Online Journalism Victimized by Piracy Profiteers

Online Journalism Victimized by Piracy Profiteers

by | Ad Sponsored Piracy, Copyright, Piracy, Publishing

Piracy_newsThe Future of the News Industry at Stake

Caroline Little, President & CEO of the Newspaper Association of America, wrote an thoughtful op-ed  this week asking that Congress consider the economic needs of newspapers in any discussions about copyright reform.  In sharing her editorial the Copyright Alliance website noted its significance:

The investment that the newspaper industry makes in journalism, made possible by copyright protection and licensing agreements, contributes significantly to having a vibrant democracy where the public can make informed decisions.

Copyright detractors constantly portray copyright and copyright owners as enemies of the public interest and as obstacles to the public’s access to information. Although news aggregators claim to enhance public access to information, their contribution to the production of top quality content is virtually null. Caroline Little’s words are a refreshing reminder that the interests of content creators and the public are intertwined rather than opposed.

Ms. Little’s editorial emphasizes that in the future, in order to maintain a robust news industry, we must be vigilant in protecting it.

…journalism plays a vital role in local communities and in our nation’s democracy. But it also costs money: Newspapers continue to invest more than $5 billion a year in journalism, far more than any other medium in the United States. Newspapers deliver news and information when and where readers want it, in print, digital and mobile platforms.

To do that, we must have fair copyright laws to enable newspapers to receive fair compensation in support of this journalism.

This year, the House Judiciary Committee, the Commerce Department, the Copyright Office and others are looking at potential changes to the Copyright Act. The newspaper industry applauds these efforts to ensure that copyright law is best suited for the digital age. We hope that any changes to the Copyright Act will continue to ensure that content creators — including those who invest in journalism — receive fair compensation.

Ms. Little’s editorial focuses on the threat posted by for-profit aggregator sites that, “exist solely to aggregate content from the websites of original publishers for the sole purpose of selling this content to business users at a considerable profit.” Clearly the news business is not exempt from the type of content theft/monetization schemes that have long afflicted music, and more recently movies.  As with the music and film industry, this piracy undermines legitimate journalism’s ability to publish and thrive online.  As Ms. Little notes:

Newspapers’ concern in this area is not the personal use of newspaper-generated content but rather its use by businesses that benefit financially through the unlicensed monetization of that content. By taking newspaper content without paying for it, these companies undercut the fundamental economic model that supports journalism that is so important to our communities.

Ironically, the same day I read Ms. Little’s editorial, I came across a clear example of the piracy publishing scourge that she’s writing about.  I happened to be searching for news on the season 2 premiere of Netflix’s hit show, “Orange is the New Black,” scheduled for next month.  I clicked on a link and was taken to a story posted on freenewspos.com , “Orange Is the New Black’ Season Two Is More Bingeworthy Than the First – The Daily Beast.”

piracy-publisherAt first glance, I thought it legit.  After all, the news website The Daily Beast was mentioned in the headline.  I read the story and clicked on the Facebook link to post it on my Vox Indie Facebook page. Only then did I realize it was a pirated site for print when the post promoted the freenewspos.com rather than the article.  I did a double-take and discovered that the operators of freenewspos.com had copied the entire Daily Beast story and posted it, word for word, to their site.  As is typical in piracy for profit schemes, advertising appears adjacent to the piece.  The site operators earn income by stealing the work of journalist  Kevin Fallon from the Daily Beast.

Adding insult to injury, it’s a Google-sponsored AdSense ad that adorns this pirate page so Google’s making money at the expense of The Daily Beast too.  Of course Google has long been in the business of enabling and profiting off pirated content, and now I can add online journalism to the list of industries that suffer from Google’s ad network profiteering.  These screen captures showing the original Daily Beast story and its pirated counterpart.

daily-beast-oitnb-piracy

 

Also note the disclaimer at the bottom of the pirated version, “Disclaimer statement: The point of this article or rights belongs to the authors and publishers. We take no responsibility for the content of this article and legitimacy.”  The domain is hidden behind a company called Moniker Privacy Services.

