copyright | Vox Indie

Mega Goes Live but Business Model Remains Murky

Kim Dotcom’s much ballyhooed new venture, Mega, has gone live. and is, according to a tweet from the mastermind himself, already wildly popular, “250,000 user registrations. Server capacity on maximum load. Should get better when initial frenzy is over. Wow!!!” It’s no great surprise that there’s a lot of early interest in site, but the real question going forward is whether anti-piracy activists should be running scared? For now, it seems too early to tell. The key to whether this new cloud-based file-sharing site will become the new nexus for online piracy depends on what business model is used, and at this point, it’s difficult to decipher exactly how this will all play out.

There are already various cloud-based file-sharing sites, similar to the “new” Mega–sites DropBox and YouSendIt that already allow users to easily share large files across the web. However, unlike Kim Dotcom’s now-defunct Megaupload site, these services do not incentivize uploads. In other words, in contrast to cyberlocker favored by pirates, these legit sites don’t offer cash rewards based on the number of times a file is downloaded. As a result, most people who use these cloud-based file-sharing services do so because they have actual business to conduct, or seek to share files with family or friends.

Certainly some file-sharing that’s technically “illegal” takes place, but without cash carrots offered to uploaders, it’s relatively inconsequential in terms of the big picture. The success of DropBox and YouSendIt is not predicated on the need to draw traffic and generate ad clicks. Theirs is a business model that does not incentivize piracy on a viral scale.

Perusing the new Mega website, I found some references to its planned business model, but no mention (yet) of any individual “partner” rewards programs like those found in its previous incarnation. Below is a solicitation for “Mega Storage Node” partners (located outside the United States). This program seems focused on attracting additional host companies that wish to integrate Mega’s infrastructure into their own businesses.

The new “Mega” is seeking partners to become a “storage node.”

Like Megaupload, Mega also offers tiered ”Pro-memberships“ which offer users greater storage and speed options. Prices range from $9.99 per month to $29.99 per month.

Although the new site has established its operations (and servers) outside of the United States, Mega’s “Terms of Service” does feature boilerplate language regarding intellectual property and copyright.

Note that Mega’s terms also includes language that includes references to protecting its own IP.

Our IP

13. The license that we give you to use the website and our services does not give you the right, and you can’t reproduce or use any of our copyright, intellectual property or other rights other than for the purposes of using the services and the website or as allowed under any open source licences under which we use intellectual property provided by others. The open source code that we use, where we obtained it, and licences for that code are all referenced in our FAQ.

14. You are not allowed to, and you can’t let anyone else, copy, alter, distribute, display, licence, modify or reproduce, reverse assemble, reverse compile (whether digitally, electronically, by linking, or in hard copy or by any means whatsoever) or use any of our copyright, intellectual property or other rights without getting our permission first in writing, unless in order to use our services and the website or as allowed under any open source licences under which we use intellectual property provided by others. The open source code that we use, where we obtained it, and licences for that code are all referenced in our FAQ.

At the moment the new site, not surprisingly, is running as slow as molasses due to heavy traffic. It remains to be seen if, and how, its presence will impact the online piracy landscape going forward. Right now this new site doesn’t seem all that revolutionary. For the end-user, it’s just another cloud storage solution.

No matter what transpires, Dotcom is clearly relishing his moment back in the spotlight. He’s already busy tweaking Hollywood posting this Tweet and image a couple of days ago. Despite his self-important cockiness, in the grand scheme of things, I don’t think he’ll be getting the last laugh.

Though Dotcom would likely disagree, 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.

Maybe Dotcom’s new Mega will be legit, maybe not. The world will be watching, but I’m not too worried. At least not yet.

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.

How Are Google’s Anti-Piracy Search Policies Working?

It’s been a few months since Google announced a new initiative designed to lower search results for web-sites reported for piracy. According to Google, legitimate sites would move up and pirate sites would move down:

We aim to provide a great experience for our users and have developed over 200 signals to ensure our search algorithms deliver the best possible results. Starting next week, we will begin taking into account a new signal in our rankings: the number of valid copyright removal notices we receive for any given site. Sites with high numbers of removal notices may appear lower in our results. This ranking change should help users find legitimate, quality sources of content more easily—whether it’s a song previewed on NPR’s music website, a TV show on Hulu or new music streamed from Spotify.

Since we re-booted our copyright removals over two years ago, we’ve been given much more data by copyright owners about infringing content online. In fact, we’re now receiving and processing more copyright removal notices every day than we did in all of 2009—more than 4.3 million URLs in the last 30 days alone. We will now be using this data as a signal in our search rankings.

At the time, Google’s announcement seemed encouraging, despite their careful use of the more flexible phrase “may appear lower” as opposed to “will appear lower.” Now that some time has passed, I thought I’d do a random search to see how well Google’s new algorithm is working to thwart piracy. I decided to do a fairly generic search using the terms “watch free movies online.” I did not specify a time frame or put the search terms in quotes. This was the result.

