No Surprise Here: Pirate Bay Acquisition Falling Apart

from the and-there-it-goes... dept

Back at the beginning of July we expressed our doubts about GGF's "acquisition" of The Pirate Bay ever actually happening. The quotes from the CEO made very little sense, and he was clearly hedging his language. Some have suggested that the whole thing was just a pump & dump scam (and, in fact, there were early questions about insider trading). As more details came out, the "plan" behind the acquisition just didn't make much sense, and those on the inside started bailing out.

Greg Sandoval's been on the story, and has a few more updates that make the whole deal seem quite unlikely. First, remember how the same day GGF announced a plan to buy the company Peerialism, which would be the key component to making The Pirate Bay function as a legit service? Yeah, well, apparently GGF hasn't actually followed through on that deal at all, and Peerialism notes that GGF hasn't lived up to its contract terms or delivered any of the promised money at all -- and that no development work has been done. Then, this morning, trading in GGF shares was suspended again, as more doubts are being raised about the whole effort. From all this, plenty of people are now starting to realize there's as good chance that the deal itself is never going to happen.

The real question, though, is whether or not it was ever really expected to happen?

Filed Under: hans pandeya
Companies: ggf, global gaming factory x, the pirate bay

Will GGF Really Take Over The Pirate Bay? Could Be Doubtful

from the is-it-all-a-ruse dept

Martin points us to a video interview with Hans Pandeya, the head of GGF, the supposed new owners of The Pirate Bay. To be honest, the interview seems somewhat incoherent, where he doesn't actually answer the questions, and does little to elaborate on the confusing business model he's talked about with others: But what I found most interesting about the interview is that Pandeya repeatedly notes that his shareholders will vote on the acquisition in August, and if the company cannot show a clear legitimate business model, he doesn't think they'll approve the acquisition. The questions try to dig down on this, and Pandeya doesn't really do much to answer them, but it certainly sounds like the company has a giant out. There are some other contradictions in Pandeya's statements, as well. At one point he implies that they'll have agreements in place with record labels in time for this vote, and if they don't, then people will vote against the deal -- but then says that it will take much longer to get those deals in place, and there's no way they'd be ready in time for the vote. The whole thing remains a bizarre mystery that is more confusing than enlightening... but I'm beginning to wonder if the deal will ever happen, in reality.

Filed Under: hans pandeya
Companies: ggf, global gaming factory x, the pirate bay

The Pirate Bay's New Owners: Service Providers Will Pay Us, We'll Pay Users

from the in-theory... dept

One of the things that got a lot of attention with the announced sale of The Pirate Bay to GGF was the claim that the new owners would launch new business models that would compensate copyright holders. Many took this to mean that it would stop offering tools where people could freely exchange content themselves -- but that's not what GGF said. It just said it would compensate copyright holders. That could involve a variety of different business models, as surely they recognize that trying to charge directly would simply lead to mass abandonment of The Pirate Bay. And, indeed, it appears that GGF isn't planning to charge users at all. Instead, it's actually trying out a business model based on BitTorrent's original purpose: making sharing files more efficient by breaking up the pieces so that a single source doesn't bear the brunt of the bandwidth costs. GGF's argument is that they can use the community at The Pirate Bay to reduce congestion for ISPs and bandwidth costs for other service providers. On top of that, GGF claims that rather than having users' pay, its plan is to pay users for providing a service to those who have files to distribute. In an interview with the BBC, GGF's Hans Pandeya explained the plan:

"More than half of all internet traffic is file sharing and P2P [peer-to-peer] traffic and buying Pirate Bay gives us one of the biggest sources of traffic.

"We can then use this massive network of file-sharers to help [internet service providers] reduce overload.

"Let's say a popular song comes out. Rather than a million downloads from a site - which would cause a considerable strain on that ISP - we can take that song and put it out on P2P.

"The copyright holder still gets paid, the users still get their file, the ISP doesn't have a million people all grabbing a file and - for the users who share that song - a payment for putting that file on the P2P network."

