Do Pirate Sites Really Make That Much Money? Um... No

from the and-again dept

Tue, Jan 24th 2012 11:17am — Mike Masnick

One of the key refrains from the supporters of PIPA and SOPA in pushing for those bills was about how "foreign pirates" were profiting off of American industry. However, as we've suggested plenty of times in the past, there's little evidence that there's really that much money to be made running such sites. Even more amusing, of course, is that the MPAA/RIAA folks have to both argue that "people just want stuff for free," and that these sites are raking in money from subscription fees at the same time -- an internal contradiction they never explain. I've asked MPAA officials directly (including on stage at the Filmmaker's Forum event last year) that if these lockers are really making so much money, why doesn't Hollywood just set up their own and rake in all that cash. The only answer they give, which doesn't actually answer the question, is that it's cheaper for cyberlockers since they don't pay royalties. But that's got nothing to do with why the Hollywood studios don't get this money for themselves. Of course, the real reason -- somewhat implicit from the MPAA's comments -- is that it knows these sites don't make that much money.

Researcher Joe Karaganis, who did the famed SSRC Media Piracy report, has just come out with a new report talking about just how little these so-called "rogue sites" actually make.

Now, some will immediately claim that this is ridiculous given the videos and photos we've all seen in the last week of police confiscating dozens of expensive luxury cars from the $30 million mansion owned by Megaupload founder Kim Dotcom (er... Schmitz). However, as Karaganis points out, it really doesn't look like Megaupload made that much money from infringement, and even if it was, it seemed that widespread competition and the growing commodity of online storage would make the company less and less profitable. Even so, the actual details of the indictment show numbers much, much lower than what the industry has been claiming, and simply gives much more credence to the fact that Hollywood's estimates of "losses" are complete bunk:

It’s easy to see how Kim Dotcom got rich by being an early entrant in the cloud storage market, in the only part of the business that required a lot of large file transfers. (Much the same is true of broadband adoption, for which piracy has always been the early killer app—especially outside the US where legal web services are still underdeveloped.) As a subscription business selling a scarce commodity, Megaupload’s revenues were many times larger than the largest torrent or link sites. In 2010, execs at Paramount Pictures estimated (in testimony to Congress) its profits at between $41 million and $300 million per year, with the range reflecting different assumptions about its subscription rate. The Justice Department’s recent indictment put the number below the low end of the range—committing to only $175 million in total revenues since 2005–under $30 million/year–and reflecting a roughly 7-1 split between subscriptions and advertising. There are no estimates of how much of this came from legal sources.

In contrast, it’s hard to see how this model remains lucrative. Storage costs are falling rapidly, and there are no barriers to entry or significant network effects. For a comparable market, look to the highly competitive web hosting business rather than search engines or operating systems, which have more characteristics of natural monopolies. Many companies–including Megaupload–already give large amounts of storage away. Many compete for “premium” users, either with inducements or bundling with other services.

$30 million a year is still decent -- but for one of the largest sites on the internet, it's actually pretty dismal, compared to what other sites of that size can earn. The fact that Dotcom was an egotistical show-off who loved throwing around money doesn't really mean that much. Hell, it's pretty easy to find any number of entertainment industry folks who are just as bad, if not worse, in just how ostentatious they are with their wealth. But people don't automatically assume that Jay-Z is a criminal because he spends $1.5 million to close off an entire floor of a hospital for the birth of his daughter. Megaupload may have broken the law, but to automatically jump from saying that because it made some money, to it's all because of infringement, is a leap in logic without facts. But, more to the point, if Megaupload was such a huge portion of the problem -- as the US Chamber of Commerce has insisted -- the fact that we're talking about just $30 million in revenue (some of which is from legit sources) really suggests that very few are making much money in the "piracy" business (despite the horror stories about pirates rolling in cash and funding terrorists and organized crime).

Karaganis went looking for more detailed numbers, and in almost every case, it looked like being involved with such a service was not a particularly profitable endeavor:

The Swedish trial of The Pirate Bay trial in 2009 became an occasion for all sorts of competing estimates of revenues. Record industry group IFPI estimated the site’s revenues at $3 million per year. The MPAA described $5 million in revenues. But prosecutors endorsed a much lower number: $170,000 from advertising (against what the defense characterized as $112,000/year in server/bandwidth costs and $100,000 per year in revenue). This is for a site that appears consistently among the top 100 visited sites in the world.
NinjaVideo, a Brooklyn-based movie indexing site whose owners were arrested in 2011, was alleged by prosecutors to have made $500,000 in 2Ã‚Â½ years. After the site began to make money, the four administrators split the revenue, netting around $33,000/year each after expenses. http://prospect.org/article/ninja-our-sites . Hana Beshara, the site’s primary owner, was sentenced to 22 months in prison under the US No Electronic Theft (NET) Act.
Brian McCarthy, the owner of Channelsurfing.net, a Texas-based sports streaming site, was alleged by prosecutors to have made $90,000 over five years. http://prospect.org/article/ninja-our-sites He also faces jail time and fines under the NET Act.
Immigrations and Customs Enforcement (ICE) made some partial revenue estimates for targets of its 2010 domain name seizure program, Operation In Our Sites, based on information from advertising network Valueclick. According to ICE investigators, Torrentfinder, a BitTorrent site, made about $15,000 in ad revenue from Valueclick over a year in 2008-2009. Onsmash, a music link site, made around $2,500 in 2009-2010.