Result for search “watch free movies online”

The first two results were “sponsored results” (shaded in pink) which direct users to legitimate sites Yideo and Netflix. However, the top two non-sponsored sites are sites offering pirate links. I clicked “LetMeWatchThis” the second non-sponsored result. That took me to this landing page which entices users with an array of movie poster thumbnails from current releases (many haven’t even been released on DVD). I chose to click on a thumbnail for film that is scheduled to be released next week on December 4th, 2012–The Odd Life of Timothy Green.

Below a short summary of the film, there’s a list of 30 links to watch/download it. I did not examine each and every link, but aside from several “sponsored” links, most point to sites known to host pirated films.

Ignoring the first one (it’s a sponsored link that leads to an illegal pay-to-watch site) I clicked on the link to “Sockshare” a popular cyber-locker site (one of many to flourish in the vacuum left by Megaupload’s shutdown). After clicking the link, and navigating past an ad (remember these pirate sites are in the business of making money off stolen content) I arrived at an embedded, full stream of the film.

Remember, according to Google’s explanation of its new policy, “we will begin taking into account a new signal in our rankings: the number of valid copyright removal notices we receive for any given site. Sites with high numbers of removal notices may appear lower in our results.” With this in mind, I decided to check Google’s “transparency report” to see how often this particular domain had been reported for copyright violations. According to these results, there had been more than 10,000 requests for the URL to be removed.

I also checked the value of this website using and found this:

If these Alexa statistics are accurate, it’s safe to say that operating this particular pirate site is a lucrative endeavor indeed. It’s long been notorious for its illegal links. The fact this site comes up second in a Google search for to “watch free movies online” is certainly a factor in their robust income. Despite Google’s pledge to begin “using this (copyright infringement reporting) data as a signal” to adjust search rankings, their new algorithms don’t seem to be penalizing this site in the least. To the contrary, it seems this site is being rewarded with a plum ranking resulting in plump profits.

The only conclusion I can draw from this is that, despite lip-service to the contrary, not much has changed when it comes to Google aiding and abetting websites that profit from piracy.

Monday Memo

Correction to my earlier post on North Country Gazette.

Please note that my earlier post about the North Country Gazette ceasing publication was in error. The publisher, June Maxam wrote me to explain that the paper is not ceasing publication. I apologize for the error.

With the Election Over, Attention Turns Back to Congress and What Awaits Musicians

Chris Castle takes to the pages of Huffington Post to explain five reasons why musicians (and those who care about music) should not support the misleadingly titled “Internet Radio Fairness Act.” Here’s Reason #3:

3. Pandora Wants to Legislate Profits on the Backs of Artists: Now that Pandora has a $2 billion or so market cap, the simple truth is that Pandora is trying to legislate its profits on the backs of artists and so does Google and Sirius XM — a company that has $1.5 billion in cash on their balance sheet. This is just about money, it’s not about music.

But for musicians, the salary remains the same.

Read Chris Castle’s full post “The Tide has Risen-Five Reasons to Worry About the Radio Fairness Act” here and more on the growing political debate in a November 4th story from the NY Times “Fight Builds Over Online Royalties.”

China Daily Reports that Free Music Online is Coming to an End

I’ll believe that headline when I see it, but when it comes to cracking down on piracy in China I suppose any news is good news. The China Daily is reporting that online music distributors in China are in talks with Warner Music Group, Universal Music and Sony Music Entertainment to “charge” for music downloads. Not everyone is supportive, nor optimistic about the proposed effort. Read the entire story on China Daily here.

Debate Over Internet and Tech Issues Keep Low Profile During Campaign

Despite a long and cantankerous campaign, neither candidate seemed to pay much attention to issues surrounding the internet and technology. That’s bound to change once the dust settles. For a breakdown on the two campaigns and their take on technology issues, check out this report by the Information Technology and Innovation Foundation.

U.S. Government Utilizes Vietnamese Website Notorious for Piracy

According to an Associated Press story published on NBCnews.com, the U.S. embassy in Vietnam is utilizing a social media account on Zing, a website notorious for online piracy, in an effort to reach out to the country’s young people. This, despite the fact that Coke and Samsung recently pulled advertising from the site due to concerns about rampant piracy. Embassy officials defend their presence on Zing saying that options for outreach are limited in a country where the government controls most media.

The embassy said it recognized the concerns for U.S. copyright interests posed by Zing but that it believed that “contact with users of this website” could reduce traffic or infringing activity on it. The mission sometimes uses its Zingme page to post about copyright infringement.

Its statement noted that the site had removed, at its request, the link to infringing material that appears on other Zingme pages as a matter of course. It also noted to its lack of options in a country where the Communist government controls the media, saying “there were few spaces for public discourse and intermittent access to Facebook”, referring to a block the government sometimes puts on the American social networking site.

Artists in Asia, like those in the U.S. who are feeling the negative impacts of rampant online piracy, are critical of the U.S. embassy’s stance on Zing.

“Zing is destroying the industry and they know it,” said record producer Quoc Trung, who is leading a campaign against online piracy. “We need people to pay for music, not just click on it. It is now or never.”

To read the full AP story, go here.