by Ellen Seidler | Ad Sponsored Piracy, Copyright, Piracy, Politics
Today the Digital Citizen’s Alliance* released a report “Good Money Gone Bad: Digital Thieves and the Hijacking of the Online Ad Business,” which how quantifies how online piracy is fueled by ad-supported content theft. Highlights of the report’s findings include:
1. The websites researched make a projected $227 million in annual ad revenue. The 30 largest sites that profit exclusively from advertising averaged $4.4 million annually, with the most heavily trafficked BitTorrent and P2P portal sites topped $6 million annually.
2. Even small sites studied could make more than $100,000 a year in advertising revenue.
3. Because they rely entirely on the works of others for their “product,” their profit margins range from 80% to 94%, underscoring that crime can pay when you steal other people’s content.
4. Nearly 30% of large sites carried premium brand ads.
5. Nearly 40% of large sites carried legitimate secondary ads.
Tom Galvin, Executive Director of the Digital Citizens Alliance, explained the significance of the study results this way:
This report confirms that content theft isn’t a cottage industry—it’s big business. Plain and simple, ad-supported rip-off sites are exploiting the Internet and advertising community to get rich. The result is a damage to brand value for advertisers and serious harm to people who work in the creative industries. We hope this report pushes the online advertising community to take additional steps to protect brand value and stop ads from appearing on content theft sites that are undermining the vibrancy and safety of the digital marketplace.
The issue of ad supported piracy is a topic I’ve been researching and writing about about since the spring of 2010 when my indie film was released (and pirated). When I began searching for, and removing, pirated copies of our film online I quickly discovered that piracy was big business and driven by profits and created a blog (www.popuppirates.com) to document how piracy’s business model worked and the significant role advertising revenue played in incentivizing online piracy and sustaining it. Given today’s news I thought I’d take a look back and include an excerpt from a post I wrote four years ago that unfortunately–as the DCA study results show–could just as easily have been written today.
I created this video, “Follow the Money: Who Profits from Piracy?” to provide an overview on piracy’s link to advertising profits.
Online piracy isn’t about altruism, it’s about income. Today’s technology allows web pirates to steal content and monetize that content with a click of a mouse. Meanwhile, “legit” companies encourage and facilitate this theft while also profiting from it (ad service providers, advertisers and payment processors). The time has come for reasonable measures to be taken to discourage this theft. Content creators and consumers will benefit. Only the pirates and those who profit from their theft will lose.
In the process of scouring the web for the thousands of illegal download links and online streams of our film (more than 55,000 documented to date) I quickly discovered that various, theoretically legit companies, seemed to be (indirectly) generating income through the placement advertising on websites featuring streams and download links to pirated films. In addition, and most troubling, is that fact these ads generate income for operators of these pirate websites and add to generous profit totals for ad providers ($2.80 billion for 4th quarter 2011 for Google’s AdSense – all sources). More on Google’s financials can be found here.
The nature of the advertising varies, but I was dismayed to discover that the ads were not limited to cheesy online gaming sites, etc. Rather, they include a number of legit companies like Sony, Radio Shack, Pixar, Porsche, ATT, Chase, Network Solutions, Auto-Zone and even Netflix (particularly ironic since they carry our film). The list of advertisers goes on and on. It’s the same situation, if not worse for other films. Ads are ubiquitous on pirated content throughout the web…
…This dubious connection to piracy is not limited to the companies whose ads appear on various pirate sites. Even more problematic are those companies, like Google (via AdSense), that generate their own robust revenue stream by providing the interface for the pirate-site pop-up ads themselves. In this equation everyone, except the actual content creators, make money from this theft.
One could argue that the companies that provide the ads, as well as the companies being advertised, have no control over where the ads appear and thus bear no responsibility–hear no evil, see no evil? Is claiming ignorance any way to run an ad campaign or a business? It seems that the answer is “yes”–as long as there’s profit involved.
From my perspective, their implicit involvement, intentional or not, should be revealed. Every time one of these illegal files is added to a website where these ads appear, Google and et al earn money at the expense of the content creators. This just isn’t right.