From there, Karaganis reached out to a number of torrent sites, to see if they'd share some data on how much money can really be made. And the results, again, showed very little money to be made. The sites all had decent hosting costs that they had to pay... and the revenue really isn't that impressive:

The picture that emerges from the survey is one of financially fragile but low cost operations, dependent on volunteer labor, subsidized by users and founders, and characterized by a strong sense of mission to make work more widely available within fan communities. Few such sites make or seek to make money. Many are specialized communities exchanging media of particular types, genres, or languages. A site like NinjaVideo began this way, but grew into a larger, revenue-making operation.

The key point here is that all of these efforts to "follow the money" or cut off the money flow probably doesn't matter all that much to many of the people running these sites. They're not in it for the money, but for other reasons. All in all, it seems pretty clear that there just isn't that much money in running a "rogue site" -- contrary to what the supporters of these bills will tell you.

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Filed Under: cyberlockers, infringement, money, studies, torrent sites

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Mike C. (profile), 24 Jan 2012 @ 10:50am

Calculations...
So, just to clarify, Megaupload as an entire company earns less at $30 million per year than a single movie studio CEO earns over the same time period? Hmmmmm.... makes you wonder if maybe the studios are over-paying their employees a little...

:-)
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Anonymous Coward, 24 Jan 2012 @ 11:33am

Re: Calculations...
Hey, it's freakin' hard to find the level of intelligence required to spend all day trying to figure out how to cram plastic disks into a series of tubes.
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Anonymous Coward, 24 Jan 2012 @ 11:39am

Why counterfeiting and copyright infringement shouldn't be lumped in together
Ive often said that it is a huge mistake to lump sites selling counterfeit goods with those facilitating only downloads: the sites that ship physical goods depend on cash flow and will be effectively shut down by cutting off the money, whereas torrents (where the action will probably head back to) are facilitated by volunteers and hence resistant to economic pressures
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Chosen Reject (profile), 24 Jan 2012 @ 11:41am

Follow that money
I say we do follow the money. If the MPAA estimates losses at over $58 Billion, then that $58 billion must have gone to some other industr[y|ies]. They claim it's gone to pirate sites, but this article shows that it did not. That leaves us to wonder, which industr[y|ies] does the MPAA want to reduce?
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weneedhelp (profile), 24 Jan 2012 @ 11:43am

is that it's cheaper for cyberlockers since they don't pay royalties.
We would have to pay ourselves way too much money to start anything like that.

MPAA/RIAA math at its finest.
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Anonymous Coward, 24 Jan 2012 @ 11:43am

This is not news that will appear on CNN ... thanks for breaking down the numbers. I wonder how these sites can make money doing what Hollywood said it can't.

This also destroys the claim for these rogue sites being so destructive on the economy and supports the idea that anyone using them to get pirated material probably wouldn't have bought it in the first place.
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Anonymous Coward, 24 Jan 2012 @ 11:46am

Downplaying the money the pirates make. You're the broken record, Mike. Your defense of piracy is really sad, my friend.
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Machin Shin (profile), 24 Jan 2012 @ 11:56am

See really what Hollywood fails to see is they claim:

"it's cheaper for cyberlockers since they don't pay royalties."

When really it should be:

It is cheaper for cyberlockers since they don't have to pay off politicians.
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Anonymous Coward, 24 Jan 2012 @ 11:56am

Re:
Really, it doesn't say anything about their effect on the profits of anyone else. Saying that they don't make much money, so they can't be hurting some other person is sort of illogical.

I can sell some product for 1/4 of what it normally goes for, make next to nothing (or loose a ton) and really hurt a legacy business.

The only thing to take away is that it really isn't all that profitable a business venture. The legal risks are high and the profit really isn't there. If you're one of the most popular destinations on the web, and you're revenues are only $30M a year, you're not really doing all that well.
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Overcast (profile), 24 Jan 2012 @ 11:57am

It's simple - the Pirates, if they are making so much mass cash - just need to buy a couple politicians and this problem will go away!!!
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Machin Shin (profile), 24 Jan 2012 @ 12:02pm

Re:
Ok then, say we accept your crazy figures of how these filthy pirates are just swimming in money. Why is it that Hollywood does not just provide these services themselves? They could cut out the pirates and offer better services.

I would much rather download the movie from the studio. Every single time you pirate something you risk getting a nasty virus on your computer. It is not really all fluffy clouds out on the net. Pirating things is full of dangers and risks. If they offered an official alternative then most would go to it to avoid these risks.
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Capt ICE Enforcer (profile), 24 Jan 2012 @ 12:09pm

Capt ICE Enforcer knows where the money is.
After spending 2 minutes accomplishing a google search, and talking to my boss over at the MPAA & RIAA. I have discovered that the Pirates have buried their booty. And that is why you can not find it. Rrrrrrr
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PaulClarkSaintJohn, 24 Jan 2012 @ 12:10pm

Hollywood Accounting
The Hollywood number is from assuming that every download is a lost sale and by triple-counting the revenue from each sale using faulty logic.
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Chosen Reject (profile), 24 Jan 2012 @ 12:12pm

Re:
Hello boys and girls, and welcome to another episode of "Spot the Logical Fallacy".

Today's lesson is ad hominem. It's latin for "To the man". In this logical fallacy, we try to negate a claim by pointing out some negative aspect of the person making the claim. Let's look at a recent example.
Downplaying the money the pirates make. You're the broken record, Mike. Your defense of piracy is really sad, my friend.
As you can see, the speaker has employed the use of this logical fallacy by trying to associate the speaker with illegal activities. Note that whether the one making the claim is actually guilty of the ad hominem attack is irrelevant to the claims made. Let's analyze that.

