by Ellen Seidler | Copyright, Film, Law, Piracy, Tech
According to a study released yesterday by researchers at Carnegie Mellon University, last year’s shutdown of the notorious pirate file-sharing hub Megaupload, had a positive impact on movie revenues. Citing the increase in sales following the popular cyberlocker’s demise, the researchers (Brett Danaher and Michael Smith) note:
…immediately following the shutdown, there was a positive and statistically significant relationship between a country’s sales growth and it’s pre-shutdown Megaupload penetration, such that for each additional 1% (lost) penetration of Megaupload the post-shutdown sales increase was between 2.5% and 3.8% higher (depending on which of our models you believe to be most accurate).
The fact that these trends didn’t exist before the shutdown but existed after the shutdown suggests a causal effect of the shutdown on digital sales, and we find a similar (but slightly weaker) relationship for digital rentals. In aggregate, our estimates suggest that, across the 12 countries in our study, revenues from digital sales and rentals for the two studios were 6-10% higher than they would have been if Megaupload hadn’t been shutdown.
Given the size of Megaupload’s illicit traffic (ranked #63 worldwide in 2011), these results are not particularly surprising. However, in terms of its overall impact on piracy, it’s important to note that the seizure of Megaupload had a ripple effect across the entire cyberlocker landscape. Shortly after Dotcom’s arrest, other major players in the piracy’s profit pyramid, also bit the dust. These included Filesonic, and Wupload. Others, such as Fileserve, shifted their business models away from a rewards system that paid cash for downloads. Clearly the site operators, who grew wealthy through a cyberlocker business model that had thrived for so long in a lawless environment, were suddenly running scared. Their black market had been discovered and many jumped ship rather than face potential jail time.
Now, more than a year later, a cornucopia of new cyberlocker sites has emerged to take their place. So far, these sites–many based in Eastern Europe far from the reaches of U.S. authorities–have failed to achieve the size and scope of the defunct giants.
Another significant factor working in favor of content creators is that Megaupload’s takedown created a brief vacuum that gave legitimate streaming portals a respite, providing them with a much-needed opportunity to elbow their way into the global marketplace and establish a loyal costumer base.
After all, it’s always much easier to set up a successful shop if you don’t have another store down the block giving away the same products for free.
by Ellen Seidler | Copyright, Film, Law, Piracy
If you can’t beat ’em, join ’em. Some cyberlocker websites that offer file storage, do (eventually) respond to DMCA takedown notices, but in an ironic final twist, a fair number of them have found a way to use copyright violation notifications to their advantage–monetizing requests via pop-up ads.
Examples are easy to find. Today I went to a notorious download site that offers download/streaming links to any number of popular (recent) films. I chose to find links for the Oscar-nominated “Silver Linings Playbook.” If you look at the column on the left, you’ll see more than 2 dozen links to view and/or download the film. I did not check them all, and imagine some have already been removed by studio anti-piracy efforts.
For purposes of this piece, I chose a link hosted on a site called “Faststream.in” When I clicked the link I arrived at a splash page that offered a stream of the film. I could click the button “proceed to video” be bombarded with ads before watching the film. However, what happens when the rights holder wants to send a DMCA notice to the site? On this site there’s no DMCA option provided, only a “contact” link. Click that and (cha-ching) a pop-up ad appears. To access the actual contact page, you have to close the ad.
I’ve come across many sites that utilize the same setup. I suppose that if a site is going to lose its carrot to attract ad clicks, operators may as well make some money in the process. Aside from earning cash from clicks, this cumbersome procedure also makes sending a legit DMCA notice a time-consuming, and thus expensive, proposition. I checked the U.S. Copyright Office list of designated agents to determine if this site had registered one. No listing was found, so using this contact page–for each and every takedown request– appears to be the only way to contact the site to send a takedown notice. No wonder the movie is still online.
I checked the WHOIS information to see if their was any contact information and found that the domain was registered by a Jeremiah Haselberg of PiratePoint.Ltd. in Canada. At least he’s honest about the nature of his entrepreneurial activities eh? Or maybe he’s just named his company after a favored vacation spot, Pirates Point Resort in the Caymen Islands….a “safe harbor” in more ways than one.
Aside from making money off DMCA takedown requests, this site is follows the traditional cyberlocker pirate business model, incentivizing infringing uploads with cash rewards.
It’s bad enough that rights holders have to police these sites to safeguard their work, but adding to their coffers in the process only adds insult to injury. Such is the nature of online piracy today.
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.
According to a study released yesterday by researchers at Carnegie Mellon University, last year’s shutdown of the notorious pirate file-sharing hub Megaupload, had a positive impact on movie revenues. Citing the increase in sales following the popular cyberlocker’s demise, the researchers (Brett Danaher and Michael Smith) note:
