MPAA's Argument Against Hotfile Assumes Any Popular Content Online Must Be Infringing

from the and-for-this-they-want-summary-judgment? dept

When the MPAA filed its initial lawsuit against Hotfile, we noted that we were surprised at just how weak the argument was. Honestly, we thought that for all the talk of how evil Hotfile was, they would have a stronger argument. As expected, the MPAA has now filed for summary judgment in the case (standard behavior at this stage in a case like this). What's interesting is how much the motion for summary judgement appears to match the US government's indictment against Megaupload, including the questionable interpretation of perfectly reasonable behavior. Basically, the MPAA seems to think that the only possible interpretation of certain facts is that Hotfile was heavily encouraging copyright infringement. While there are some points that may cause trouble for Hotfile (its failure to set up a DMCA agent is a big one), many of the claims are ridiculous and seem to exist in bizarro world.

The more you read, the more you shake your head. The MPAA's circular arguments can basically be summarized as "We shall prove that this tool is illegal. Exhibit A: People use this illegal tool." Very large segments of the motion are basically this tautology over and over again. "Oh my goodness, this is illegal, and our proof is that it's designed so people use it!"

For example, the motion focuses on Hotfile's affiliate program for uploaders, which is quite similar to Megaupload's. However, the MPAA interprets this in a bizarre way suggesting that it was designed to encourage infringement. Why? Because it was designed to encourage usage. Really. The affiliate program pays people more if more of their content is downloaded. According to the MPAA that alone is evidence of encouraging infringement. That seems crazy. As we pointed out, plenty of artists used such services themselves to distribute their own works free to consumers, while still getting paid for it at the same time. This is a business model that cuts out the legacy gatekeepers... but does that make it against the law? In the eyes of the MPAA, absolutely.

Hotfile’s Affiliate program affirmatively discourages users from uploading files that are not downloaded frequently, because those files consume Hotfile resources without generating premium subscriptions. SUF 16(a)(iv)-(vi); e.g., Yeh Ex. 61 at 13 (“some webmaster just . . . upload LOTS of gigabytes, but don’t promote their files. So these kind of webmasters use our server resources, upload resources, bandwidth, diskspace and at final they make our service to work slow”). Hotfile discourages unpopular files through a “ranking” system (Platinum, Gold, Silver, Bronze, and Copper), which governs how much Affiliates are paid. SUF 16(a)(iv). Hotfile assigns “rank” based in part on an Affiliate’s ratio of uploaded files to downloaded files....

Hotfile also uses its Affiliate program to encourage Affiliates to upload large files – because “free” users frustrated with downloading large files at slow download speeds are more likely to upgrade to premium accounts to get faster download speeds

Notice the implicit assumption here: encouraging people to post content that people want and is large must mean it's infringing. But that's a logical leap that the MPAA makes without anything to back it up. There is nothing that says a large popular file must automatically be infringing. Why would the MPAA even make such an argument?

Also, just like the Megaupload indictment, they use the lack of a search engine to suggest something damning.

Because Hotfile avoids having a search function, Hotfile depends on link sites to host, organize and promote download links to content stored on Hotfile. Hotfile’s Affiliate program encourages the development of pirate link sites that do nothing other than promote download links.

This is especially ridiculous because in earlier cases the entertainment industry has argued exactly the opposite: that having a search feature means that these file sharing services were inducing and encouraging infringement by not just being neutral content hosts. The obvious thing to do to remain in compliance with the law, then, is not to have a search engine. Yet, now, they're claiming that not having a search engine is evidence of trying to encourage infringement. So which is it? Is having a search engine illegal or is not having a search engine illegal?

Basically, the MPAA doesn't care. To them, either is illegal because they just can't handle that they're losing their position as a gatekeeper.

Similar to the Megaupload indictment, this motion assumes that encouraging the uploading of popular files and the deletion of unpopular files is proof positive of infringement -- but there are perfectly legitimate reasons for those features. It's fairly amazing to watch the MPAA interpret perfectly reasonable things like deleting files no longer being downloaded -- which plenty of legitimate file transfer services do -- as evidence of lawbreaking.

The MPAA then keeps pretending that if Hotfile isn't used for "personal storage", it must be used for infringement. But that's ridiculous. It's a service for distributing files -- nothing says those files are automatically infringing. That's the logical leap that the MPAA makes multiple times throughout the document.

Hotfile’s chiding of users on public forums puts to rest any suggestion that Hotfile based its business on personal storage: “To pay you just to upload? Why should we pay you then? … Why should we upload files that nobody wants to download? You may think your files are interest[ing] and most probably they are, but we must convince downloaders and convert them to premium users.”