Mike said:
All in all, it seems pretty clear that there just isn't that much money in running a "rogue site" -- contrary to what the supporters of these bills will tell you.
Now, if Mike does not support piracy his claim stands. Suppose however, that Mike is a piracy apologist. Does that change the truth value of his claims? Not at all. Suppose that Mike is actually Kim DOTCOM in disguise. Does that change his claims? Again, it does not. Suppose, for the sake of argument, that Mike is actually the Hamburglar. Does that change the truth value of his claims? Again, no it does not.

Ad hominem logical fallacies are often employed by people whose positions are weak or incorrect, or who are just plain stupid.

I hope you had fun and learned a lot during this episode. Next time, we'll be learning about Red Herrings.
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Anonymous Coward, 24 Jan 2012 @ 12:12pm

Re: Re:
Exactly. It's not even about the money - lots of these people were PAYING megaupload to get their movie fix.
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Anonymous Coward, 24 Jan 2012 @ 12:12pm

umm..
of course they don't. It's not that they make money, it's that they steal someone else's product to give away for free... doesn't make it right and you should know this mikey.
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Anonymous Coward, 24 Jan 2012 @ 12:16pm

"it's cheaper for cyberlockers since they don't pay royalties."
----------
Right, that's why Hugues Lamy, who played Darth Vader, never gets paid royalties on Return Of The Jedi. Can you believe the 15th most popular movie of all time hasn't turned a profit?

Link

No wonder Hollydud isn't rolling in cash by their accounts...they can't count.
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gorehound (profile), 24 Jan 2012 @ 12:18pm

Re: Follow that money
They want to reduce any Industry in their way of making money.And Hollywood are the biggest lying thieves in the World.2012 is the year I hope the Internet revolts against and works hard to bring down.Just look at their shady accounting and that is where you find the "lost Money".
Probably lost in some execs huge unfair bonuses.
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John Doe, 24 Jan 2012 @ 12:18pm

This makes another, important point
This shows how little people are willing to spend on even "free" content. So this shows the economics at play, the cost of distribution is almost nill and people know this so they aren't willing to spend much more than nill on the content. This is what the MPAA and RIAA are up against and they know it. They are breathing through a straw and are doing everything they can to enact legislation to slow this down or reverse it.

Thing is, the digital cat is out of the back and he ain't going back in.
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Chosen Reject (profile), 24 Jan 2012 @ 12:29pm

Re:
Hugues Lamy was the guy who pointed it out, not the guy who played Darth Vader. You're thinking of David Prowse.
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John Fenderson (profile), 24 Jan 2012 @ 12:35pm

Re: umm..
...and where did he say that makes it right? Where did he ever say that piracy is right? Oh, that's right, never. In fact, he's repeatedly said the opposite.

But you knew that already.

It never ceases to amaze me that people argue that honestly discussing the problems with the industry's approach to handling copyright infringement equates to supporting copyright infringement.
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The Groove Tiger (profile), 24 Jan 2012 @ 12:35pm

Re: umm..
It is wrong because it's stealin', and it's stealin' cuz it's wrong!
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Anonymous Coward, 24 Jan 2012 @ 12:37pm

Re: umm..
If your takeaway from this post is that Mike thinks piracy is right, you are completely missing the point. Reading comprehension fail.
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crade (profile), 24 Jan 2012 @ 12:37pm

"All in all, it seems pretty clear that there just isn't that much money in running a "rogue site""

Except that there is money in running a rogue site, the money just doesn't come from infringment. It will still be just as lost when the site gets shut down a la dajaz1.com or megaupload.
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Anonymous Coward, 24 Jan 2012 @ 12:40pm

Where is the protection for the non-infringers. If I store my grandfathers first car a family heirloom I've paid to store in a storage locker. Just because some jackass four hundred units over is storing some illegal DVD's Do I lose my family's car??? Or am I now going to get kicked out of my apartment because someone is growing pot two hundred apartments over?
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duh, 24 Jan 2012 @ 12:40pm

Re:
Sadly, you missed the point. Either respond to what was actually said or go home.
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rangda (profile), 24 Jan 2012 @ 12:43pm

Re: Re:
Suppose, for the sake of argument, that Mike is actually the Hamburglar.

No wonder my happy meals keep disappearing every time I read this site. :(
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crade (profile), 24 Jan 2012 @ 12:51pm

Re:
You are still thinking in the 'we have rights' mindset.. Get with the times man!
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rubberpants, 24 Jan 2012 @ 12:53pm

Re: umm..
Where did he say it was right?
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Anonymous Coward, 24 Jan 2012 @ 12:53pm

Re:
While guy above me is right, these sites don't hurt the economy as a whole because money not spent on downloaded material is spent elsewhere, not destroyed.
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hothmonster, 24 Jan 2012 @ 12:55pm

Re: Re:
Red herrings? Those are for chopping down the biggest tree in the forest right?
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foljs, 24 Jan 2012 @ 12:57pm

Re: Follow that money
You can lose money without that money going to someone else as a profit.

The MPAA companies claim they lost X amount of money to lost illegal downloads. The profits of the guys facilitating the illegal downloads have nothing to do with those money.

If I stole your 100,000 dollar car and sell it for just $1,000 that doesn't mean that you weren't hurt 100,000 dollars financially.

Not everybody would have bought everything that he downloads illegally. But a lot people would have bought some things if they couldn't get them for free off of torrents. I know I would, since there is albums and stuff I would have bought at any reasonable cost if I couldn't get for free.

Those are actual lost profits for the MPAA companies -- and they are not related to what torrent site owners make from the sale of something totally unrelated, namely ads.
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foljs, 24 Jan 2012 @ 1:07pm

Re: Re:
Logical fallacies are bullshit for teenagers that first ventured into Logic or discussions.