When you click the “who we are link” a page pops up in Italian.  Drilling down into a translation of the “Terms of Service” one finds this:

…you want to publish or print into your website, blog, forum, RSS feed or in any other publication, an article taken from our website, you must follow these rules: Respect the author’s copyright by publishing the entire article without making any changes. [emphasis added]  Include all the information present in the author’s box at end of article.Do not change both the title and the content of the article. Leave all links in the article with their syntax. Insert at end of article republished claims on our website with active link: Article taken from: freenewspos.com not republish our article in sites that contain illegal or mp3 files, information for hackers, bad language, violent content glorifying racism or contain pornography, child abuse or exploitation of children, adults or animals, or any other activity deemed illegal or contrary to applicable Italian laws. Do not republish our article via unsolicited email, spamming, or pop up ads. Never sell any article taken from freenewspos.com fees not ask to read an article taken from our website.

Seems that it’s OK to pirate another’s content as long as you link to the original?  Not exactly how copyright law is supposed to work, but hey, in our online environment it seems as though making up things as one goes along is fine and dandy.  As Ms. Little points out, “The most convenient way to request permission to copy and distribute material is by contacting the publisher of the content. In addition, clearinghouses exist that provide an easy way for business users of content to obtain redistribution rights.”  This site never mentions asking the author for permission.

There’s also a somewhat Freudian typo in the site’s FAQ section as well an ironic (English) acronym in use.  I believe it should read, “How do I use POS?” but instead it reads:

How do I sue POS?

The application operates in a complete automatic fashion. A reader is able to obtain subscription and read information without the need to log in. If you provide your E-mail, you will be able to access the POS management application,
where all notifications from POS and news can be viewed in full (POS does not send you spam or advertisements). Other advanced functions will also be available.

POS will not place any restrictions on how you use the application.However, your use and development of the application must not infringe the reputation of POS,nor cause any damage to any of its facilities. You must ensure third party rights are protected.instead of POS, as POS does not hold any copyrights of services provided by the aforementioned third party.

POS does not place any restriction on the contents or the way your articles are published,whether you are a reader or a writer. But, POS will not be held liable for any third party claims against the accuracy or the legality of any contents published.
You are not allowed to publish or paste any material involving defamation, racism, pornography, violence and any contents forbidden by laws of your country or those that POS considers or has been reported to be inappropriate. POS has the right to delete the above mentioned material or contents without notification to its publisher.

I dare say POS is a POS, but I digress.   The fact is that respecting copyright ultimately means respecting creators’ rights to determine how their works are used.  Companies like Google, and this (POS) pirate publishing site, practice their own alternative view of copyright–take what’s not yours and monetize it (illegally) until someone finds out.

When I checked out the site’s Twitter feed is was full of Tweets advertising “free” movies online.  Not surprisingly it’s more scam than substance, as each Tweet linked to a freenewspos.com post with a bunch of keywords or summary for a popular movie title–simply more SEO churn for ad dollars.  One Tweet listed links to a post that, in turn, linked to a YouTube page which, in turn, linked to another off-site ad forwarded from a Google-hosted Blogger, Blogspot.com site.  Google seems to seems to be entwined in this site’s nefarious activities every which way.

POS Twitter.001

When I attempted to actually login and create a user account in order to see how the site worked, the page came up blank on multiple browsers. Maybe it works for users in Italy?  Regardless, it seems pretty clear that freenewspos.com is a site built on a business model dependent on attracting traffic and ad revenue by promoting content that is stolen and, often times, make believe.  Perhaps not much can be done to prevent this site from operating, but surely Google could do better in choosing business partners?

pos-piracy-ripoff.001

Stealth Advocacy Under the Guise of Journalism?

Stealth Advocacy Under the Guise of Journalism?

by | Copyright, Politics, Tech

The fledgling news site vox.com’s (no relation to this site) purported “simple” mission, according to its founder Ezra Klein, is to “explain the news,”  as he noted on his Facebook page:

Vox is a general interest news site for the 21st century. Our mission is simple: Explain the news. Politics, public policy, world affairs, pop culture, science, business, food, sports, and everything else that matters are part of our editorial ambit.

Our goal is to move people from curiosity to understanding:

Screen Shot 2014-05-12 at 9.20.15 AM

Given its stated mission, one has to wonder then, if giving voice to right-wing anti-copyright talking points, under the guise of journalism, fulfills this goal?

This morning as I enjoyed my morning coffee I came across a piece on Vox by former Washington Post columnist Timothy B. Lee.  Since I’ve written about Mr. Lee’s columns in the past (when he touted the sham study by a Mercatus-backed website piracydata.org) I was a bit skeptical when I read his headline, “How Google money is helping turn the political right against strong copyrights.”