In the scheme of things, our successful (highly-pirated) little indie film is a mere drop in the piracy bucket–we are one among thousands. However, collectively, this tainted revenue is significant, as is the harm done to those whose work is being stolen with the mere click of a mouse.
Certainly companies with the technological capacity (and robust balance sheets) of Google can afford to turn some attention to this issue. If these companies can offer ad placement based on cached cookies and metadata, why can’t they vet the websites where their ads appear? It ain’t rocket science folks. I daresay that if these websites were offering porn and not pirated films, these ads would NOT be popping-up, at least not for long.
Now, four years later, has anything really changed when it comes to ad sponsored piracy? As today’s study results make clear, the answer seems to be “not really.”
The Digital Citizens Alliance report also makes this important point:
The research does not represent the losses incurred by the victims of content theft – writers, producers, musicians, actors, and the thousands of others who work in creative industries. Content thieves are responsible for illicitly distributing millions of copies of valuable works, costing their owners billions of dollars in rightful revenues. The fact that the value of the content they illegally distribute is far greater than the advertising profits they reap is of no concern to the thieves, because they pay nothing for the content that drives their business.
Perhaps this study will serve as the tipping point that will motivate advertisers (and ad networks) assert more control over where their ads appear and into whose pockets their money goes. At least one can hope, but given the industry’s tendency to provide lip-service rather than real action to sever ties with online pirate sites, I remain skeptical. After all, if the fact that ads for popular brands are prominently displayed alongside piracy site sex ads won’t move them into action, I’m not sure what will.
Dove’s “self-esteem” ad
Kraft
Aveeno
Duracell
Best Foods ad
Natural Choice
Windows
Bounty
Vicks
Luvs Diapers
Duracell Batteries
Crest Pro Health
Swiffer
Best Buy
Febreze
Greenies
Alaska Airlines
L.L. Bean
Nokia
Motorola (a Google Company)
General Electric
Microsoft Windows Phone
Castro Motor Oil
Target
Hot Pockets
* Full disclosure, I am a member of the Digital Citizens Alliance Advisory Board .
by Ellen Seidler | Copyright, Piracy, Politics, Tech
Today my Twitter feed was filled with Tweets cheering Google’s new “doodle,” a rainbow flag festooned with various icons of athletes in action. Below it was a quote from the Olympic Charter:
“The practice of sport is a human right. Every individual must have the possibility of practicing sport, without discrimination of any kind and in the Olympic spirit, which requires mutual understanding with a spirit of friendship, solidarity and fair play.” –Olympic Charter
Sadly, while I am all for athletes and rainbow flags–and focusing attention on the fact that Russia is hosting the Olympics despite enacting abhorrent anti-gay legislation –Google makes me gag.
It’s not the message, but the messenger–a hypocrite to its very corporate core. If Google as a company truly believed in “human rights” why does it continue to disregard the rights of artists at every turn? Perhaps those who doodle for Google might want to review the United Nation’s Universal Declaration of Human Rights (Article 27, paragraph 2) which includes this passage:
(2) Everyone has the right to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author.
Why is Google so keen on “fair play” and the rights of athletes to compete, but when it comes to artists, not so much?
Since we’re asking the question, perhaps we should also ask why Google doodles about non-discrimination at the Olympics but donates millions to ALEC, an organization actively working to deny Americans their right to vote?
For the record, recently discovered documents also reveal ALEC’s troubling anti-gay history, not surprising for a group known for its right-wing positions and affiliations.
For Google the Olympics controversy provides the company with yet another opportunity to leverage its (global) influence to gain positive reviews, this time by hijacking of the Olympic spirit.
The persecution of LGBT people in Russia is an outrage that deserves every bit of attention it’s received–but given the context and the company, today’s rainbow doodle comes off as a cynical public relations ploy by a company posturing to obscure a truly malevolent soul.
by Ellen Seidler | Ad Sponsored Piracy, Copyright, Film, Piracy
Kim Dotcom has jumped the shark, Napster is long dead and Pirate Bay moves its domain nearly every other day, yet some things never seem to change when it comes to the world of online piracy— the dysfunctional and thorny thicket that is the DMCA and the enduring role of big brand’s in ad-sponsored piracy for profit.
