Torrent Freak: US BitTorrent Traffic Grows 40% from 2011 (Sandvine)

The latest Sandvine report states that “In absolute traffic level, BitTorrent has risen in volume by over 40%”.  To clarify, in Q3 and Q4 of 2012, the amount of data used for peer-to-peer “filesharing” in the United States has grown by 40% above the volume in the same period last year.  Pro-piracy pundits will say “not all of the increase is illegitimate.”  Here is the top 25 movies being distributed right now on BitTorrent.  Not a single one is legal.  Indeed in 2011, Envisional found that none of the top 10,000 torrents were legal.

 

On the music side, pro-piracy advocates are working hard to feature artists who don’t mind if their recordings are distributed for free.  If you search the top torrents by distributors (seeders) you see that most of the top 10 on that list are “legal.”  However, if you search the top 25 by consumption (leechers), they are all illegal.

 

 

Cisco stated that North America used an average of 9,947 Petabytes (1 million Gigabytes) a month in 2011.  Sandvine says that overall volume has increased 120% in 2012 over 2011.  If we assume that means that in 2012, North America used an average of 21,883 Petabytes (1 million Gigabytes) a month and we assume that one movie is 1 GB, that is 31 Billion movies if it was all movies.  Its not all movies.  It is software like Microsoft Word and Rosetta Stone.  It is everything ever recorded by any artist you can name.  It is every video game . . . and every book . . . and every TV show.  Free.

Pro-piracy advocates say that we just need to accept piracy and that artists need to get a new business model.  This is false.  The $400B US telecom industry needs to follow the law.  The Sandvine report goes on to state that 42% of all US upstream traffic is used for peer-to-peer “filesharing.”  Why is 42% of all US upstream traffic is used for peer-to-peer “filesharing?” US law says that ISPs only have safe harbor from their liability due to their subscribers illegally distributing content if they have a policy for terminating repeat infringers (17 USC 512 (i).  If US ISPs had a policy for terminating repeat infringers, 42% of all US upstream internet traffic would not be used to illegall distribute music, movies, games, software and ebooks.

For some reason, the report tries to make the case that because BitTorrent is 12% of overall US traffic, down from 15% in 2011, that piracy is decreasing.  We are confused as to why Sandvine would present that facts that way.  The internet is an unusual phenomenon that grows exponentially.  The fact that Netflix grew a lot and consumes a lot of bandwidth is irrelevant to all of the additional losses faced by content owners in 2012 due to BitTorrent.

Calling All Lawyers! uTorrent Increases “Privacy” and Counters Mass-Monitoring of Downloads

BitTorrent, Inc. may have finally made the mistake that content creators and owners around the world have been waiting for.  Content owners have been able to successfully sue and recover hundreds of millions of dollars from Napster, Grokster, Bearshare and Limewire, but until recently have been unable to sue BitTorrent, Inc for its role in assisting hundreds of millions of people to illegally consume billions of media products.  Many people are amazed to learn that BitTorrent, Inc., the technology we believe is primarily responsible for the decline of recorded music, home video and video game revenues, has received more than $40m in venture capital investment from Silicon Valley’s Accel Partners.  The legal loophole that allows BitTorrent to exist is the famous “betamax” case, where the court ruled that as long as the VCR (Video Cassette Recorder) had one legitimate non-copyright infringing use, it was a legal technology.

The VCR however, did not restrict its features after years in the marketplace to make it easier for people to commit infringement without getting caught.  In our opinion, that is what BitTorrent, Inc. announced today.  In our opinion, they are restricting the existing long-standing features of their product for the the sole purpose of making it easier for people to use their software to distribute copyrighted content without getting caught and prosecuted.

TorrentFreak reported that “To protect the privacy of its users BitTorrent Inc. therefore decided to randomize the peer-id uTorrent users display to other peers.”  Among other things, the peer-id tells other computers using BitTorrent what software brand and version the other computer is using.  This information improves the performance of the file transfer by enabling peers to use all of the latest features available when communicating with another computer.  TorrentFreak writes, “Thanks to the new feature it is no longer possible to track BitTorrent users based on their peer-id for a longer period of time.”  BitTorrent’s own words are “Feature: don’t use a consistent peer-id (to mitigate tracking)”

In describing the peer-id, BitTorrent says:

“The 20-byte peer id field sent [has] been used not only to identify peers but also to identify the client implementation and version.

A number of clients begin the peer id with a dash followed by two characters to identify the client implementation . . .The remaining bytes are random. An example is -AZ2060-” This means the software brand is Azureus and the version is 2.060.