In writing about Mr. Lee last October, I took issue with a Washington Post column that trumpeted piracydata.org’s* dubious findings that blamed distributors, not online thieves, for the growth of online piracy.  I noted at the time that Mr. Lee’s piece should be taken with a huge grain of salt given his (undisclosed) ties to an anti-copyright think tank.

Too bad their original graphic (and data) contained errors–a fact belatedly pointed out by the Washington Post’s Timothy B. Lee  in his story which featured the provocative headline, “Here’s why Hollywood should blame itself for its piracy problems.” Lee updated his piece (and changed his headline):

Correction: The original data supplied to us by PiracyData.org was inaccurate. It showed 1 movie available for rental and 4 available for purchase. In fact, 3 are available for rental and 6 are available for purchase. We regret the error…

It’s a shame Lee didn’t also disclose his former ties to the libertarian Cato Institute and Google.

At the time, I wasn’t the only one to cast doubt on Mr. Lee’s journalism.  In a piece published in the Columbia Journalism Review, “A piracy defense walks the plank at the Post,”   Ryan Chittum questioned Mr. Lee’s reporting:

There are many problems with Timothy B. Lee’s Washington Post blog post on Hollywood’s supposed culpability for the theft of its own movies, beginning with the morally unserious jujitsu deployed in arguing that Hollywood is culpable for the theft of its own movies. The Mercatus- and Cato-connected editor of the Washington Post tech blog that aims “to be indispensable to telecom lobbyists and IT professionals alike, while also being compelling and provocative to the average iPhone-toting commuter” also had a major correction that undermines the entire premise of the piece and reveals its one-sided reporting.

Screen Shot 2014-05-12 at 4.31.55 PMFast forward to today’s story.  Mr. Lee, now writing for Vox, has given us a piece that once again manages to deftly advance anti-copyright memes.  At first blush the title is disarming in that seems to take Google to task for its growing lobbying clout, yet if one actually reads the work it’s actually a clear effort to amplify the talking points recently spouted by notorious anti-copyright shill Derek Khanna in a recent Business Insider piece, “It’s Time To Confront the Anti-Copyright Lobby.”   Khanna argued that, “We know the costs of continuing extremist copyright policies completely removed from the Constitution’s original public meaning; the American people deserve better then politicians selling out to Hollywood.”

According to Mr. Lee, this right-wing “shift” against copyright “seems overdue.”

Conservatives have long loathed Hollywood for the liberal values promoted in its movies and for the tendency of Hollywood celebrities to make campaign contributions to Democrats. That might be why Republicans broke ranks more quickly than Democrats in opposing the controversial Stop Online Piracy Act in 2012.

There are also genuinely conservative arguments for reining in the excesses of the copyright system. A recurring theme in both Khanna and Bell’s writing is that today’s laws are far more generous to copyright holders than those that existed in the early years of the republic. Bell and Khanna emphasize that the Founding Fathers viewed copyright as more a government-granted monopoly than a form of property rights.

Mr. Lee is certainly free to write about the debate over copyright legislation, and he appears to have learned the lesson that it’s important to disclose his affiliations with anti-copyright organizations (or risk be outed by the CJR) as he included this caveat in paragraph 3 of his piece.

And, to be clear, I’m not an impartial observer to this debate, having written about copyright issues for both Cato and Mercatus.

However, given his close ties political interests with a stake in the very topic he examines, readers should digest his piece with the skepticism is deserves and appreciate why he insists on characterizing Hollywood’s ongoing efforts to protect its creative products as a “copyright agenda.”

Lee reveals his hand when he concludes with a summation that, while not as biting, clearly mirrors the sentiments expressed by Mr. Khanna:

And internet companies like Google will only become more important to the American economy in the coming years, so Hollywood’s copyright agenda is going to increasingly face bipartisan skepticism on Capitol Hill.

In taking a not-so-veiled swipe at movie industry concerns, Mr. Lee also conveniently fails to mention that independent artists, musicians, filmmakers, authors etc. share Hollywood’s “copyright agenda.”  This omission reveals another reason his superficial analysis remains suspect.  When he writes about copyright, whether in the Washington Post or Vox,  Lee’s predictable, myopic and simplistic condemnations of big Hollywood seem knee-jerk in nature.

Why is it that when writing about copyright reform writers/bloggers like Mr. Lee never seem to acknowledge, nor explore, the fact that “big” Hollywood employs thousands of little people and what the vitality of movie manufacturing means to them?   They also routinely fail to include the perspectives of a vast number of small creators in the United States whose livelihoods depend on copyright.  Why not admit that there are interests besides Hollywood that have skin in the game?

Surely there is room for discussion over revisiting copyright terms, etc. but given that the mindset of insiders like Khanna and Lee–who continue to author pieces that paint discussions regarding copyright reform in broad brushstrokes of black versus white–there’s little chance of that happening.   By ignoring the very existence of (most) creators who depend on copyright, such posts become nothing more than a megaphone for memes generated by the very “think” tanks under scrutiny.  If Vox editors are serious about “explaining the news” why not publish a piece that covers both sides of the debate–deconstructing the shades of gray that exist–and that all too often, are forgotten in today’s so-called journalism?  Help the public “understand” that copyright is a complex issue that deserves to be clarified–not clouded by oblique reportage.

*BTW, it’s interesting to note that piracydata.org’s website hasn’t been updated since late November (2103).  I guess now that it’s  served it’s PR purpose the site’s “dataset” has gone into hibernation.

piracydata.org.001

 

 

Free Speech Under Fire on Russia’s “Facebook” VKontakte

Free Speech Under Fire on Russia’s “Facebook” VKontakte

by | Copyright, Film, Piracy, Politics

imgres-1The goals of protecting free speech and stopping online piracy are not mutually exclusive

The concept of protecting “free speech” is fundamental to sustaining healthy political discourse in any society.  Yet in debates over copyright and content theft, those who oppose bringing any sort of regulation to the internet twist the concept of protecting “free speech” into a disingenuous cudgel to obfuscate the issue and generate opposition to anti-piracy efforts.

With this in mind, perhaps it’s worth looking at a recent example which demonstrates that the issue of squelching “free speech” is not inextricably linked to other forms of online expression, ie. piracy.

Russian social media site (and Facebook wannabe) Vkontakte (vk.com) provides a good example.  Pavel Durov, the site’s founder, was recently pushed aside in favor of ownership interests tied to Russian President Vladimir Putin. Per news reports yesterday, he’s apparently left the Russia saying “Unfortunately, the country is incompatible with Internet business at the moment.”   A piece published in January on TheVerge.com  explained the power play in a piece, “How Putin’s cronies seized control of Russia’s Facebook,”

Durov, 29, sold his remaining stake in VK this week, officially ending his tenure at the helm of Russia’s most popular social network and turning the page on more than two years of turmoil and political strife.

Durov’s departure effectively transfers majority control of VK to business magnate Alisher Usmanov — Russia’s richest man, with an estimated worth of $20.2 billion, and a close ally of President Vladimir Putin. Durov sold his 12 percent stake to Ivan Tavrin, chief executive of telecom provider MegaFon, which Usmanov controls. (The exact sum of the sale was not disclosed, though it is believed to be between $300 and $400 million.) That means that Usmanov and his Kremlin-friendly allies now control 52 percent of the company, raising concerns over the future of VK and the freedom of its users.

It’s a stratagem that appears tied to disputes over political expression and Vladimir Putin’s crackdown on dissent that has become increasingly aggressive of late.

Even though much of the Russian media is known to be under state control, the Internet has remained relatively free, with blogs and social media sites providing an important and creative platform for political discussion. But on March 4, the Kremlin once again took the media battle it has been waging against pro-Western protests online. Russia’s Internet monitoring agency Roskomnadzor blocked 13 profiles associated with the Ukrainian protest movement on the popular Russian Facebook equivalent VKontakte because they “contained calls to commit terrorist acts and take part in unsanctioned mass action.”

Vk.com has been in the Kremlin’s sites since 2011 when Durov refused the government’s request to close down pages that promoted demonstrations against its policies after the results of parliamentary elections were disputed.  According to a report in RIA Novosti:

“We received a request from the FSB to stop the activity of Vkontakte groups calling for riots and a revolution,” Vladislav Tsyplukhin, spokesman for social network VKontakte, wrote on his corporate web page.