Reasons:

1) A response (a comment for example) can have lots of logical fallacies and still be valid. Here's an example with an ad-hominem:

"You are an idiot to say that the earth does not revolve around the sun".

That is has an ad-hominen does not matter, the comment is still right.

Address the GIST of the argument (what is told), not it's construction. And invalid argumentation can still point to true facts.

2) Lots of "logical fallacies" are perfectly logical and useful. Like, "appeal to authority". Since life and knowledge is limited it's only logical and all too useful to take expert statements over statements by someone not expert in a field. It saves times and it is statistically more correct than the opposite. I'd rather listen to my doctor about my condition, that some random, non MD guy making perfectly formed arguments that I cannot evaluate for lack of knowledge, but that my doctor says are bullshit.
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rubberpants, 24 Jan 2012 @ 1:09pm

Re: Re: Follow that money
So, if I tried to sell a drawing I did of a spider for $5000.00 and no one bought it but someone made a copy of it for themselves, would you say that I lost $5000?
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Anonymous Coward, 24 Jan 2012 @ 1:19pm

Re: Re: Re: Follow that money
Even better! What if I tried to sell a drawing of $5k for a one spider and someone made a copy of my drawing of $5k, wait, I can see why this is stupid.
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Machin Shin (profile), 24 Jan 2012 @ 1:22pm

Re: Re: Follow that money
The real problem with this whole "stolen car" analogy is that you can't compare digital items to physical ones. If you really insist on cars though it is something a bit more like this.

You designed a car and are now asking $100,000 for that car even though you have them built by a machine and they cost you $.001 to make each one. Even though it cost you almost nothing to produce this car a good number of people still are buying it.

Now one day someone gets one of your cars and sets up their machine so they can now make the same car. They instead of selling them for $100,000 just give them away for free.

Thing is the guy giving them away does not support the cars he gives away. The paint might not be perfect, the manufacturing in general is a little suspect. In fact the car you get from him might blow up in your face when you crank it.

So now people get to choose, do I risk getting it from a shady source for free or do I go and pay for it.
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rubberpants, 24 Jan 2012 @ 1:34pm

Re: Re: Re: Re: Follow that money
It just reminded me of this: http://www.geekologie.com/2008/11/good_idea_man_submits_drawing.php
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Anonymous Coward, 24 Jan 2012 @ 1:35pm

Megaupload may have broken the law, but to automatically jump from saying that because it made some money, to it's all because of infringement, is a leap in logic without facts.

How about mostly? That's what the indictment suggests, which is a finding of the grand jury based on evidence.
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rubberpants, 24 Jan 2012 @ 1:48pm

Re: Re: Re:
Logical fallacies are bullshit for teenagers that first ventured into Logic or discussions.

My doctor wrote a 1000 page essay that said only idiots point out the logical fallacies in logical fallacies, because logical fallacies are for idiots who beat their wives just like you.
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Anonymous Coward, 24 Jan 2012 @ 1:56pm

Re: Why counterfeiting and copyright infringement shouldn't be lumped in together
Most of megaupload's traffic, as with all the cyberlockers, was illegal. Most of Kim Dotcom's fortune came from piracy.

This "article" is just more of what has now become daily lying from Mike Masnick.

Sad and pathetic.
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The eejit (profile), 24 Jan 2012 @ 2:02pm

Re:
But the trial isn't due to start for a few more days...

Did they bounce it up, or do you know something we don't?
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That Anonymous Coward (profile), 24 Jan 2012 @ 2:03pm

Re: Capt ICE Enforcer knows where the money is.
Are you sure that was what was said? I mean it is possible it was hard to understand them when their heads are so far up their own bootys.
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Anonymous Coward, 24 Jan 2012 @ 2:13pm

Re:
Don't store stuff at a place that's primarily used to store illegal material. Duh.

Your folks weren't around much when you were a kid, were they?
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Anonymous Coward, 24 Jan 2012 @ 2:18pm

They're not in it for the money, but for other reasons.

Mike Masnick says Kim Dotcom wasn't in it for the money.

uh huh.

Are you ok, Masnick? Your home life alright? Speaking a lie this egregious is pretty bizarre.
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crade (profile), 24 Jan 2012 @ 2:24pm

Re: Re:
Lol, you don't think things through much do you? "Primarily used" is just a stupid buzz word, there are no requirements you can actually check to see what businesses they are going to target. Today your storage locker is fine to use, tomorrow someone uses the next one over to store a harry potter movie and suddenly it's a "rogue" business and they burn your stuff.
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Planespotter (profile), 24 Jan 2012 @ 2:36pm

Bit late to this one but just wanted to say...

I worked as an Admin/Mod on a fairly large bittorrent site dedicated to sharing documentaries and I can tell you that over 5 years I never made a penny and neither did anyone else. We just about managed to cover our servers which we upgraded yearly and our bandwidth costs, we jumped countries fairly regulatly as well and everytime we did that we had to stump up more and more cash. We had donations but no advertising as the members of the site didn't want them and of the tens of thousands of members we had only a very small % actually donated, time and time again the senior members and staff would chip in $50+ to dig us out of a whole with our provider. If we ever had surplus cash that was "invested" in a rare documentary that would be released as thankyou to our members.

So ignoring the fact that Megaupload cannot be compared to a normal member driven torrent site I'd be seriously amazed to see anyone running a torrent indexing site turning a massive profit if they are also running one or two trackers.
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MAJikMARCer (profile), 24 Jan 2012 @ 2:44pm

Re: This makes another, important point
I think you mean the cat is out of the bag, but I agree with your point. Production cost vs. Marketing and Distribution has shifted dramatically, especially in music. The middle-men made their money in the marketing and distribution side. Now that side has crumbled to the point that the margins are razor thin, and there isn't a lot of money to be made in production alone, using the traditional models.