What is Accel Partners’ motivation to invest in BitTorrent, a technology that is devastating the media industry and has no sustainable legal business model?  As advertisers are beginning to be held accountable for their role in sponsoring piracy, how does BitTorrent make money?  In 2007, Accel invested $47m in Admob which they sold to Google for $750m in Google stock in 2009.  BitTorrent is the largest peer-to-peer platform and according to Sandvine, 30% of European and Asian internet traffic is peer-to-peer filesharing in 2012 and 15% of US traffic.  According to Envisional, 100% of the top 10,000 torrents infringed on copyright in 2011.  What percentage of Google’s ads are served on pages that refer people to get files from the 30% of all European and Asian and 15% of all US traffic used for infringement?  As long as BitTorrent provides a reason for people to search for illegal content that they find on sites that have ads from Google’s ad networks, Accel’s investment in Google stock keeps going up.  When Accel sold Admob for Google stock it was $572 a share.  It is $733 today.  Neither Google, Accel Partners nor BitTorrent needed to pay any of those pesky content creators!

Why does BitTorrent, a company backed by a large shareholder in Google need to reduce the functionality of its software in order to help people hide from law enforcement?  Why do its users need to hide?  Because in our opinion, both BitTorrent and Accel Partners are well aware that their technology is primarily used by people to break the law.  Prior to BitTorrent restricting features to help users hide from law enforcement, the Betamax decision was the thin legal thread they hung onto.  It is our opinion that now that they go out of their way to restrict their long-standing features to empower their users to hide from legitimate and legal law enforcement monitoring, that they have crossed the line and opened themselves up to liability.

Watch Pirate Movies and Play Games On Your TV for $99

Ouya, a game console startup recently raised $4m on Kickstarter.  The product design has three selling points; a) it will cost $99, b) it will enable you to run android apps on a television, and c) it is 100% hackable.  According to the blog Kotaku, one of the consequences of these features is that you will be able to watch free streaming live sports events on your television.  You will also be able to stream movies via BitTorrent.  As it gets easier and easier to steal content with no meaningful deterents, revenues in multiple industries are cratering.  The number of cable subscribers on Comcast (CMCSA) has dropped 7% from 24.1 million in 2007 to 22.3 million in 2011 (source: Comcast Annual Reports).  That was in the old days when you actually had to know some techie stuff to connect your PC to your TV or burn a DVD to watch pirated movies.  With Ouya, you will just connect your Android phone or tablet running BitTorrent to your TV and you will never have to pay a content creator again.  If this drop in revenues was occurring due to innovation that was creating value in the marketplace, we would applaud that, but it is not.  What happened in the marketplace between 2006 and 2011?  The volume of illegal movie downloads in the US grew by a factor of eight.  Unless something changes, these new piracy technologies will just continue to fuel the collapse of the creative industries.

Between 2007 and 2011 the amount of traffic used for P2P BitTorrent “filesharing” in North America grew from approximately 3000 petabytes to more than 13,000 Petabytes in 2011.  In our opinion, the reduction in paying cable subscribers is directly correlated to the increased volume in media being consumed illegally.  In the same period of time, revenues from Home Video, which includes BluRay, iTunes, Netflix, Amazon, Hulu and all legal streaming services dropped 26% from $26B to $18B.

The mantra from the anti-copyright pundits is; a) there is no need for law enforcement, iTunes proves people will pay for content even when its available for free, and b) piracy is about lack of compelling options, if compelling options are provided, people will pay.  Between Xfinity, Hulu, Amazon, iTunes, HBO Go and Netflix, the offering in 2012 is pretty compelling, so why are Home Video revenues cratering?  Because no industry can compete long-term with their equivalent product available instantly for free.

First, while digital music sales on iTunes have grown from zero to $6B worldwide in 2011, it is still a tragically reduced industry compared to what it was and what would be possible if there were some measures in place to mitigate illegal free distribution.  The facts are that in the US in 2011, total digital music sales were $2.6B and subscriptions (Spotify, et. al) were $241m. This industry as recently as 2000, generated $12B in the US and $27B worldwide. Did music become less popular?  No, music consumption soared to 132 billion mp3s downloaded illegally in the US in 2011.  The great majority of music consumers do not pay.  People don’t pay because nothing happens when they take the product illegally.

If we are judging the future of digital media by iTunes, then its “hasta la vista” baby to movie, television and sports revenue when everyone can have a “game console” for $99 that makes watching pirate media on your television incredibly easy.

The bottom line is that the law in the United States says that the ISPs only have safe harbor from their third-party liability if they are terminating repeat infringers.  If ISPs were following the law, 18.8% of all US internet traffic would not be used to illegally distribute music, movies, software, games and books for free.  If ISPs were following the law, there would be some consequences when a customer buys the $99 Ouya and then downloads every game, TV show and movie on it for free.  Today, there are no consequences.  That is why wages to musicians and musical groups are down 45% since Napster appeared.  The same thing is coming for all other media industries.