“We explained in response that we have been following those groups and cannot block them as a whole just because some individual users have called for violence,” Tsyplukhin wrote.

The accounts of specific users who have explicitly called for public disorder however are being blocked by the company, he said, adding that there had not been any excessive “pressure, threats or rudeness” from the Federal Security Service (FSB) in its requests.

While expressions of political dissent are being squelched, online piracy remains alive and well on the site vk.com.  Earlier this month it was announced that Sony, Universal and Warner were filing suit in Russian courts, charging the site with violating copyright. Since 2011 the site has also been on the Office of the United States Trade Representative’s list of Notorious Markets that “identifies markets around the world that harm American businesses and undermine our workers, through the infringement of intellectual property rights (IPRs).”  

vKontakte.com (also operating as vK.com): The Russian site vKontakte.com, in the List since 2011, is styled primarily as a social networking site, and it is extremely popular in Russia and surrounding countries. While as a general matter, social networking sites can serve many salutary purposes, this site’s business model appears to include enabling the unauthorized reproduction and distribution, including streaming, of music and other content through the site and associated software applications.

In searching the site this week I easily found multiple users who utilized the site as a file host for thousands of websites offering streams of pirated movies.

vk pirates.001

vk pirates.002

According to a Russian blogger atkatyatrubilova.wordpress.com, Vk.com has an advantage over Facebook in attracting users due the fact piracy remains a perk not found on Facebook.

Nevertheless, Vkontakte offers a special feature which attracts more new members daily and makes them spend a lot of time online. Members are able to view thousands of pirated copies of domestic and foreign movies dubbed into Russian. In addition, it’s possible to upload and download video and audio files via the VK Tracker application.

Those who value free speech should be alarmed that Vk.com has fallen under the grip of Putin and his allies.  The battle against piracy remains a separate issue here, and elsewhere.  It’s time to disengage the two concepts.  Fighting for one does not preclude fighting against the other.

Google’s plea against web censorship rings hollow

Google’s plea against web censorship rings hollow

by | Copyright, Piracy, Politics, Tech

google_lobbying_dcGoogle’s True Colors as Lobbying Goliath Revealed

Sunday’s Washington Post featured a story,  “Google, once disdainful of lobbying, now a master of Washington influence” that examined the company’s rise to become a top dog among Washington influence peddlers.  For Google watchers revelations in the piece, authored by Tom Hamburger and Matea Gold, come as no surprise.  However, for those who continue to regard Google as the web’s guardian angel of “free speech,” the story should add a bit of tarnish to its halo, illuminating the company’s extensive back-door maneuverings — the new normal in DC’s world of political puppeteering.

The behind-the-scenes machinations demonstrate how Google — once a lobbying weakling — has come to master a new method of operating in modern-day Washington, where spending on traditional lobbying is rivaled by other, less visible forms of influence.

(Read the e-mails between Google and GMU officials)

That system includes financing sympathetic research at universities and think tanks, investing in nonprofit advocacy groups across the political spectrum and funding pro-business coalitions cast as public-interest projects.

The rise of Google as a top-tier Washington player fully captures the arc of change in the influence business.

It wasn’t too long ago that Google was leading the charge against Washington insiders, those who deigned to file legislation that would target online content theft, the notorious Stop Online Piracy Act (SOPA).  Of course its ginning up hysteria among web users with the rallying cry “don’t break the internet” is simply just another strategic slice of the same (lobbying) pie the company is currently feasting on in Washington.   While the contrivances employed differ, the ultimate goal of protecting the company’s interests (and bottom line) lies at the core both of both.

Of course it’s not particularly surprising to find that one of the nation’s most successful and influential company has invested heavily (more than 15 million in 2013) to influence policy by any means necessary.  What is important is to see that Google’s anti-SOPA efforts for what they were–skillful lobbying that engaged web users as foils in a much larger game of chess.  After the SOPA web blackout, a headline in Tech Crunch gleefully declared, “SOPA Scorecard: Internet 1, Lobbyists 0.”  In his story David Binetti gave this appraisal of the (so-called) grassroots efforts that led to SOPA’s defeat.

Think about that for just a second: A well-organized, well-funded, well-connected, well-experienced lobbying effort on Capitol Hill was outflanked by an ad-hoc group of rank amateurs, most of whom were operating independent of one another and on their spare time. Regardless where you stand on the issue — and effective copyright protection is an important issue — this is very good news for the future of civic engagement.

Looking back, such assessments seem almost quaint in their naivety.  Following the web blackout, in a post-mortem published on 3digital.com  David Rodnitzky got it right:

The SOPA blackout was about as organic as the masses of North Koreans crying in the streets upon hearing of Kim Jong Il’s death. Behind the scenes, the SOPA protest was a well-organized campaign, fueled by the lobbying arms of major Internet corporations.

Moving forward, let’s hope that more people take note.  Google is out to protect Google’s interests, not ours.

Megaupload was not like Dropbox

Megaupload was not like Dropbox

by | Copyright, Piracy

images-1RIAA Sues Kim Dotcom and Megaupload for copyright infringement

Today the Recording Industry Association of America (RIAA) followed the music studios and filed suit against online piracy king Kim Dotcom and his defunct Megaupload cyberlocker website.  The RIAA’s suit charges that Kim Dotcom and his Megaupload cronies, “willfully engaged in, actively encouraged, and handsomely profited from massive copyright infringement of music on the Megaupload service…”

According to a story in Ars Technica, Dotcom’s attorney, Ira Rothken claims that the pirate cyberlocker was simply a cloud-based storage site, sharing a legit business model with cloud-based storage sites like Dropbox.

We believe that the claims against Megaupload are really an assault by Hollywood on cloud storage in general as Megaupload used copyright neutral technology and whatever allegations they can make against Megaupload they can make against YouTube, Dropbox, and others. And we believe that at the end of the day that the court will find their claims to be without merit and that the court will find that Megaupload and the others will prevail.

Nice try, but what a lie.  The business model that Dropbox and other legit sites follow bears no resemblance to the piracy for profit machine run by Dotcom.  The RIAA’s complaint points out one major difference:

Megaupload made money in two ways: premium subscriptions and online advertising.  Megaupload charged “premium” users subscription fees ranging from a few dollars per day up to approximately $260 for a lifetime subscription.  In exchange for payment, premium users would receive faster access to infringing files, including Plaintiffs’ copyrighted works, on Defendants’ computer servers.  Premium users of the site were able to download and upload files with few, if any, limitations…With respect to online advertising, the infringement-driven traffic on Megaupload and its associated websites increased the volume of online advertising impressions and transactions, leading to higher revenues.  Online advertising on Megaupload and its associated websites, which was heavily dependent on the popularity of copyright infringing content to attract website visits, yielded more than $25 million for Defendants.

The other important difference is fundamental to pirate cyberlocker’s pyramid-style business scheme.  Megaupload and other sites modeled after it (Filesonic, Fileserve, etc.) were dependent on a pirate army to spread their offerings (download links and streams) to forums across the web.  After all, without traffic, there was no money to be made and the way to drive traffic to the site was to spread the word and entice web users to visit the site and download infringing content.  Dropbox and other legit UGC sites DO NOT OFFER INCENTIVES for users to upload (pirated) content.  I wrote it about it on popuppirates.com in a blog post “Cyberlockers: Explaining Piracy’s Profit Pyramid.”  Though my post is several years old, given Rothken’s claims, it’s worth revisiting:

First of all, make no mistake, the vast majority of today’s piracy is driven by the thing that has motivated mankind since time began—the desire to make money.  If you take the time to spend a few minutes online exploring websites engaged in piracy (most people who speak out on the issue don’t seem to bother) you’ll quickly recognize that money is at the center of everything.

Mediafire download link (for flm-Unhappy Birthday) featuring Google ads.

If the ads aren’t hitting you squarely in the face, or the offers of high-speed, high quality downloads don’t spark suspicion, then perhaps it’s time to clean your glasses.  How ‘bout I take you on a tour?

Let’s begin with the sites that serve as the lynchpin for today’s online pirates.  No, I’m not going to talk about Pirate Bay or other notorious P2P (peer to peer) sites.  No need for that.  Consumers are all about convenience, and it’s not particularly convenient to download torrents and reconfigure the numerous file parts in order to view a movie.  Today it’s all about the one-stop shopping experience, and for that there’s no better storefront than the cyberlockers where, with the click of a mouse, you can download (or watch) your favorite film.  You’ll likely find other items on your wish list (e-books, music, software, and more) available for easy download as well.