Everyone who knows anything about online piracy understands that the DMCA takedown process and “safe harbor” provisions that shield pirate entrepreneurs from liability should have been tossed in the trash long ago. Signed into law in 1996, the Digital Millennium Copyright Act created a legal framework for managing (digital) copyright in an era of new technology and a burgeoning internet. Now, nearly 20 years later, the legislation is well past its sell-by date. Rather than provide clarity on digital rights and discourage copyright abuse, the DMCA seems only to have emboldened online profiteers who build businesses with piracy at their core.
Take a look at this “new” website GayFlix hosted by weebly.com, a do-it-yourself web hosting portal. The site welcomes visitors with this greeting, ” Welcome to GayFlix. The greatest source online for gay related movies and series that you can watch for free. ”
Not only does it offer up “free” LGBT movies, but it actually solicits submissions to complete its list of missing movies, asking users to send links via a convenient online form. No mention is made of requiring that links be from legit sources. No, this is not a joke…
Welcome to GayFlix. The greatest source online for gay related movies and series that you can watch for free. We only provide embed codes for links of 3rd party websites. This means that you can find videos on our site and watch them here for free, but we do not allow video hosting or video uploading of any kind. All videos are screened by our moderators, we filter through videos to remove content that is not related to the GayFlix ideal, such as porn or genres that do not include GLBTA material. We also allow filmmakers to submit links to their work for us to post on our site for others to enjoy. We allow our members to send us links to GLBTA movies and series, you can do this on the submission page. All content will be screened fully before posting so please allow us 24 – 72 hours to post approved material, all unapproved material will be discarded and an email to its submitter will be send on why we have chose not to approve the material as well as a copy of our policy to remind them what is appropriate material, if a member feels that there was a misunderstanding in the screening process they are welcome to contact an administrator for further assistance and information.
Some of the movies “shared” on the site are embedded via HULU, a legit source but many others are pirated copies including Elena Undone, Kyss Mig, Joe + Belle, Inescapable, August, A Portrait of James Dean-Joshua Tree 1951 and A Perfect Ending , among others. The pirated streams are all hosted via slimy cyber-lockers shown in the graphic below.
Note the disclaimer beneath the pirated stream that, “All videos belong to 3rd party websites. GayFlix does not allow hosting. GayFlix has no control over advertisements on videos.” Say what? So what? First of all the videos don’t “belong” to 3rd-party websites–they belong to their creators–-and, while the site doesn’t “allow” video hosting. it has no problem embedding illegal copies from other sites? What kind of twisted logic, blatant lack of accountability applies here? Oh yeah, the DMCA…but wait, even the DMCA has directs that a website operator not “have the requisite level of knowledge that the material is infringing.” Sorry, but you can’t tell me that these folks who claim to “vet” their content don’t have a clue that many of movies they “share” are pirated?
Thanks to the safe harbor provisions of the DMCA, this apparently seems a perfectly respectable (and legal) thing to do? As Wikipedia notes, “The DMCA’s principal innovation in the field of copyright is the exemption from direct and indirect liability of internet service providers and other intermediaries.”
GayFlix does display a DMCA contact button at the bottom of the page but in reality the DMCA takedown process is another escape hatch for a poor, ignorant site operator who doesn’t realize (wink, wink) that he’s sharing infringing content. When a site like this does get a DMCA takedown notice and removes the infringing content, that’s it–no questions asked. It’s also worth noting that just because a site lists a DMCA contact, in many cases any takedown request that’s sent is routinely ignored.*
This website doesn’t appear to make money off ads, but it does offer up a shopping page (called the Rainbow Shop) that sells a variety of LGBT-themed t-shirts and trinkets. More traffic potentially means more sales.
If the GayFlix operators want to “share” LGBT films, too bad didn’t just become an affiliate of Wolfe on Demand, the largest (legal) distributor of LGBT films in the world. Had they done so operators could have legally embedded dozens of great LGBT movies on their site and earn commission every time a visitor rented or downloaded a film. Added bonus, the filmmakers actually get paid too!