How many of America’s 8.2% unemployed were people who worked in recording studios, wrote songs, played bass, wrote screenplays, worked at a software company (Adobe laid off 750 people in 2011, 3 million Photoshop downloads on BitTorrent to date), designed video games (revenues down 25% from 2010 to 2011) or worked behind a camera?  Enjoy unlimited free movies, games and TV on your Ouya while you put thousands of Americans out of work!

Google Will Censor Legal Firearms – Not Illegal Content

This is a short post, because it only takes a few sentences to make this point.  Google Shopping sent an email to merchants updating its new policy of censoring Google Shopping results.  When you read this realize that in our opinion, Google is the primary tool that people all over the world use to find links to acquire illegal content.  The latest fun Google search to try is “21 Jump Street Free” and see all of the links on Google to watch this first run movie illegally for free.

Their email to merchants states that they will censor shopping items that do not confirm to their “values.”  They have the audacity to put the following in print, “Our company has a strong culture and values, and we’ve chosen not to allow ads that promote products and services that are incompatible with these values.”  Yet, they will block out their logo on the #1 web page on the internet to advocate for their “rights” to display billions of links to help people access illegal content.  The access that Google provides to free content hurts real people.  According to the Bureau of Labor Statistics, “Musical groups and artists” income plummeted by 45.3 percent between August 2002 and August of 2011.  Google’s “values” don’t seem to include helping tens of thousands of songwriters, musicians, authors, screenwriters, cinematographers, photographers, software developers and game designers who have lost jobs or are underemployed due to billions of units of lost sales resulting from links to their products available illegally free on Google.  Here is their email:

Dear Merchant,

We’re writing to let you know about some upcoming changes to the product listings you submit to Google. As we recently announced, we are starting to transition our shopping experience to a commercial model that builds on Product Listing Ads. This new shopping experience is called Google Shopping. As part of this transition, we’ll begin to enforce a set of new policies for Google Shopping in the coming weeks. A new list of the allowed, restricted, and prohibited products on Google Shopping is available on our new policy page – http://www.google.com/appserve/mkt/ApI7UWRj6OCZpd.

Based on a review of the products you’re currently submitting, it appears that some of the content in your Merchant Center account, HamLund Tactical, will be affected by these policy changes. In particular we found that your products may violate the following policies:

Weapons

When we make this change, Google will disapprove all of the products identified as being in violation of policies. We ask that you make any necessary changes to your feeds and/or site to comply, so that your products can continue to appear on Google Shopping.

To help you through this new set of policies and how to comply with them, we would like to give you some specific suggestions regarding the changes needed to keep your offers running on Google Shopping.

Weapons

As highlighted on our new policy page http://www.google.com/appserve/mkt/ApI7UWRj6OCZpd, in order to comply with the Google Shopping policies you need to comply first with the AdWords policies http://www.google.com/appserve/mkt/StQ08jAzM4fVtG.We do not allow the promotion or sale of weapons and any related products such as ammunitions or accessory kits on Google Shopping. In order to comply with our new policies, please remove any weapon-related products from your data feed and then re-submit your feed in the Merchant Center. For more information on this policy please visit http://www.google.com/appserve/mkt/GbBNIGHOribLzf.

We’re constantly reviewing our policies, and updating them when necessary, to ensure we’re offering the best experience possible to our users. We’ve identified a set of policy principles to govern our policy efforts on Google Shopping in the U.S. These principles are:

1) Google Shopping should provide a positive experience to users. Showing users the right products at the right time can truly enhance a user’s experience. When people trust us to deliver them to a destination that’s relevant, original, and easy to navigate this creates a positive online experience to the benefit of both users and merchants.

2 ) Google Shopping should be safe for all users. User safety is everyone’s business, and we can’t do business with those who don’t agree. Scams, phishing, viruses, and other malicious activities on the Internet damage the value of the Internet for everyone. Trying to get around policies or “game the system” is unfair to our users, and we can’t allow that.

3) Google Shopping should comply with local laws and regulations. Many products and services are regulated by law, which can vary from country to country. All advertising, as well as the products and services being advertised, must clearly comply with all applicable laws and regulations. For the most part, our policies aren’t designed to describe every law in every country. All advertisers bear their own responsibility for understanding the laws applicable to their business. Our policies are often more restrictive than the law, because we need to be sure we can offer services that are legal and safe for all users.

4) Google Shopping should be compatible with Google’s brand decisions. Google Shopping must be compatible with company brand decisions. Our company has a strong culture and values, and we’ve chosen not to allow ads that promote products and services that are incompatible with these values. In addition, like all companies, Google sometimes makes decisions based on technical limitations, resource constraints, or requirements from our business partners. Our policies reflect these realities.

We’ve given much thought to our stance on this content, as well as the potential effect our policy decision could have on our Merchants, and we apologize for any inconvenience this may cause you.