You’ve probably heard the term “cloud based storage” floating around a lot lately.  Well, thanks to companies like Apple, and the recent launch of their cloud based offering called “iCloud,” the notion of storing files online via a virtual hard drive is gaining ground.  Cyberlockers have been providing this “service” for nearly half a decade now, and while there is legitimate activity taking place via some cloud-based storage sites like Drop Box and Yousendit, there are many others whose business model is predicated on content theft.  The now disabled Megaupload.com is a good example of the latter variety. (Read the indictment for a step-by-step tour through the inner-workings of their criminal enterprise.)

How does an illicit Megaupload-like business model  work?  Well, if you want to understand how cyber lockers work 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.

At any rate, if you journey to the cyberlocker of your choice–Megaupload, Filesonic, Fileserve, Filefactory, Uploading, Uploadstation, Mediafire, Megashares, Sockpuppet, Putlocker, etc. you will see enticements offered encouraging visitors to join this type of  profit pyramid.

Cyber lockers offer CASH for uploads.

Why do they do this?  Well the cyberlocker business model depends on traffic.  In order to drive traffic to their site they need content that will attract visitors.  What better carrot than popular movies, books or music?  Never mind copyright, there’s the “safe harbor” provision of the DMCA that allows the cyberlocker operators to essentially look the other way (plead ignorance) when it comes to the content that affiliates upload.  In fact, if uploaders did abide by a site’s published Terms of Service, the cyberlockers would quickly be out of business.

In other words, cyberlockers depend on an army of affiliates to do the dirty work for them.  It’s a scenario that enables the cyberlockers to shield themselves from legal liability, while their servers are simultaneously receiving thousands of  (stolen) files every day–fresh content  sure to attract new (and returning) customers.

So, in order to set this eco-system into motion, the cyberlockers lure their minions.  Uploaders can earn rewards, which usually start at around $35 per 1,000 downloads.  Simply put, the more downloads you generate for your file, the more money you earn.

Cyberlockers are booming thanks to profits from piracy.

 

That fact sets in motion the next level of piracy—the viral spread of the download links.  The affiliate armies take their links and post them on download (Warez) forums far and wide.  The more these links are “shared” across the web, the more money made.

Click to for PDF with 36 posts of viral links.

To further ensure their earnings, these cyberlocker affiliate pirates—I’ll refer to them as CAPs from now on–usually upload their stolen files to multiple cyberlocker sites.  This is called ‘mirroring” and what it means is that if a link is disabled on one cyberlocker site you can easily find the identical file on another.  Each CAP generally has affiliate accounts with multiple cyberlockers so that their illicit income won’t suffer if some links are disabled.

Since they are paid per download to maximize profits, CAPs often break a film file into several parts.   An average size for an uploaded film is around 700 MB (HD films can easily be double that size) but if divided into smaller chunks, requiring multiple links, and thus multiple downloads,  the CAP can earn more download points.  There’s a trade-off to this approach, however, as it can dissuade downloaders who prefer the convenience factor of downloading a “single” file.

Film download broken into several links in order to maximize profits.

Some sites like Megavideo (the streaming partner site to Megaupload) offer visitors the ability to watch an entire film streaming online with no download wait time.  Watch the film, and if you like it,  you can add it to your “collection” and download a copy for later viewing.

So, now that it’s pretty easy to understand how so much illegal content gets uploaded to the cyberlocker sites, let’s look for a moment how site operators turn that traffic into actual income.

At the top of the list is online advertising. Click a cyberlocker download link and you will arrive at a page like this.

Cyber locker site streaming the film “Unhappy Birthday” with Netflix ads serviced by Google.

There’s a link or stream for a  film and there are ads.  Various companies serve these ads, but one can’t ignore the fact that Google and other U.S. based ad servers like AdBrite are ubiquitous on the cyberlockers.   For the record, the ads seen on the image above and below are served by Google, though now that they’ve changed their icon and obscured their connection to them, it’s more difficult to tell.  In any case, no matter who serves the ad,  the cyberlocker makes money and the ad service provider makes money.  The creator gets squat.

Another cyber locker stream with more ads (provided by Google).