Moving on, more thorns can be found by examining the illegal embeds’ source. The pirated copy of “A Perfect Ending” streams from the website played.to. If one clicks the arrow at the center of the screen, advertising appears. The ads promote a number of mainstream brands including AT&T, Netflix, HULU, Mike’s Bikes, Google Shopping, Norton and so on….
By inspecting the source code for the illegal movie stream, one can easily determine that the ad providers is a company named Integral Marketing.
The company isn’t exactly transparent. WHOIS search results seem to indicate it may be based in Tel Aviv, but who really knows. When offering services in the smarmy world of advertising on pirates sites, I guess it’s best to maintain a low profile. The company’s “about us” page describes its services this way:
Integral Marketing is a digital marketing company that uses unique advanced targeting technology and display advertising to provide optimal value to brands online. Our goal is to ensure quality traffic, service, and to help save you the time necessary to search and locate effective websites to advertise on. Our understanding in customer service, technology, sales, and account management enables us to deliver and meet the advertising results you require. [emphasis added] Over 600 million unique monthly online users with the capacity to display over 3.65 billion ad views/month. With our growing team and constant efforts to advance, continues to gain market intelligence and deliver reliable and accurate advertisements in order to meet the unique marketing needs of every client.
The site also claims to “ensure we cater to our advertisers’ campaign goals.” Hmmm, I wonder it’s the goal of AT&T, Netflix, HULU, Norton, Google and Mike’s Bikes (among others) to have their products associated with pirated movies online?
By the way there’s nothing in the DMCA that makes this sort of black-market profiting illegal. It’s A-Okay for brands to advertise their products on pirate websites and put money in the pockets of thieves. In fact, according to this ad provider, it’s just part “cost effective” part of doing business in today’s world.
Last week Jack Marshall wrote a piece, “Why Does Tech Advertise on Piracy Sites?” The question is really a broader one, “Why do companies that care about their brand continue to advertise on pirate websites?” It’s a question I asked in 2010 when I first began writing about the link between ad revenue and online piracy on my blog at popuppirates.com. As Marshall notes in his piece,
The question is: Do those companies’ ads show up on that type of site because they can’t stop them? Or do they simply ignore the fact because they’re a great source of cheap, effective media? Either way, it’s not a great look. If they are unable to stop the ads, that doesn’t give advertisers much comfort. And if they don’t care, well, publishers are a bit less cavalier when it comes down to misappropriation of intellectual property.
Over and over major brands and their ad industry representatives have been asked this question and the response has always been to feign concern while deflecting responsibility. Last September, at the annual “Advertising Week” convention in New York City the question came up in a panel on “Digital Media Under Attack-It’s Worse Than You Thought.” Privacy-net’s Gordon Platt reported on the event:
Much of the conversation focused on the relationship between advertising and piracy, not unexpected for an Advertising Week event. “No one has asked the blunt question of whether you want your ad associated with a pirate site,” said [Rick] Cotton. He added, “Advertisers should not want their ads to be in that environment. It’s getting more risky to be in business with criminal websites.”
Bob Liodice, CEO of ANA (Association of National Advertisers) agreed and suggested the industry needs to be accountable for its role in monetizing piracy.
“It makes us all shake our heads, wondering how we can wrap our arms around this. We have theft going on here.” Liodice believes that one problem is that no one has taken “ownership” of the piracy problem. “We have to create a level of collaboration in order for the [advertising] industry to own the issue.” Liodice stressed that collaboration has to be “systematized” and that the industry has to make it “personal.”
During the Advertising Week event NBCUniversal’s Senior Counselor for IP Protection, Rick Cotton suggested, “The simple message is that we need a systematic approach to this problem. Otherwise it’s bad news for the industry.”
Despite hollow assurances that something will be done, nothing seems to change as advertising intermediaries continue to be the engine that drives piracy. At this point all we can do is continue to call them out on their hypocrisy and reveal how their coveted brands risk being tainted by the link to online piracy profiteering.
Where does this leave the content creators who livelihoods continue to be stolen? It leaves us stuck in a swamp of ill-conceived laws, industry apathy, and empty political rhetoric.
*For the record the distributor sent DMCA takedown requests to the email provided on the site for multiple titles, but 24 hours later, the infringing movies remain embedded on the site.