Sincerely,

The Google Shopping Team

Wozniak, Megaupload and Kim Dotcom

Here at Ethical Fan we have nothing but respect and admiration for Apple co-founder Steve Wozniak.  But we feel that his statements and photograph with Kim Dotcom really illustrate the blind spot that many skilled and ethical technologists have regarding the rights of creative people and the preventable harm that some internet technology is doing to them.

Steve’s full quote is here:

“How unfair that the United States will allow him living expenses out of his frozen assets but not give him any legal fees,” Wozniak said. “The side with access to the funds spends millions on lawyers hoping the other side goes bankrupt and gives in. Shame on the system that permits this one-sided advantage. Kim is well enough liked and respected that his legal team is working without up-front payment.”

“I scratch my head wondering why the studios went after the guy doing more than can be imagined to remove the links the studios wanted removed,” Wozniak noted in his email. “Heck, I use my iDisk (MobileMe) and dropbox to share files by sending links to friends. They might even be copyrighted materials. I might even send a song in an e-mail to my son, although if I think he’ll keep it I will use the ‘Buy gift’ feature in iTunes. But there are so many legitimate uses to peer-to-peer file sharing and cloud storage.”

In this post, we provide screen shots from August 17, 2011 when Megaupload was the 92nd most popular site on the web.

It is our opinion that these screen shots show that Megaupload was a criminal enterprise selling stolen content.  Who wouldn’t want justice if their property was being stolen and someone was making millions of dollars from their stolen property?  

These screen shots clearly show that Kim Dotcom’s Megaupload was selling streaming movies that it did not have the rights to sell.  That is criminal copyright infringement.  The great majority of Americans know that if you are selling bootleg DVD’s you could get arrested. That is why Kim Dotcom was extradited, he was selling “bootleg” streaming movies on a massive and unprecedented scale.

Steve says that Megaupload was responding to take down requests.  We are not sure that Steve understands that Megaupload was paying uploaders per stream from files they uploaded to Megaupload.  That is why there were so many links that Google autopopulated Megavideo after you entered Star Wars in the search field.

Then Google estimated that there were 4.3 million web pages that had the words “star wars megavideo” on them.  Legitimate file locker sites like Dropbox, don’t allow any public links to copyrighted content.  In fact Dropbox just banned Boxopus, a torrent tool from using its API.

Megavideo let you play the first 45 minutes of Star Wars and thousands of other movies for free (after they had served you and profited from dozens ads) . . .

 

But then, to watch past 45 minutes, you had to enter your credit card and pay $9.99 a month to keep watching.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Let us not forget Carpathia Hosting, the CDN that the FBI raided becuase they were getting paid for caching these illegal movies for Megaupload.  Here is data from a packet analysis we ran in July 2011.  86% of the first 45 minutes of the Star Wars stream captured above came from IP address 173.245.127.21, who ARIN says is assigned to Carpathia Hosting.

IP 173.245.127.21     Packets 39,908 Bytes 60,314,666 IP Assigned To: Carpathia Hosting, Inc. % of Total Packets 86.2%

Google was making money selling ads on landing pages to Megaupload links, Megaupload was making millions selling subscriptions to content they didn’t own without paying the owners, uploaders were getting paid for uploading content they didn’t own and Carpathia was getting paid to cache the content.  Who wasn’t being paid?  The people who actually made and own the movies.  That is why we have laws and law enforcement.


Comcast May Owe Content Owners $1.6B A Year Or More

Much of United States copyright law is a civil, not criminal in nature.  The ability of citizens and corporations to bring lawsuits in civil matters is good for society.  As an example, the removal of cancer-causing asbestos from many residential and office buildings in the United States was brought about by the use of civil lawsuits.  Building owners now use more expensive, but safer, materials to avoid lawsuits, benefitting society.  The same process was used to radically clean up America’s waterways.  Before many successful lawsuits against polluters, in the 1970s you could literally light many polluted lakes and streams on fire.  Corporations didn’t spend billions on treating water and disposing of chemicals out of altruism, they did it to avoid lawsuits.  Copyright laws allow authors, songwriters, singers, guitarists, software and game coders and publishers to be able to make a living, get investors, employ teams and maybe even make a fortune from their creative output.  The primary tool for copyright enforcement is and has always been the civil lawsuit.  Unfortunately, in our opinion, ISPs in the United States have a business model today where they get paid billions of dollars to provide internet service that now comes with unlimited illegal free movies, music, books, software and video games.  In the modern “open internet”, the ISP gets paid, but the content owner does not.  Now, rather than help content creators and owners in any meaningful way, it is our opinion that the largest US ISP is refusing to allow the nation’s copyright holders access to the only tool currently available to them to enforce copyright on peer-to-peer networks.