The thing is the media companies still do have some value that people are willing to pay for, but it will be less than they made traditionally, there is no question there.

It's perfectly reasonable for them to try to put off the change in their business as long as possible, but they are getting desperate and dangerous now.

The media companies will have to change, the question is will it be on their terms or ours? I believe the solution is going to come from us, the consumers. We are going to stop spending money on their products, and consume LEGAL alternatives, spending our weakening dollars on more important things.
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Anonymous Coward, 24 Jan 2012 @ 2:55pm

Re:
Except Mike wasn't talking specifically about Kim where you pulled that quote out of context...
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mmm food, 24 Jan 2012 @ 3:15pm

So, which ever group has the least amount of money, is the one to defend?

That's a total ad hominem. The validity of someone's argument has nothing to do with what their income is.

Most thieves who mug people probably don't have much money either. Even if they mug the rich, does that justify their actions?

Also, to say that megaupload was used for mainly legitimate purposes is really a stretch.
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rubberpants, 24 Jan 2012 @ 3:19pm

Re: Re: Why counterfeiting and copyright infringement shouldn't be lumped in together
We missed you while SOPA was getting destroyed. It wasn't the same around without your talking-points. Anyway, look on the bright side, you'll have a lot more time to spend with your family until after the election when someone would actually consider your toxic legislation again.
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Anonymous Coward, 24 Jan 2012 @ 3:24pm

Re:
of the tens of thousands of members we had only a very small % actually donate

BUT PIRATES ARE THE BEST CUSTOMERS!?!?!?!?!?!?!

lol
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Anonymous Coward, 24 Jan 2012 @ 3:25pm

Re:
It's not a stretch, it's a lie.

Megaupload, as with all cyberlockers, primarily hosted infringing material.
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MrWilson, 24 Jan 2012 @ 3:27pm

Re: Re: Why counterfeiting and copyright infringement shouldn't be lumped in together
[citation needed]
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KingFisher, 24 Jan 2012 @ 3:46pm

Well we learned something we already know, the MPAA and RIAA are full of bullshit. What we didn't know were the actual numbers behind these sites. Oh trustful data. And what do you know its in the lower double digits for the millions sector...oh wait...some sites are even as low as making only a few hundred thousand every few years. Amazing!
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Rikuo (profile), 24 Jan 2012 @ 3:47pm

Re: Re: Why counterfeiting and copyright infringement shouldn't be lumped in together
I hope you realise that the bulk of this article is actually about a different article written by somebody else? Did you not notice the long sections of quotes?
This isn't Mike lying about something, spewing forth something out of his ass. This is Mike giving his opinion on an article written by somebody else and what he thinks of the issue.
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Rikuo (profile), 24 Jan 2012 @ 3:50pm

Re: Re: Re: Follow that money
You've got it backwards. You didn't account for DRM. Using your car analogy, DRM would cause the car to shoot forward at 100 miles/hour until it smashed into a brick wall if you didn't log in to the five or six different services, or if the servers were down. If your car analogy were fact, I would actually be more worried about the safety and usability of the 'legit' product, rather than the 'pirated' version.
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Rikuo (profile), 24 Jan 2012 @ 3:55pm

Re:
"Its cheaper for cyberlockers since they don't pay royalties".

Versus Hollywood studios having to pay royalties to...who? Themselves? If Disney set up a Disney cyberlocker with free downloads of Disney content...who would they be paying royalties to?
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The eejit (profile), 24 Jan 2012 @ 4:15pm

Re:
Kim had other ways of making money, like insider trading. Maybe he knew something about hollywood we didn't.
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The eejit (profile), 24 Jan 2012 @ 4:18pm

Re: Re:
Way to miss the point: Planespotter wasn't in it for the money. It's possible to make money through it, but you won't make lots of money.

These were documentaries, and some of them cost a lot to digitize, due tot he nature of videographic film degradation. If you pay lots of money to ditigize something for archival and other sharing, then why not have that be okay?

OR is that too much "free-dom" for you?
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ltlw0lf (profile), 24 Jan 2012 @ 4:19pm

Re: Re: Re:
That is has an ad-hominen does not matter, the comment is still right. Address the GIST of the argument (what is told), not it's construction. And invalid argumentation can still point to true facts.

I think the point is not that the ad hominem attack matters or not, just that the reader who reads the attack will recognize the attack as foul play, and thus discount the other parts of the argument accordingly. There is being correct, and there is being nice, and many believe that if you don't have something nice to say, you probably shouldn't stay anything at all.

Like, "appeal to authority". Since life and knowledge is limited it's only logical and all too useful to take expert statements over statements by someone not expert in a field.

Again, it isn't the argument that may be false or true, but the perception of the reader of the argument. If you say "I'm a doctor and I think LSD should be legalized," whether or not that is true or not, the fact that you have to mention you are a doctor in some way cheapens your argument. That is the appeal to authority. I know, myself and many of the folks I work with, if you say something and then have to prove your statement by saying you should know because you're an expert, most of the time we say "yeah, right!" as in we don't believe you, especially since it is pretty easy to say you are an expert in the field without providing credentials to prove it. That is what makes appeal to authority a fallacy.
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The eejit (profile), 24 Jan 2012 @ 4:20pm

Re: Re:
Storage != hosting. Moreover, EMI has a place here: was what MU did any different from what mp3Tunes did? If so, how? And how does that affect the DMCA?