**Update as of 1/29 Weebly.com (the host site) removed the GayFlix content from the web.
Credits: stock image Depositphotos
by Ellen Seidler | Copyright, Law, Piracy, Politics, Tech
Creativity ‘Continues to Thrive,’ in spite of SOPA’s defeat, not because of it
In a post marking the anniversary of SOPA’s defeat (Stop Online Piracy Act) Google asks users share a graphic to celebrate. “Since we combined our voices to stop SOPA, creativity has continued to thrive — both on and off the web.” Their celebratory note also includes this caveat:
Of course, piracy remains a major concern and Google does its part to fight it, but, two years after SOPA, it’s clear that the Internet has been really good for creativity and entertainment.
Frankly, I’ve never heard artists or entertainers make the argument that the internet isn’t “good” for creativity or entertainment. Yet, during the SOPA debate, as red herrings flew, content creators became the enemy in and us vs. them debate as hyperbolic and often mendacious rhetoric echoed across the web.
SOPA anniversary aside, this week marked another milestone– 100 Million takedown requests to remove search links to pirated music have been sent to Google. Note this total only includes takedown notices sent by the music industry. Don’t forget to add those millions sent to Google for pirated movies, photographs, books, and more.
If piracy is really a “major concern” for Google why do illegal sites still dominate in searches for music and movies? Here’s a graphic that is a tad more “balanced” than the one Google wants you to share.
Below is another graphic that worth considering when reading about Google’s rather disingenuous statements about their concerns re: online piracy. Yes, creativity continues to thrive online, but just image what could happen if Google actually took serious steps to stop supporting online piracy? It would be nice to see the trend lines in the chart below going down rather than steadily climb.
by Ellen Seidler | Copyright, Piracy, Tech
Google’s foot dragging in fight against online piracy is in spotlight again.
In a piece published today in The Hill, “Google’s 100 Million Notices,” the RIAA’s Chairman and CEO Cary Sherman asks (again) why the Silicon Valley behemoth isn’t doing more to fight online piracy and police pirate links in search results:
In fact, when a user searches for virtually any prominent artist and song and “mp3,” the first result served up by Google’s own auto-complete function is usually mp3skull.com — a site that’s received more than two million music piracy notices and is among the top offenders on Google’s own public listing of sites receiving the most piracy notices. More broadly, rogue sites we analyzed managed to appear on page 1 of search results over 98% of the time in the searches we conducted.
What’s even more frustrating is that a significant portion of our piracy notices are repeat notices for the same song found on the same illicit site. So the enforcement system we operate under requires us to send a staggering number of piracy notices – 100 million and counting to Google alone—and an equally staggering number of takedowns Google must process. And yet pirated copies continue to proliferate and users are bombarded with search results to illegal sources over legal sources for the music they love.
It’s a question many of us have been asking Google for very a long time. Sherman offers up “five point plan” that Google could (and should) easily implement to mitigate its role as a gateway to illegal downloads online:
Our five-point plan is simple, straightforward and readily achievable by Google and others in search:
- fulfill the admirable promise to demote sites receiving extensive numbers of piracy notices
- make sure that the “take down” of a song is meaningful – not repopulated online two seconds later
- educate users by identifying authorized sites with a consumer-friendly “icon”
- stop leading users to illegal sites through autocomplete
- give your repeat offender policies some teeth
In reality Google’s so-called updates to its search algorithms (announced in August of 2012) have been (unsurprisingly) more “bark” than “bite.”
Take a look at the results I got today when I did a quick Google search for indie film “Kyss Mig” using the terms word “download” and the movie’s title. The first page of results chock full of illegal links and torrents on notorious pirate sites like Pirate Bay and Primewire.ag.
When it comes to piracy Google search functions a lot like Google maps–but instead of helping folks find the closest gas station it leads them straight to pirated movies, music and more. There’s really no excuse…
by Ellen Seidler | Ad Sponsored Piracy, Copyright, Piracy, Politics
Once a thief, always a thief
Last night 60 Minutes ran a segment featuring a Bob Simon interview with the now-defunct Megaupload’s Kim Dotcom. Much has already been written, and debated, about the German pirate entrepreneur who currently resides in New Zealand as he fights extradition to the United States on charges of copyright infringement. So did we learn anything new from last night’s broadcast that billed Kim Dotcom (predictably) as “Hollywood’s Villain?”….the short answer–nope.