Attorneys for Comcast (CMCSAtold the court on June 1st, 2012 that:

“plaintiffs should not be allowed to profit from unfair litigation tactics whereby they use the offices of the Court as an inexpensive means to gain Doe defendants’ personal information and coerce “settlements” from them.”

In response, our opinion is that:

Comcast (CMCSA) should not be able to continue to profit from forcing content owners and creators to have their products distributed on their network without compensation.

ISPs have known for years that the legal framework in the United States was such that they either would have to assist copyright owners in curtailing peer-to-peer consumption on their networks, pay royalties or face the threat of lawsuits based on their vicarious and contributory liability to copyright owners.   If they are going to block copyright enforcement, then in our opinion, they need to return to the idea of paying royalties. Verizon (VZ) recognized this in 2002 when they offered to pay a $1 royalty per broadband subscriber per month for peer-to-peer music downloads.

It is our opinion that Comcast (CMCSA) is making billions from providing access to other people’s property.  Comcast’s last annual report states that it has 18.1 million high-speed internet subscribers generating $8.7 billion in revenue in 2011.  18.8% of all North American internet traffic was used for peer-to-peer filesharing in 2011 and more than 99% of that traffic violated the owner’s copyrights.  It is our opinion that if Comcast is going to profit from blocking content owners from suing subscribers who are illegally distributing their content, then Comcast at least needs to compensate the content owners: 18.8% of $8.7 billion is $1.63 billion potentially owed to content owners.  Comcast can afford to pay because in 2011, they had earnings of $19B on $58B in revenue.

How would that break down?  If we allocate by percentage of bandwidth used, Envisional found that 35% of BitTorrent traffic is used to illegally upload and download movies (non-pornographic), 14% for television and 2.9% is used to do so with music.  (It would be hard for them to argue against this – this study was commissioned by NBC Universal now owned by Comcast.)  It is our opinion that allocated by bandwidth, Comcast may owe movie owners 35% of $1.63 billion or $572 million, owners of television shows $228.9m and may owe music copyright owners $47.4m – just for 2011.  To put this in perspective, Comcast has approximately 20% market share of US broadband households.  Therefore, we believe that if we allocate by bandwidth used, ISPs as an industry may owe movie owners $2.8 billion, owners of television shows $1.1 billion and owe music copyright owners $237m – just for 2011.  (Music files are much smaller than movie files, so an actual deal would not be based on percentages of bandwidth.)

Unfortunately, that still does not make up for the amazing losses all of those industries are facing due to piracy – this Comcast bandwidth is not just being used to consume media, it is being used by Comcast (CMCSA) subscribers to distribute media illegally to consumers all around the globe, everyday, all day long.  If we allocate on a per unit basis, we believe that there were 132 billion illegal uploads and downloads of music files in the United States and 11 billion illegal uploads and downloads of movie files in 2011.  It is our opinion that approximately 26 billion illegal music file uploads and downloads and 2.2 billion illegal movie file uploads and downloads occurred on Comcast’s network in 2011.  If we assume only one in twenty music downloads was a lost sale, at the average $0.99 price on Amazon, that is $1.2 billion in lost music revenue.  If we assume only one in ten movie downloads was a lost sale, at the average $4 price on Amazon, that is $880 million in lost movie revenue – just on Comcast’s network.  In our opinion, we start to see where $6B a year in lost music and $8B a year in lost home video revenue went – right into Comcast’s $19 billion in 2011 earnings. (We think the ratios of pirated files to lost sales are higher – but we would like to see the copyleft argue that they are lower than what we present.)

Lastly, Comcast (CMCSA) now owns NBC Universal.  We initially were excited that with the nation’s top ISP now owning a movie and television studio that some level of balance might enter copyright enforcement on the Internet.  This court filing shows that not to be the case.  Why isn’t Comcast / NBC Universal standing up for content owners, since they are a content owner?  Their own annual report says that piracy is decreasing their home video revenues:

“piracy and intense competition for consumer discretionary spending and leisure time, are contributing to an industry-wide decline in DVD sales both in the United States and internationally, which has had an adverse effect on our filmed entertainment business€ results of operations.”

Why aren’t more movie studios standing up to Comcast (CMCSA)?  Because as piracy has increased and home video sales are collapsing due to piracy, movie studios are more dependent than ever on the pay-per-view (PPV) and video-on-demand (VOD) revenue streams from the cable providers like Comcast and many other ISPs.  PPV and VOD are the next revenue windows after theatrical release.  DVD revenue used to offset potential losses from movies that underperformed at the box office.  Now, if movie studios are too aggressive in enforcing the law, they may end up suffering in negotiations on PPV and VOD revenues with the cable companies who in our opinion, also sell services that provide their products for free.

In our opinion, Comcast (CMCSA) now profits from “shielding” their subscribers from content owners who are trying to stop illegal distribution on Comcast’s network.  Many of the companies trying to stop their content being given away for free are Comcast’s competitors.  Is it possible that enabling piracy has become the secret weapon to provide unfair competitive advantage to Comcast?

Piracy appears to us to have given Comcast/NBC Universal an amazing ability to unfairly compete against other content producers who do not have the profitable revenue streams from selling internet services that come with illegal free content.  Comcast/NBC Universal does not seem motivated to help stop massive illegal distribution of Disney (DIS), Sony (SNE), Warner Bros or Paramount (VIA) product on their networks.  In our opinion, this legal position may show that they are motivated to profit from those who are willing to pay for content but also willing to let their subscribers take their competitors’ product without restraint – they make money either way.  Better yet, by communicating to the market that you can’t get caught for downloading and distributing movies on Comcast, they may gain more market share.

Who is the biggest loser here?  The honest consumer.  By Comcast (CMCSAeliminating the tools content owners need to enforce copyrights and with p2p “filesharing” forecast to double in data volume by 2016, the end result will be more expensive prices for honest people.

If the movie and television studios who do not own internet networks and lack a revenue stream from their stolen content start to collapse the way EMI and other music labels have (Home Video is down 25%, where music was in 2005), Comcast might scoop them up for a song  and we will have a smaller consolidated ISP / content monopoly that employs less people and makes less quality content.  Copyright was one of the barriers to such consolidation that increased access to markets.  Without copyright, we will just get more power in the hands of fewer players.

Advocates for weaker copyright claim that copyright restrains innovation.  Is this innovation?  Is this the bright future of the “open” Internet?

TAGS:  COMCAST, PIRACY, BITTORRENT, DATA CAPS, DATA THROTTLING

TICKERS:  NASDAQ:CMCSA

Google’s “Transparency” Masquerade

There are many stories coming out today about Google providing information about the quantity of DMCA take-down requests to which they respond.

According to VentureBeat, “ In the past month, the report indicates that 1,246,854 URLs have been targeted for removal from over 24,000 domains.”

The picture being painted by the anti-copyright press is that Google is doing their part to help copyright owners.  Nothing could be further from the truth.  If we just look at one search for “Adele Download” we see 138,000,000 search results.  This number of 138 million is the number of times that Google estimates that it sees the word “Adele” and the word “Download” on a web page (URL) that they are tracking to be included in search results.  The screenshot below is 90 pages deep into these search results.

So Google is trying to get people to think that processing 1.2 million take-down requests a month is somehow helping enforce copyright, when their own search engine shows 138 million results for just one artist’s links to downloads, 99.9% of which are to links that not only violate copyright but provide the copyrighted product for free, many with advertisements served by companies that Google owns.

Additionally, the top two web sites on page 90 are for the web site 4shared.com (see hundreds of links to pirate sites on all 90 pages).  If there was any pretense of Google actually helping enforce copyright, they would simply not display search results from 4shared that include the word “Adele.”  How would they know that 4shared.com is different from Rollingstone.com or Amazon.com? Because they have received literally thousands of take-down requests for the word Adele on the web site 4shared.com for months, and 4shared.com keeps posting links to illegal Adele downloads.  Google is in possession of copious data that show that 4shared.com and probably most of the other 24,000 domains are REPEAT INFRINGERS and should not enjoy the same free speech protections as Rollingstone.com or Amazon.com from which they have received little or no DMCA take-down requests.  In our opinion, the reason why they appear to willfully ignore the logical ethical response of discontinuing showing links to 4shared.com in “Adele Download” searches is because they make billions from playing this cat and mouse game with the law.  It is our opinion that this behavior deprives thousands of people of their legitimate income and benefits no one save for enriching Google and their illegitimate business partners who profit from providing illegal access to content.

It takes a team of professionals to get a great product like her’s to market, most of whom are not wealthy and many who depend on royalties from music sales.  When people buy her music, many people who are not wealthy receive their fair compensation for their work.  Google made $14 billion in profit in the last twelve months in part by getting paid to direct people to obtaining Adele’s music for free and depriving many, many people of their legitimate income.

Lastly, due to Google’s current practices of willfully ignoring web sites that repeatedly assist people in stealing content, copyright owners, who are already experiencing reduced revenues due to piracy, now have to pay money to technology companies to find these URLs and send the take-down notices to Google.  This was not how the Safe Harbor given to companies like Google was intended to work.  It was not intended to enrich gatekeepers like Google and reduce the income and wages of content creators.

Will UK Pirate Bay Blocking Have Any Effect?

The United Kingdom High Court has ordered five internet service providers (ISPs) to block access to file-sharing website The Pirate Bay.  It is an important symbolic move, but with Google offering an alternative DNS (Domain Name System, the tech that looks up the sites you browse), Frostwire having built-in torrent search and with BitTorrent building a P2P DNS , this action will probably not have much effect on the volume of piracy.

The five ISPs are Sky, Everything Everywhere, TalkTalk, O2 and Virgin Media.  According to the Court, they will have to comply within weeks.

The Pirate Bay is the #2 BitTorrent site ranked by unique monthly visitors, and provides links to torrent files which are used to illegally download and distribute movies, music, books, games and software.

The British Phonographic Industry (BPI) chief executive Geoff Taylor said: “The High Court has confirmed that The Pirate Bay infringes copyright on a massive scale. Its operators line their pockets by commercially exploiting music and other creative works without paying a penny to the people who created them. This is wrong – musicians, sound engineers and video editors deserve to be paid for their work just like everyone else.

“Sites like The Pirate Bay destroy jobs in the UK and undermine investment in new British artists. We urge anyone using The Pirate Bay to explore the many digital music services operating ethically and legally in the UK – especially those carrying the Music Matters trustmark.”

A spokeswoman for Virgin Media confirmed it had received the order.

She said: “As a responsible ISP, Virgin Media complies with court orders addressed to the company but strongly believes that changing consumer behavior to tackle copyright infringement also needs compelling legal alternatives, such as our agreement with Spotify, to give consumers access to great content at the right price.”

This action follows a ruling by Justice Arnold in February of this year that found that both the operators and users of The Pirate Bay website infringe on copyrights.

According to Virgin Media, a BT spokesman said the firm was in “discussions” with BPI and hoped “to announce an outcome acceptable to both of us soon”.

While we applaud the UK High Court for at least trying to stop for-profit content theft from happening in broad daylight, the fact remains that there are many workarounds to domain blocking.  Not the least of which is just entering 194.71.107.15 in your browser bar which will take you directly the thepiratebay.se.  Additionally, more than a thousand domains that offer links to torrents, many of them in countries that will be much more tolerant of their behavior.  Additionally, the latest version of Frostwire already has built-in torrent search functionality that automatically searches many sites like The Pirate Bay to retrieve torrent files.  This makes the blocking of any one pirate site largely irrelevant.  Also, BitTorrent has been working on a peer-to-peer DNS since 2010 that will also completely work around the blocking of web sites.  In our opinion, the only scalable solution continues to be the enforcement of termination of repeat infringers who repeatedly seed torrents.  If no one is seeding then no one is downloading.  This was envisioned in the United States Digital Millennium Copyright Act (DMCA) in 1998 even before Napster.  Section 512(i) of the DMCA states that an ISP’s shield from liability is contingent on the ISP having a policy that provides for the termination in appropriate circumstances of subscribers who are repeat infringers.

If ISPs were observing this provision within the DMCA, then illegal peer-to-peer transfers would not be 61% of all upload traffic on the internet, 18.8% of all internet traffic in the United States and billions of music files and movie files would not be consumed illegally each year.

Wall of Shame May 2012

ISPs and Fortune 500 Advertising on Piracy Web Sites

This is a screen shot of the pirate website Kick Ass Torrents that shows a search for the latest Lucasfilm movie, Red Tails.  Note that on the date of this posting, May 2, the legal product will not be released until May 22 in the US.  On the right hand side of the page, you can see advertising from ISP AT&T.  These are targeted ads that are designed to show up on web sites used by frequent downloaders of illegal content.  If pirates were unable to sell advertising on these sites, they would not have the resources to operate these sites.  Rather than these ISPs being part of the solution, it appears to us that they are actually helping to drive the phenomenon by buying targeted advertising in these sites.

In our opinion, AT&T appears to be sponsoring the access to Lucasfilm product prior to the products’ release date.

This is a screen shot of the pirate website Demonoid.me that shows a search for rock band ZZ Top’s music.  On the right hand side of the page, you can see advertising from ISP Charter Communications.  These are targeted ads that are designed to show up on web sites used by frequent downloaders of illegal content.  If pirates were unable to sell advertising on these sites, they would not have the resources to operate these sites.  Rather than these ISPs being part of the solution, it appears to us that they are actually helping to drive the phenomenon by buying targeted advertising in these sites.

This is a screen shot of the pirate website Demonoid.me that shows a search for hip hop artist Tupac Shakur.  On the right hand side of the page, you can see advertising from ISP Time Warner Cable.  These are targeted ads that are designed to show up on web sites used by frequent downloaders of illegal content.  If pirates were unable to sell advertising on these sites, they would not have the resources to operate these sites.  Rather than these ISPs being part of the solution, it appears to us that they are actually helping to drive the phenomenon by buying targeted advertising in these sites.

