people copied or stole our software we’d be out of business. If it weren’t protected there’d be no incentive for us to make new software or product designs. If protection of intellectual property begins to disappear creative companies will disappear or never get started. But there’s a simpler reason: It’s wrong to steal. It hurts other people, and it hurts your own character”.
I agree with him. I think that what people go to the movies for has changed since 9/11. I still think the country is in some form of PTSD about that event, and that we haven’t really healed in any sort of complete way, and that people are, as a result, looking more toward escapist entertainment. And look, I get it. There’s a very good argument to be made that only somebody who has it really good would want to make a movie that makes you feel really bad. People are working longer hours for less money these days, and maybe when they get in a movie, they want a break. I get it.
But let’s sex this up with some more numbers. In 2003, 455 films were released. 275 of those were independent, 180 were studio films. Last year 677 films were released. So you’re not imagining things, there are a lot of movies that open every weekend. 549 of those were independent, 128 were studio films. So, a 100% increase in independent films, and a 28% drop in studio films, and yet, ten years ago: Studio market share 69%, last year 76%. You’ve got fewer studio movies now taking up a bigger piece of the pie and you’ve got twice as many independent films scrambling for a smaller piece of the pie. That’s hard. That’s really hard.
You can find the transcript of his entire address here or listen to it or watch below:
Over the past months, as I’ve journeyed across the web investigating pirate websites I found that many shared something in common (besides stealing content to profit off the work of others). Along with illegal downloads to popular movies, often times the sites deliver pop-up ads for MacKeeper software, a product of Silicon Valley based Zeobit.
Ads and piracy go hand in hand. It’s how pirate sites make money. Ads appearing on such sites run the gamut from Progressive Car Insurance to online sex chat, but more often that not it seems, I’m greeted by an advertisement for MacKeeper.
Had these ads been an isolated incident, it wouldn’t bother me. Unfortunately as far as MacKeeper goes, it’s not limited to an ad or two here and there. In fact, if you were to asking me the most common advertisement that pops up to fill my computer screen via pirate downloads, it’s MacKeeper. Below are just a few examples that I’ve recently come across after clicking an illegal download link that I was investigating.
MacKeeper’s advertising methods have generated controversy in the past, not because of the fact the company seems happy to partner with pirates, but because of their ubiquity. According to a story published on Cult of Mac, the software itself isn’t particularly popular among Mac aficionados for this reason. The company’s PR director Jeremiah Fowler explained their approach to advertising to the Cult of Mac’s Leander Kahney this way:
Legitimate Mac Users who are annoyed or tired of our advertising campaigns or partner’s campaigns. Do we advertise? Yes! Do we advertise aggressively, I would not like to use that term but we do have a massive advertising presence online! [emphasis added] We have had 15,000,000 downloads of MacKeeper and have a less than 3% refund rate. The reality is that many people are truly happy with the product even if they hate the advertising (and unfortunately some do). The bad part is some people take their hatred for advertising to a level where they dedicate hours of their lives to making MacKeeper a “Forum Punching Bag”… In a perfect world there would be no advertisements on radio, TV, billboards or the internet, but this is not a reality. As long as there are ads, there will be people who hate them.
We believe that we have a great product and we want people to know about it and the only way to do this is to explore every medium of advertisement. [emphasis added] It is like investing everything in to a great restaurant and hiring the best chefs, buying the best food only to hide the location somewhere in the woods and then tell no one about it. Then wondering why no one comes to your restaurant? We are discussing phasing out our ads and trying to please the vocal minority, but we realize that pleasing everyone is impossible.
It’s not the ads or the product that I mind, it’s where their ads appear. Given the fact the MacKeeper ads pop-up more often than not on pirate downloads, I think it’s safe to generalize and say they must send a great deal of money the pirates way. As Mr. Fowler made clear in his conversation with Cult of Mac, the company views its advertising methods as good business. Never mind, it seems, who they are doing business with.
I attempted to reac Zeobit for comment, but as is usually the case with Silicon Valley tech companies, transparency is not part of their business plan. (Updated 4-24-13 in blue) Following the publication of this blog post, I did actually receive an email from Jeremiah Fowler (quoted above). His response included the following:
As you know we are a software company and illegal software pirating is one of the biggest threats to our livelihood and that of our entire industry. Software is vulnerable in the very same ways that an artist or musician would be impacted. It is a fact that when no one buys a movie, album or software application, there will be no money to invest in future projects or research and development. You can quote me when I say In straight terms “we do not support illegal downloading and we think that it sucks”.
These pirate websites are actually partnered with major Ad Networks and Media Buying Agencies and not MacKeeper. We purchase only impressions or click units and the Ad / Media companies dictate on what websites where they will appear and how often they appear on millions of basically nameless websites across their network. The only reason you personally see so many of our ads is because we buy ads that target only your operating system and nothing more. These guys can only filter ads between Mac or PC and very little else. We advertise on a relatively large scale with the biggest networks to make sure that people actually do buy our software and we do not partner with these sites where people will not buy anything anyway because the whole reason they are on that particular site is to steal. It is a total waste of money for our ads to even be displayed on these channels, but that is also why you see ads for insurance and other random things because these companies just have millions of sites in their network and throw ads based on purchased space or clicks. The flaw is in the terms and conditions of what type of sites these ad networks will allow for the delivery or their customer’s ads. As far as being against illegal downloading we are actually on the same team.
While I understand full well that MacKeeper is a software company and that software is as vulnerable to piracy as are other forms of digital content, I find little satisfaction in his explanation as to why the ads so often pop-up on pirate websites. I in fact do use a Mac and ironically actually OWN the MacKeeper software. I’m well aware that today’s browsers can identify one’s operating system (as well as one’s web history), otherwise it’s likely I would see ads for their PC product.
However, the fact that browsers are smart and “Ad Networks and Media Buying Agencies” partner with these sites, does not absolve Zeobit (or any advertiser) from responsibility in when it comes to the issue of brand-supported piracy. It’s easy to blame the messenger, but why aren’t these companies demanding more oversight on behalf of ad servers? Certainly Zeobit is not the first company to employ the “we can’t control where our ads appear” excuse. I’m asking why not?
As I told Mr. Fowler in my response to him, when companies advertise in print publications, they are acutely aware of where their ads are placed and what editorial content appears next to them. When it comes to the internet, however, these same companies seem content to participate in an online free-for-all where the goal of saturating web visitors with ads for their products–no matter what site the ads are linked to. I must point out one obvious exception to this–somehow these ad servers do avoid porn sites, so their must be some vetting/filtering going on at some level. Why can’t this happen for sites that are engaged in promoting (illegal) downloading? If companies that pay for advertising are against online piracy, why not withhold their business from ad servers that do “partner” with such sites?
Ironically, the company touts its belief in “social responsibility” on its website’s front page. It seems that their view of “social responsibility” does not extend to creator’s rights. It’s shameful that the company doesn’t take action to prevent their ads from subsidizing what is, essentially, illegal activity.
For the record, Zeobit receives an A- on the Better Business Bureau’s review website. From my perspective, the company should receive an F when it comes advertising accountability. Per usual, profits trump ethics.