Per usual, explanations were limited as to how Megaupload operated (and launched a business model that many others would follow), Mr. Simon explained it this way:
Here’s how it worked. If you wanted to send a friend a file that was too large to email– a wedding video, for example– you could just upload it onto Mega Upload’s servers and your friends could click a link to download it. It was a virtual warehouse where people stored and shared digital files. By selling advertisements and premium subscriptions, Mega Upload brought in an estimated $175 million. It became one of the most frequented sites on the internet. How did it get so popular and profitable? According to federal authorities, by also allowing users to illegally share the hottest new movies, or hit songs, or TV programs, including some CBS shows.
Unfortunately Simon failed to explain probably the most important factor to Megaupload’s financial success, its affiliate program. What good is hosting tons of pirated content if no one know where to find it? If there’s a genius to Dotcom’s acumen as a black market businessman, this is it. Basically the cyberlocker (cloud-based storage) site’s business model was that of multi-level marketing style pyramid scheme. Instead of selling cosmetics or cleaning products, his company “sold” access to stolen movies, songs and e-books.
As with all pyramid-style companies, Megaupload depended on attracting armies of underlings to “sell” its offerings. It did so by offering incentives to users who signed up to become “affiliates.” Upload stolen content, spread the download links far and wide like a virus, and the more downloads you attracted, the more cash you would earn. Affiliates could also earn cash for recruiting more affiliates. This army of mini-pirates was the key to Dotcom’s success and fueled piracy’s rampant growth beyond the traditional, more cumbersome torrent sites like Pirate Bay. The internet was suddenly filled with forums where users “shared” their download links over and over and over again.
Those who clicked on a Megaupload download link would find that they could generally stream or download a favorite film, or song, with a mere click of the mouse. For those who wanted faster download speeds they could subscribe to “premium” services and by doing so dump more cash into Dotcom’s coffers.
By having others do their dirty work uploading stolen content, Megaupload attempted to skirt copyright law by claiming refuge under the “safe harbor” provisions of the DMCA (Digital Millennium Copyright Act). Dotcom reiterated this excuse in his interview with 60 Minutes:
Am I the one who is at fault if users upload that kind of stuff and up… re-upload it again? Do I have to go to jail for that? Because I didn’t do it. I didn’t upload these things to Mega Upload.
Dotcom also blamed his flamboyant lifestyle and his nationality as reasons for his targeting by U.S. officials not the 2 and a half billion his company was worth at its peak when he left Hong Kong for New Zealand—a valuation built by pirating the hard work of others—musicians, filmmakers, authors and more. Too bad the folks at 60 Minutes didn’t think it worth interviewing any of those (beyond Hollywood) whose livelihoods suffered thanks to Megaupload and sites like it.
At this point, whatever happens with Dotcom is pretty much irrelevant. The key truth is that with the demise of Megaupload the entire piracy for profit industry was finally put in the spotlight. Why did so many other cyberlocker sites immediately shut down after the Megaupload indictment? If Filesonic, Wupload, Fileserve and other sites’ business models were legit, why did their operators scurry like cockroaches exposed to bright lights. The answer is simple. They, like Megaupload before them, were engaged in (illegal) theft for profit.
The shuttering of Megaupload marked an important shift for the landscape of online piracy. Just as cyberlockers’ illegal business models were being called into question, legitimate online options were gaining steam. The sudden vacuum allowed legal alternatives like Netflix, Hulu and their ilk to gain traction. Consumers who’d sought out pirated content out of convenience suddenly found that using their Roku or Apple TV box was a better option than scouring the internet for torrents or Russian streaming sites.
I for one don’t care much about what the future holds for Mr. Dotcom. I’m sure he’ll figure out another way to game the system and make money at the expense of others, but in the meantime I’ll be happy that content creators were the victors this time ’round.
P.S. for more analysis on the case against Kim Dotcom and copyright law I suggest Robert Parloff’s excellent piece published in Fortune Magazine in 2012: Megaupload and the twilight of copyright