This is a screen shot of the pirate website Demonoid.me that shows a search for hip hop artist Tupac Shakur.  On the right hand side of the page, you can see advertising from ISP Verizon.  These are targeted ads that are designed to show up on web sites used by frequent downloaders of illegal content.  If pirates were unable to sell advertising on these sites, they would not have the resources to operate these sites.  Rather than these ISPs being part of the solution, it appears to us that they are actually helping to drive the phenomenon by buying targeted advertising in these sites.

Imagine an article in Popular Mechanics on how to break into an ATM?  In our opinion, this article from Gizmodo is just as unethical.  Did you know that Adobe laid off 750 people in 2011?  We have counted more than 3,000,000 illegal downloads of just Adobe Photoshop on BitTorrent.  Promoting this behavior kills jobs and drives prices up for honest people.

 

Here is a screenshot of State Farm sponsoring the downloading of the entire Led Zeppelin discography on isohunt.com.

 

EFF Agenda Theories

Even though P2P technologies like BitTorrent currently coordinate more than 150 million computers to work together around the clock to illegally automate content theft (in our opinion), EFF has filed briefs with the court saying that automated anti-piracy countermeasures are unfair.  P2P technologies like BitTorrent and cyberlocker technologies like those used by Megaupload, Filesonic and 4shared are inherently automated.  The scripts that paid uploaders use to drive traffic to content that they post illegally on cyberlockers are inherently automated.  Why would EFF oppose using automation to combat automated piracy?

They write,

Indeed, if Warner were correct, which it is not, Section 512(f) would become largely superfluous. Any company could sidestep accountability for improper takedowns by simply outsourcing the process to a computer. What is worse, copyright owners would have a perverse incentive to dumb-down the process, removing human review so as to avoid the possibility of any form of subjective belief. The tragic consequences for lawful uses are obvious: untold numbers of legal videos would be taken down, whether or not the uses were fair or even licensed.“ 

“Cloud storage sites like Hotfile are becoming increasingly important,” said EFF Staff Attorney Mitch Stoltz. “But improper takedowns like Warner’s undermine their usefulness.”

We believe that what Hotfile is “increasingly important for” is massive distribution of copyrighted material without permission.  Just try a couple Google searches with the word “hotfile” and any copyrighted content you can name.  This search is for the movie Transformers:

 

By the way, the name at the bottom of this list, IMAGiNE is the name of a pirate group that just got arrested on Federal charges for uploading content to sites like Hotfile that EFF seeks to protect.

Sites like Dropbox offer the equivalent service and unlike Hotfile, Filesonic and 4shared actually discourage this type of public hosting and distribution of copyrighted materials without the owners permission.  Why do groups like EFF defend these sites when legitimate businesses that offer file hosting and do not encourage illegal distribution exist?  In our opinion this is because Dropbox, who appears to abide by copyright law, doesn’t drive advertising revenue for Google like Hotfile, Filesonic and 4shared do.  Who sponsors EFF? Here is a link to a book that claims that the families of Google executives sponsor EFF.

Hotfile, Filesonic, 4shared and other piracy-focused cyberlockers (in our opinion) appear to sell subscriptions to access content they do not have the right to distribute and drive traffic to landing pages with links to find that illegal content.  That entire process is automated.  We believe that they, or their uploaders, have software that combs the BitTorrent networks and finds the latests music and movies, uploads it and then create landing pages to announce to the world on Google that they have the content available for distribution without permission.  They may claim that only uploaders do this, rather than their employees, but as we saw in the Megaupload case, money flows to many of these uploaders who are essentially employees of the cyberlocker.  The offer from Hotfile to pay people to do this is posted on this page below.  In the Google search above, there are more than 3.8 million hits on “hotfile transformers.”  We find it hard to believe that millions of links were populated for one movie and one website without automation.  At the very least, their uploaders have automation and copyright owners should ethically be able to use automation to combat automated piracy.  What is unfair is that in our opinion, they abuse the DMCA and require the content owner to identify these links to their content and send takedown notices.  Hotfile and others may process some takedown notices but it appears to us that they do not take down content until they have sold subscriptions, served plenty of subscribers the illegal content and both they and Google have profited from ads served on the pages that accomplished this.  Once it is removed, their automated process or those of their uploaders, just goes out and posts new links to the same content.

 

The Google search “hotfile adele” brought me to this page featuring ads served by Google – see URL in lower right corner.

Which led me to this screen of Hotfile wanting to charge me money to illegally download an album to me that we doubt they have the legal rights to distribute.

Better yet, Hotfile appears to be sharing their profits from illegally distributing content with the uploaders.

All of these links are compiled through automation coordinated by a business that in our opinion is similar to organized crime.  Rather than fighting for the rights of people who work to create content, EFF appears to fight for the rights of organized for-profit enterprises who appear to us to be breaking the law and appear to be profiting from illegally distributing digital goods with no intention of ever paying the owners or creators.