This is the sort of thing that sounds good in theory, but that the entertainment industry will never go for. GGF is right, in some ways. The fact that individuals are sharing the content via BitTorrent actually is helping decrease the distribution costs, but as we've seen, the entertainment industry likes to ignore that, and assume that the entire value is in the content, not in the distribution. I can't see the entertainment industry seeing this as a viable solution, even if it makes some amount of sense (distribution is expensive, GGF can use TPB to reduce distribution costs, that seems like a service worth paying for). I just don't see the industry buying into it.

Separately, I have to take issue with one comment from GGF:

Mr Pandeya said that one of the biggest hurdles in overcoming illegal file-sharing was that there was zero cost to the users, while legitimate sites required users to pay for content. The only way to make something more attractive than free was to pay users to share files.

On this, he's fundamentally wrong. There are many ways to make something more attractive than free without paying users. In fact, there are many cases where paying users actually makes something less attractive than free because they're doing things for non-monetary reasons, and the money actually changes the equation significantly. Yes, paying users is potentially one way to make something more attractive than free, but it's hardly the only way, nor is it always the best way.

Filed Under: business models, file sharing
Companies: ggf, global gaming factory x, the pirate bay

The Pirate Bay Has Been Bought By A Public Company [Updated...]

from the didn't-see-that-coming dept

Details are a bit scarce at this point, but Martin alerts us to the news that The Pirate Bay has apparently been sold to a public company for 60 million SEK (about $8 million US) -- at least according to a press release from the supposed buyer, Global Gaming Factory X (GGF). Apparently it's 30 million SEK/$4 million in cash and another the rest in shares in GGF. The company claims the acquisition will be complete in August, and that it will "launch new business models that allow compensation to the content providers and copyright owners." Separately, it appears GGF is also buying another technology company, called Peerialism.

Apparently GGF operates internet cafes and gaming centers in Sweden, and also offers software for managing internet cafes as well.

I assume more details will be forthcoming soon (we'll update the post as necessary), but this raises a variety of questions -- in part about the ongoing lawsuit and the lingering jailterms for the four people who were on trial. Considering it was always quite amorphous who actually "owned" The Pirate Bay, it makes you wonder who sold it and who gets the money. Also, since the guys on trial insisted they actually didn't make much money from The Pirate Bay, they may actually be seen in a worse light after this news, suggesting that even if they didn't make money from ongoing operations, they may have cashed in on the sale. All in all, quite a surprise, and we look forward to additional details.

Update: Ok! Martin alerts us to the fact that Peter "brokep" Sunde has confirmed the deal and provided some details via a Twitter interview. Martin, helpfully, translates:

Daniel Goldberg:
@ brokep Is this correct? http://bit.ly/1YR0m

Peter S Kolmisoppi:
@ danielg0ldberg Yes.

Daniel Goldberg:
@ brokep What a thing! Who gets the money? Who owns the TPB?

Peter S Kolmisoppi:
@ danielg0ldberg Foreign company, with demands from our side to finance a fund for internet projects. We get no money.

Daniel Goldberg:
@ brokep Cool. What do you mean internet project? Will you not have to use the money to cover the damages?

Peter S Kolmisoppi:
@ danielg0ldberg Internet Project in the form of political activism, etc. TPB changed hands in 2006 already to not be sued.

Daniel Goldberg
@ brokep Congratulations, the scoop! Who is the owner of TPB today?

Peter S Kolmisoppi:
@ danielg0ldberg It's partly why we've have been so sure that lawsuits against us is pointless in the end ... :-)

Peter S Kolmisoppi:
@ danielg0ldberg I do not think that I may say for legal reasons. But they are people we trust. And have conditioned things too..

So... that answers some of the questions (and raises a few others!). The money is not going to these guys, but will go towards funding internet political activism. Also, apparently the official ownership of The Pirate Bay had been in the hands of others who are not clear.

Update 2: The official blog post from The Pirate Bay basically says the same thing as the interview above, and suggests that the site operators felt that the service needed new blood to power it and keep it evolving.

Update 3: Apparently The Pirate Bay is also close its tracker and remove the torrents it hosts itself, instead just will rely on third parties, which it will index. The claim is that this is to make the service even more decentralized, but it is a bit of a headscratcher.

Filed Under: copyright, deals, sweden
Companies: global gaming factory x, the pirate bay