In addition to ad income, cyberlockers derive profit by offering “subscriptions.”  In this instance users pay a fee, averaging around $9.00 per month, that enables high-speed downloads on the website.  This means instead of waiting a half hour to download a full film, the entire process takes only 3 minutes.  For those who are repeat customers, this may be money well spent.  In this instance the cyberlocker site is making money and the payment processors (Visa, MasterCard, PayPal and the like) are making money.  Again, the content creator earns ZERO.

Cyber lockers cash in on selling subscriptions for high speed downloads.

In order to boost its subscriptions cyber lockers again turn to affiliate rewards.  Remember those forums where the CAPs go to spread their viral seed?  Well, many, if not most of those forum operators also have relationships with the cyberlockers and are an integral part of the piracy profit pyramid.  For every individual they “refer” who becomes a cyberlocker affiliate, they earn a referral fee.   Thanks to unfettered access to free content and income,  the eco-system of online piracy continues to thrive and grow.

HD-BB an online forum where viral cyberlocker links are spread.

 

Click image for PDF of some forum threads.

HD-BB is just one example of such a forum.   The forum operators boast of the high-quality “rips” shared by its members.  If you drill down into forum posts you’ll quickly discover that moderators only allow users to post links to specific, “approved” cyberlockers that the forum has a relationship with.  There are also links that direct users to the various affiliate options ensuring that the forum earns its fair share.  The forum makes money, the cyberlocker makes money and the creator of the content makes ZERO.

This is what I know.

Now that this black market business model is entrenched as a way of doing business around the globe, what can be done to stop it?  Well, I’m afraid that nothing can stop it–piracy will never disappear entirely–but something can be done to mitigate its effects.  This can happen if we can encourage the majority of websites at the center of this illicit cyberlocker eco-system to become (more) legitimate.

Cutting off the money that feeds this pirate profit pyramid is one part of the equation, but there’s also another component that may be equally important.  It’s a solution that it’s already working right in our own back yard.

I look to YouTube’s solution to piracy as an imperfect, but reasonable fix.  Let’s meet the pirates halfway.  Why not ask them to set up Content Management Systems (CMS) like the one YouTube has? A system like this would allow content owners to determine the fate of their work.  A CMS system basically allows for the fingerprinting of content so that infringing content can be instantly identified upon upload to the cyber locker site.

Dashboard for Youtube’s “Content Management System.”

The content owner could then determine, as they do on YouTube, whether to remove the content, monetize the content, or block it in certain territories.  In this scenario the cyberlocker can still earn money off uploaded content, but only at the discretion of the content owner.  Users will also be less inclined to post infringing content in the first place.  It’s a solution  that allows the content owner to take back control from the pirates (thieves)  and earn income off files that previously were simply stolen.   In this equation, at least everyone gets a piece of the pie.

It’s at this point that the false “piracy is good for business” refrain parroted by piracy apologists begins to gain some traction and some truth.  If piracy’s black market business model can be remolded  into a practice that can financially compensate the content creator–and restore their control of the content–perhaps it could become better for business.

The problem is that cyberlockers are not going to adopt a CMS system just to be nice.  Youtube,  a U.S. company, was forced to act under threat of ongoing litigation and legislation.   The only way today’s crop of cyberlockers can be forced to institute similar content ID systems is if their current business model becomes unsustainable.  For that to happen, like Youtube,  they too will need to face the threat of litigation and/or the long arm of the law.

Dotcom’s attorney can blather on all he wants about poor Dotcom, but it’s nothing more than disingenuous nonsense.

 

 

Zoe Lofgren, Google’s rep in Congress says copyright reform a non-starter

Zoe Lofgren, Google’s rep in Congress says copyright reform a non-starter

by | Copyright, Politics

According to an article published in by Kate Tummarello in The Hill today, Zoe Lofgren doesn’t think much of Congressional efforts to reform copyright law.

Rather than trying to rewrite copyright law, the content industry is working with the tech community to curb online piracy, Lofgren said.

“They’re trying to do collaborative deals with the tech world,” she said. “They’re not asking for a big review of the copyright law.”

Hmmm, last time I checked a  number of people representing a wide swath of the creative industries (indie and otherwise) have become very invested in copyright reform efforts believing that it’s long past time to update the law for the 21st century/digital age.  Of course, when digesting anything Ms. Lofgren has to say about copyright it’s important to remember that  according to opensecrets.org  Google is her #1 corporate campaign donor and the company’s general distaste for laws that protect creator’s rights is well established.

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