These are all questions that need answering.
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Anonymous Coward, 24 Jan 2012 @ 4:36pm

Re: Re: Re:
No, it just puts an exclamation point on what we all already know:

Freetards only care about ripping shit off and getting stuff for free.
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Anonymous Coward, 24 Jan 2012 @ 4:41pm

Re: Re:
Wow you can tell that millions of terabytes of content you don't even have access to is infringing, maybe the AA is right youtube can just hire you to review the 40hours of video uploaded every minute.

"I KNOW SHIT BECAUSE I KNOW IT FUCKER!"
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Greevar (profile), 24 Jan 2012 @ 4:45pm

Re: Re: Why counterfeiting and copyright infringement shouldn't be lumped in together
"Most of megaupload's traffic, as with all the cyberlockers, was illegal. Most of Kim Dotcom's fortune came from piracy."

Nice assumption. Where's the data to back up that arbitrary claim? As the article points out, the data shows that very little of that money came from infringement. The Anonymous Shill is full of shit.
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Anonymous Anonymous Coward, 24 Jan 2012 @ 4:53pm

Re: Follow that money
These numbers might make sense if they are including their payouts to congress and lobbyists.

Then again, I don't think congress and lobbyists are getting THAT much.
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Greevar (profile), 24 Jan 2012 @ 4:55pm

Re: Re: Re:
After you fetch a shrubbery.
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Anonymous Anonymous Coward, 24 Jan 2012 @ 5:01pm

Re: Re:
Certainly not the writers or actors or anybody else who participated in the making of their movie, like the Brothers Grimm, for example.
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Anonymous Anonymous Coward, 24 Jan 2012 @ 5:17pm

Re:
Grand Jury hearings are sealed. Did you hear something not allowed?

They say a prosecutor could indict a ham sandwich. An indictment does not equal conviction.

It remains to be seen how much smoke the DOJ is blowing up other peoples asses.

It is up to the prosecution to prove the criminality. There may be some, but I would bet a tin whistle it won't be for infringement.

I wish I had a tin whistle to bet...Do they make those anymore?
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Anonymous Anonymous Coward, 24 Jan 2012 @ 5:21pm

Re:
Could you take a rough stab at that percentage? It would be interesting, even though one data point is practically worthless.
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Anonymous Coward, 24 Jan 2012 @ 6:34pm

Re: Re: Re: Why counterfeiting and copyright infringement shouldn't be lumped in together
The article doesn't show anything of the sort.

Almost 75% of cyberlocker traffic is infringing.

http://documents.envisional.com/docs/Envisional-Internet_Usage-Jan2011.pdf
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Anonymous Coward, 24 Jan 2012 @ 8:23pm

I "ran" a successful "pirate" site for 3 years, and to be honest, almost every month we had to pay out of our own pocket.
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Anonymous Coward, 24 Jan 2012 @ 8:30pm

Re: Re: Re:
Well, just to point something out, it is no longer 40-48 hours of video a minute. Engadget and I believe The Verge had articles the other day on the matter. Apparently, right now, there are 60 hours of video uploaded to Youtube per minute. For those keeping tabs, that's 2 and 1/2 days worth of video EVERY minute.

Not even remotely possible (at least not with 100% accuracy) to monitor and check that much video.

Not too mention that the 60 hours is only going to keep increasing. Yet they seem to think it's just magically possible to screen all of it for any infringing material. They can't even tell on a few minutes of video that they actually look for especially that it was uploaded by themselves if it's infringing or not, but they want Google/Youtube to check all that. Hollywood, the land where Jedi hand waving is thought to be a real thing and is the be all end all problem solver for everything.

[waves hand] You all will vote this comment both insightful and funny.
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Anonymous Coward, 24 Jan 2012 @ 9:13pm

Re: Re:
I wish I had a tin whistle to bet...Do they make those anymore?

Bet you've got a tin foil hat, though. But I doubt you'd want to risk losing that.
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Anonymous Coward, 24 Jan 2012 @ 9:18pm

I've asked MPAA officials directly (including on stage at the Filmmaker's Forum event last year) that if these lockers are really making so much money, why doesn't Hollywood just set up their own and rake in all that cash. The only answer they give, which doesn't actually answer the question, is that it's cheaper for cyberlockers since they don't pay royalties. But that's got nothing to do with why the Hollywood studios don't get this money for themselves.

Maybe it's because the cyberlockers also don't incur production costs either. Just a thought.
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Jay (profile), 24 Jan 2012 @ 11:34pm

Re: Re: Re: Re: Why counterfeiting and copyright infringement shouldn't be lumped in together
If 75% of the cyberlocker traffic is infringing, why doesn't the movie or music industry offer their own damn torrents?
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Jay (profile), 24 Jan 2012 @ 11:49pm

Re: Re: Re: Re:
I have a very good diagram for you:

Here's the point-----------> .
Here's Pluto -------------------->0

Here's your head-----------------> `
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PaulT (profile), 25 Jan 2012 @ 1:44am

Re: Re: Re: Re: Follow that money
Exactly. If we push this analogy even further, the guy copying the car for free will have removed the DRM before duplication, so only those who actually paid would have to worry about its effects (though to make the analogy fair, the car would simply stop working rather than try to destroy itself!).
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The eejit (profile), 25 Jan 2012 @ 2:02am

Re: Re: Re: Re:
Again, you haven't addressed my arguments OR hgot cites for your assertions. Just gone right to "people want free shit!!!"
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PaulT (profile), 25 Jan 2012 @ 2:08am

Re: Re:
To do it successfully, that require not only effort, but re-examining the way they do business so that it aligns with the product quality the pirates are already offering (e.g. no artificial windows, no region blocking, no DRM, choice of formats, etc.)

