by Ellen Seidler | Copyright
As promised, Megaupload’s Kim Dotcom continues to work on a new cloud-based storage service called “Mega.” He’s even released some screen shots to gin up expectations. Of course the files featured on the example reflect a benign use of the site as a place to store medical records and family photos. According to Examiner.com’s Michael Santo, key to the new site is an encryption methodology controlled entirely by the user, not the site itself.
By using 2048-bit RSA encryption for files uploaded to the service, Mega will keep itself safely ensconced within the DMCA Safe Harbor provisions, which places any legal issues for content on the end user, not the site.
The question that remains unanswered is what business model will Mega use? How exactly does Kim Dotcom plan to make money? After all, given his track record, I imagine he’s developing this new business with profits in mind. The reason Megaupload was so insidious was not because it offered a convenient way to upload, store and “share” big files (like pirated movies). Rather, it was because its business model incentivized users to do so with cash rewards and other perks. There are plenty of cloud-based services out there that already do what Dotcom is proposing to do with his new site. And, while there are surely pirated copies shared via those channels, the problem is minimal because those sites aren’t designed to profit from piracy.
At any rate, I suppose we will have to wait a bit longer to see what pirate king Kim Dotcom has in mind for this new “Mega” venture. Somehow I expect that the profiting from piracy will remain a fundamental part of his business model. At least that’s my bet.
by Ellen Seidler | Copyright
Not to beat a dead horse, but surprise, surprise….I did a Google search this morning to see how easy it would be to find download links for “Kyss Mig,” a recently released Swedish indie film. I used Google to search for “download kyss mig” from this past month, and….oops, so much for Google’s new search algorithm that’s supposed to penalize (reported) pirate sites. Why am I not surprised that The Pirate Bay result tops the list?
Maybe if I use the less pirate-centric term “watch” instead of “download” I’ll have better luck finding a legit source? Um, well, no, guess that won’t work either. Once again the top search results are sites notorious for linking to pirated films. Even more maddening is what I discovered when I clicked the first link…
Not only did I find the full film streaming (for free) online (I checked and actually viewed the first ten minutes) but right beside was a Netflix advertisement. When I checked the source of the ad I found it led me back to “doubleclick.net” a Google-owned company. Perhaps this is how Google expects users to find legit copies of the film? After all, Kyss Mig does stream on Netflix….kind of a roundabout way to find the film when I can watch it right here, right now for free! Of course Google makes money from the ad either way (as does the pirate website) so what do they care? Hmmm, perhaps the Google ad placement has something to do with why this pirate site is comes up first in search results? Not to don my tin foil hat but….
A full (free) stream of the indie film “Kyss Mig” was easy to find thanks to Google search results–result that generated ad revenue for Google and website operators. BTW, movie is now offline since I reported it to the distributor.
I guess I’m going to have to be a good girl and use the search terms “buy Kiss Mig.” Only then am I given results that lead me to legit options.
BTW, I notified the distributor that the film was available via this pirate site so as of Monday, December 10th, this illegal stream is history. Too bad I can’t say the same for the website itself.
by Ellen Seidler | Copyright
I have to agree with the MPAA’s conclusion that the shutdown of Megaupload had huge (positive) repercussions for online piracy. This according to a September filing with the U.S. Trade Representative, written by the MPAA’s Michael O’Leary, excerpts of which were published on the TorrentFreak website:
“When these two websites were taken down, many linking websites, custom search engines, and custom streaming scripts that relied on the sites for content became inoperable. Some websites were abandoned by their operators, others lost traffic, while still others shifted their business model.”
Having spent many hours researching online piracy and cyberlockers during these past couple of years I must say that I concur. From what I’ve seen, although new cyberlockers pop up every day, none match the scale or reach of Megaupload. Some of the other major pirate cyberlockers like Fileserve and Filesonic went offline while others stopped offering affiliate awards or anonymous file sharing.
There’s been a domino effect. As cyberlocker cash rewards programs have dried up, so too has activity on various file-sharing forums where those (monetized) links were spread. I suppose one could compare it to a vaccine. The disease of piracy hasn’t been eliminated, but the number of vectors that nourish and spread it has been reduced. Nearly a year out, it seems clear, to me, that the fed’s take down of Megaupload was a major turning point in the battle against content theft online.
Read the full piece on TorrentFreak, here.
by Ellen Seidler | Copyright
A new study (abstract) published by researchers Munich School of Management and the Copenhagen Business School is being used by piracy apologists to bolster the tired meme that piracy is “good” for business. Titled “Piracy and Movie Revenues: Evidence from Megaupload” the summary claims that the shutdown of Megaupload actually hurt, rather than helped, those in the business of making movies:
Box office revenues of movies shown on the average number of screens and below were affected negatively, but the total effect is not statistically significant. For blockbusters (shown on more than 500 screens) the sign is positive (and significant, depending on the specification).
Reading the headlines that followed the study’s release it seems that most who reported on the story neglected to note the equivocation the authors used assessing the impact on revenues for more “average” movies characterizing the “total effect” as not “not statistically significant” yet for blockbusters, it was “significant.” In addition to this convoluted conclusion, upon reading the entire summary, there seem to be more questions than answers.
The MPAA, not surprisingly, posted a cogent critical response on its blog, questioning the abstract’s lack of specificity with regard to its statistical approach:
The reality is that it is impossible to evaluate the validity of the approach or the reliability of the conclusions based solely on the abstract, which does not fully present the methodology or results of the study. In fact, in its present form, this summary abstract raises more questions than it answers…
The post, by Julia Jenks, also raised specific questions about the researchers’ approach asking:
- Are the conclusions being presented and interpreted correctly?
- Which system was used for “matching” like movies?
- How does the research account for box office trends independent of the Megaupload shutdown?