So no, these lazy, greedy, stupid bastards won't do it while they can pay lawyers to force their current practices to stay.
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PaulT (profile), 25 Jan 2012 @ 2:23am

Re: umm..
Come on man, it's the new year, time for a fresh start. Shouldn't you be educating yourself? I'd start with reading comprehension, then maybe a debate class where you can learn to talk like an adult. it's never too late to join the real world.
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PaulT (profile), 25 Jan 2012 @ 2:33am

Re:
You know, you'd look less like a moron and a fool if you'd stick to facts and stop the personal attacks on people for things they didn't say...
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Planespotter (profile), 25 Jan 2012 @ 2:48am

Re: Re:
They may well be... who knows how many people purchased the documentaries after they had downloaded them first. All I'm saying is that we never made money from the site, barely enough to cover the costs. You comment proves nothing here other than their is possibly "no honour amongst thieves".

Our demographic, after Western norms (US/Can/UK/EU/AUS, were largely eastern European and emerging nations who didn't have access to the material in their region. Do you know how many really good documentaries are locked away at extortionate retail/rental pricing? $450 to rent a set of VHS tapes for a week!! We set up a specific group who just trawled online/offline Library catalogs looking for them.
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Anonymous Coward, 25 Jan 2012 @ 3:20am

http://i.dailymail.co.uk/i/pix/2012/01/23/article-2090492-116B063B000005DC-466_634x478.jpg
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PaulT (profile), 25 Jan 2012 @ 3:36am

Re:
Any point to posting that, or is a change in bandwidth meant to prove something?

Any reliable sources for that data, or just a right-wing tabloid prone to making shit up?

Any historical data to compare it to, or just that cherry-picked period?
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Anonymous Coward, 25 Jan 2012 @ 3:58am

Re: Re:
"Primarily used"? And who gets to decide that? The person who uses the place for the "illegitimate" purposes, the police, the judge, or the anonymous coward? And is that before or after the court order?
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Richard (profile), 25 Jan 2012 @ 4:06am

Re: Re: Why counterfeiting and copyright infringement shouldn't be lumped in together
Most of megaupload's traffic, as with all the cyberlockers, was illegal.

Absolute rubbish.

Most of the peopel I know make substantial use of cyberlockers and it is ALL LEGAL.
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Anonymous Coward, 25 Jan 2012 @ 4:08am

Re: Re: Why counterfeiting and copyright infringement shouldn't be lumped in together
Hey, cheer up! I understand that having to work for Dodd & co. would make anyone feel sad and pathetic, yet in this economy it's hard to choose your job. Maybe Techdirt community can help you find a hobby to make you feel better about yourself. Maybe something creative so you wouldn't be reminded of your employers?

love,
Happy and Cheerful.
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Richard (profile), 25 Jan 2012 @ 4:12am

Re: Re: Re: Re: Why counterfeiting and copyright infringement shouldn't be lumped in together

Almost 75% of cyberlocker traffic is infringing.

http://documents.envisional.com/docs/Envisional-Internet_Usage-Jan2011.pdf

Not sure I trust an ESTIMATE made by the entertainment industry.

But in any case the original AC said "as with all cyberlockers" whereas your quote is averaged across the whole sector.

In particularI do not believe that the statement is true for Dropbox - which I (and many people I know) make very substantial, legal, use of.
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Planespotter (profile), 25 Jan 2012 @ 4:17am

Re: Re:
I left a year or so ago so don't have any relevant data to offer I'm afraid.
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Richard (profile), 25 Jan 2012 @ 4:47am

Re: Re: Re: from the pedantry dept
Here's an example with an ad-hominem:

"You are an idiot to say that the earth does not revolve around the sun".

Actually that is NOT an ad hominem it is at most an insult!

This is an ad hominem:

"Because you are an idiot your opinion that the earth does not revolve about the sun must be incorrect"

However what you said amounts to the reverse:

"Because you hold the incorrect opinion that the earth does not revolve about the sun you must be an idiot"

To amount to an ad hominem the statement must rely on the status of the target to counter his argument - as opposed to using his argument to demean his status.
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Richard (profile), 25 Jan 2012 @ 5:03am

Re:
But the production costs are already sunk - so any money they made would be a positive.

The point you fail to grasp is that YOU CANNOT EXPECT TO CHARGE SIGNIFICANTLY MORE THAN THE MARGINAL PRODUCTION COST FOT ANY PRODUCT.

You must therefore assess your fixed costs accordingly and refrain from embarking on any project that will not be financially viable on those terms.

This is basic economics. If you observe anything different happening anywhere then you can only conclude that the market is not a free one.
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Ed C., 25 Jan 2012 @ 5:54am

Re: Re: Re: Re: Why counterfeiting and copyright infringement shouldn't be lumped in together
Already addressed that. Even Envisional's head of piracy intelligence, David Price, pubically addressed their report.
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Ed C., 25 Jan 2012 @ 6:00am

Re: Re: Re: Re: Re: Follow that money
There are "trojan" DRM schemes that effect the use of the content rather than just stopping cold.
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Joe Dirt, 25 Jan 2012 @ 6:43am

Re:Re: Follow that money
@ Machin Shin.
I will choose the shady source every time. I have a dependable backup, or can ask a co-worker for a ride, and if I don't like the free alternative, I can always try a different free model.

Why should I part with my hard earned money to pay someone many times the real value of that product? Just so long as I have a backup plan should the free alternative cause problems.

This way, I save my money for more useful things, like staying out of debt, college fund for the kids, and a retirement fund for my spouse and I.
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Greevar (profile), 25 Jan 2012 @ 6:47am

Re: Re: Re: Re: Why counterfeiting and copyright infringement shouldn't be lumped in together
"The article doesn't show anything of the sort."