All are good questions that have yet to be answered. In the meantime, I have some questions and criticisms of my own. Per usual, piracy apologists seem only to focus their debate on “big” Hollywood. Reaction to this study is no different. Researchers based their conclusions on (vague) data and box office revenue totals aggregated by Boxofficemojo.com. They noted:
Our counterintuitive finding may suggest support for the theoretical perspective of (social) network effects where file-sharing acts as a mechanism to spread information about a good from consumers with zero or low willingness to pay to users with high willingness to pay. The information-spreading effect of illegal downloads seems to be especially important for movies with smaller audiences.
Press reports and reactions interpreted this observation into splashy headlines like “Piracy Funds Movies” and “Piracy is Good for You!” A number of bloggers seemed eager to conclude that independent films (non-blockbuster types) benefited from Megaupload’s piracy and resultant buzz generated via social networks. It’s a claim that has little basis in fact. These claims also conveniently ignore the fact that box office returns are only a small piece of the story.
If we are going to be honest in our efforts to quantify the impact that movie piracy has on revenue, it’s imperative to look well beyond the box office figures. Today, revenues generated on the back-end via legit downloads, streaming, TV, DVD, etc. are integral to the financial success for any production.
Also, what about the thousands of independent films that don’t have theatrical releases and thus zero box office revenue? How can you make assumptions about piracy’s impact without factoring them into the analysis? These non-theatrical titles are entirely dependent on back-end revenue for revenue. When a site like Megaupload streamed those films for free online it doesn’t take a rocket scientist to comprehend the negative impact it had on legit sales. I’m sorry but how many people watched a film via Megaupload, then purchased it on iTunes or buy the DVD? I’d wager not many.
As for social networking, there’s no doubt that it’s integral to successfully promoting any film, indie or otherwise. However, aren’t such initiatives better left to a film’s own producers than to purveyors of pirated content? Having ventured to many online forums where download links are shared and promoted I don’t see much discussion about a film beyond questions asking “Where can I download it?” and “Why isn’t it the link working?”
The users who populate such sites are seeking free and easy access to films. Some are like hoarders, looking to acquire as many movies as possible to add to their no-cost collections, while others are there because they want to watch a particular film and, rather than pay for it, prefer to watch it for free. The operative word is “free.”
by Ellen Seidler | Copyright
There was news this week that BitTorrent, the developer of software that allows large files to be quickly and easily shared via the internet, has plans to go “legit.” Up until now, despite earlier efforts to compete with iTunes, BitTorrent has been a popular technology among online pirates. Will this new plan change that?
Officials at BitTorrent seem to think so. Matt Mason, the executive director of marketing told the New York Times, “We’re trying to groom the entertainment industry to think about BitTorrent as a partner.” He went on to say:
“The way to solve the content delivery problem is to get out of the way of the content. No one wants to just be the pipes,” he said. “We’re already the pipes and we’re good at it, so it’s a huge opportunity for us to make this transition work.”
Legit online streaming and delivery via services like Netflix and Hulu has become big business. As others have noted, those who consume pirated content are often motivated by convenience and desire. Content distributors have finally caught up, and can often match, or beat, pirate competitors when it comes to easily finding and viewing most popular content. Thus it would seem only natural that a technology such as BitTorrent could be utilized to expand and enhance consumers’ access to legal offerings. The question remains as to whether distributors will choose to partner with BitTorrent and, if so, how exactly will they leverage the technology to enhance their delivery systems and integrate it into current business models?
In addition, if BitTorrent is going to be used to drive legitimate consumption, there’s still the issue of demand. Until content creators and distributors can offer simultaneous, worldwide release of their content, the threat remains that pirated copies will trump the market for legitimate sales.
One has to ask, if a technology like BitTorrent can be utilized in a positive, legitimate and lucrative way, what about piracy’s other big delivery system, cyberlockers? Before the big-daddy Megaupload was shutdown by U.S. authorities, there were rumblings that the site was planning to launch a music site called Megabox that would supposedly enable artists to sell (and earn income) via direct sales/downloads to consumers. Supposedly musicians would earn money even for “free” downloads of their music. Of course the details of how exactly this would be accomplished were vague and the site never got off the ground. Megaupload’s founder Kim Dotcom is supposedly prepared to re-launch a reincarnated Megaupload as Mega in January but there has been no mention of monetization options for artists, only assurances that the new site would not be subject to takedown by U.S. authorities and files would protected by sophisticated, user-control, encryption.
The overall cyberlocker landscape has undergone some major changes in the wake of Megaupload’s demise. Fearful of suffering a similar fate, a number of other major operators like Filesonic, Fileserve, and Wupload, known primarily as pirate havens, shut down. Into this vacuum have come a number of new sites. Though smaller in scale, none seem to have developed anything resembling a legitimate business model, and instead rely on the tried and true, insidious, pyramid-style business model, to acquire (mostly illegal) content and attract downloads (and profits). Most operate outside the reach of U.S. and European authorities and all seem to be hanging on to a business model that, while potentially lucrative, seems headed for a gradual demise in the face of better competition.
Have we reached a tipping point where legitimate models can overtake illicit ones? Not quite, but it appears that the trend is moving gradually in the right direction. As I’ve said before, this evolution will be enhanced through a coalescence of legal efforts (i.e. the Megaupload takedown) and new distribution models and delivery systems that, for the world’s consumers, are both easy and affordable.
As promised, Megaupload’s Kim Dotcom continues to work on a new cloud-based storage service called “Mega.” He’s even released some screen shots to gin up expectations. Of course the files featured on the example reflect a benign use of the site as a place to store medical records and family photos. According to Examiner.com’s Michael Santo, key to the new site is an encryption methodology controlled entirely by the user, not the site itself.