I didn't say the article provided the data, I said the article says the data that was found showed that little of that money came from infringement.

"Almost 75% of cyberlocker traffic is infringing."

Right, a study commissioned by NBC is going to provide factual, reliable data. We already know NBC and their ilk lie on a regular basis about it. Why should this be any different? Come back when your "evidence" isn't funded by someone seeking a slanted result.
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Anonymous Coward, 25 Jan 2012 @ 7:40am

Re: Re: Follow that money
If you stole a "$100,000" car but could only get $1,000 what that actually means is the car was only worth $1,000 regardless of what the car's owner thought it was worth.

You're also missing the point of the post you're replying too. If people would have bought albums but instead torrented them then they still have that money they would have spent and they either saved it or spent it on something else because the money clearly isn't going to the web site operators. So the question remains, what industr[y|ies] does the MPAA want to reduce or does the MPAA just want people to save less?
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Rikuo (profile), 25 Jan 2012 @ 10:28am

Re: Re: Re: Re: Re: Follow that money
One game I know of on the PC, Anno 2070, has a 3 machine limit DRM. Once you've installed it on 3 separate machines, it won't work on a fourth.
There will certainly be a situation where someone buys the game, only to try and run it on a machine that doesn't meet minimum system requirements...or three. Bam, there's their copy of the game, self-destructed. Through no fault of their own (the very least the game could do would be, during the install process, throw up a warning that the computer isn't beefy enough to play).
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Justin Olbrantz (Quantam), 25 Jan 2012 @ 12:11pm

Re: Re:
Assuming that data is accurate, that graph simply suggests that MegaUpload provided roughly 15% of the world's traffic. Though some care should be taken since AP traffic also dropped at the same time, which could mean that 15% drop can be partially attributed to something else.
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PaulT (profile), 26 Jan 2012 @ 3:08am

Re: Re: Re:
It doesn't even suggest that, to be honest.

It shows that over a 24 hour period, a single monitoring service noticed drops in traffic over specific ASNs that roughly coincided with the time that MegaUpload was shut off.

It leaves far too many questions open. For example: how does this compare to other days and weeks? What else was hosted through those same ASNs and did they also have problems or shutdowns? Were the sites also avilable through other ASNs and if so what was their traffic? The label says that the shutdown of MegaUpload "appears" to have taken place at 1900 GMT - is there any confirmation that this is so, or is this a guess? I'm not even sure what the scale of the graph is meant to show - Kbps? Mbps? MBps?

Even without that, the amount of traffic on a single day doesn't prove anything, nor is a high level of traffic in and of itself a problem unless you're the type of delusional liar who can't accept that not all traffic was infringing (reliable figures to prove it, ACs, if you're going to claim otherwise). I'd bet you'd see a similar drop with most popular services being shut down, but that wouldn't make them infringing.

No, it's a totally stupid image to post, and I can't help but notice that the poster hasn't come back to defend himself and his out-of-context meaningless data from unreliable sources...
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Anonymous Coward, 17 Feb 2012 @ 3:42pm

Re: umm..
A: It's not the same thing as stealing
B: He didn't say Piracy is right
C: Hollywood's claiming that Piracy is lucrative for these sites, Mike was rightly refuting that claim.

If you're going to post a comment, do everyone a favor and do your research first.
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Asashii, 24 May 2012 @ 1:12pm

websites that make big bucks like Dip-$hit-dotcom's website( never used once )make profits and they host copyright material and they get busted i have NO sympathy for their legal woes or trouble, go NO profit file sharing like most private sites because these big money makers are going to be burnt to the grund as it should be, liked it better when you had to be on the up and up or know somebody to get cool downloads, this mass production cookie cutter torrent sites are bringing to much exposure and now you have every idiot and their mothers file sharing, i will be glad when it gets shrunk back down to private elites only it was safer and didnt have to deal with idiots cant play files and dumb a$$ kids who dont know how to read plain instructions on how to crack a game, water downed and over exposed, hope it collapses in on itself like a dying star and we can get away from all these careless and profit making pirates !!!!!!!!!
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Asashii, 24 May 2012 @ 1:17pm

Re: Re: Re: Re: Re: Re: Follow that money
its called system requirements, its listed when you purchase the product or can be easily found on website, if one doesnt understand then he/she should not be on a computer to begin with trying to play games or have a knowledge based person help them in their purchasing needs, cant fix stupid and have know sympathy for those that burden the hell out of others because of it !!!!!!!!!!!
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Thomas, 10 Jul 2012 @ 7:00am

Re: Follow that money
That $58 billion doesn't actually exist. There is nowhere to follow it to.

It's an estimate of losses. Meaning they take the amount of movies that are downloaded and multiply that number by either the theatre ticket price or DVD cost (depending if it's a new movie or the DVD is released).

This assumes that all the people who were willing to watch said movie for free would have actually paid a ticket/DVD price to watch it, which 95% of them wouldn't. So, they really haven't lost nearly as much money. And the money they perhaps may have lost wasn't actually spent elsewhere, it's just still in the pockets of the consumer who 'would have' otherwise spent it on their movies.
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Onar, 12 Apr 2013 @ 5:49am

If I buy a movie and we are ten buddies watching it, is it pracy? I do not think so...

If you pay for the download, there would be downloaded less. You rahter borrow the DVD from a friend. Also you would watch less movies, talk about the movies less and thereby the movie get promoted less. By downloading the movie, more people hear about it.

Within a frame, I think downloading often can be positive. Many people do not download because of time, work or other and will always buy a film, go tomovies etc.
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