I read this and I don't see the nefariousness. Nowhere do they encourage infringement. They encourage popular files. I know the MPAA would rather not believe it, but there are lots of content creators who no longer go through the gatekeepers, and they produce all sorts of popular content -- some of whom use services like Hotfile and Megaupload to profit from doing so. Why does the MPAA assume that encouraging legitimate activity is proof of contributory infringement?

Similarly, the MPAA jumps a over a clear logic gap by insisting that Hotfile support staff simply "knew" of infringement, because some people asked them how to download files that, according to the MPAA, were infringing. But from the examples given, it certainly sounds like the questions had little to do with the content, but merely the functionality of how you download. There's no indication there that Hotfile's support staff could have or should have known the content is infringing. Amazingly, the MPAA's "we're the center of the universe" attitude seems to assume that naturally anyone would recognize the name of some of its bad movies and immediately, magically know that it's infringing. But, based on what? That's not explained.

The MPAA's "smoking gun" of sorts is the fact that a study suggested a large percentage of downloads on the site were infringing, but I don't see how that, alone, is illegal. When the MPAA sued to kill the VCR, a large percentage of VCR usage was considered "infringing." But the market evolved. A large percentage alone isn't proof of anything, but the MPAA has to throw it out there.

Later, the MPAA goes so far as to pretend a part of the law that doesn't exist. They point out that Hotfile "failed to consider" filtering technology. I can see how that's frustrating to the MPAA, but the law here is pretty clear that there is no proactive duty to filter. So why would the MPAA even bring this up as a point?

There are redactions in the motion and perhaps the MPAA has some magic evidence -- but it's troubling that so many of these claims seem to have little connection to reality.

Also troubling, the motion tries to pin liability on the site's main developer because he programmed the software. That seems pretty crazy. Just because you make a tool, it shouldn't make you liable for how others misuse it.

The entire point of the motion (and the lawsuit) seems to be to prove that (1) Hotfile encourages users to use the site and (2) many users use it to infringe. For them to have a case they need to prove that Hotfile actively encourages infringement, but they can't actually do that, so they just keep trying to prove that Hotfile encourages usage (what site doesn't?!?) and then, entirely separately, that many users infringe... and completely and totally leave out the part where part (1) is connected to part (2). They just keep repeating part (1) and part (2) and saying See?!?!? See?!?!? as if there's a connection there... but which they fail to actually make. It's amazingly lacking in any direct connection.

In the end, one other thing strikes me about all of this. If the MPAA believes that it has such a slam dunk case here... why did it never sue Megaupload in federal court? Yes, Megaupload is based outside the US... but it has been sued in the US before and took part in the case. So why did the MPAA never actually sue Megaupload? If it believes this filing against Hotfile is such a slam dunk, surely we'd have heard about a similar case against Megaupload... and some details of how that effort was stifled. But that's not what's happened at all.

Filed Under: copyright, cyberlockers, infringement
Companies: hotfile, mpaa

Megaupload Users Plan To Sue... As Their Files & Data Are About To Be Destroyed

from the this-is-sounding-tragic dept

Soon after Megaupload was shut down, we heard from some lawyers for (legitimate) users of the service who were exploring whether or not they could sue the US government for taking away their access to the data. There was some uncertainty as to whether or not there was a real legal claim here, but now it appears that at least some of the users are, in fact, planning to sue the US government. Perhaps even more troubling, however, is the fact that all of the Megaupload data may be destroyed, potentially by the end of the week, because the data center that was hosting Megaupload's servers isn't getting paid any more. TorrentFreak has the news:

“We received a letter very late Friday from the US Attorney that declared there could be an imminent destruction of Megaupload consumer data files on this coming Thursday,” MegaUpload lawyer Ira Rothken told TorrentFreak.

Rothken explains that MegaUpload is determined to protect the interests of its users, but that its hands are tied without help from the authorities. The looming data loss is linked to unpaid bills at Cogent Communications and Carpathia Hosting where MegaUpload leased some of its servers.

I have to admit that I'm a little confused by this. I would assume that that data is evidence -- and, in fact, I'm a bit surprised that it wasn't seized directly as well. Either way, it seems like, as some of the evidence in the case, the Justice Department would forbid its destruction, but here it appears to be supporting of it. Even if you believe that Megaupload is pure evil, and had every intention to destroy the entertainment industry... can't people at least agree that it is then wrong to simply destroy the content of legitimate users, without (at least) giving them a chance to retrieve their data?

Filed Under: cyberlockers, doj
Companies: megaupload

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

from the and-again dept

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 2½ 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.

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

Megaupload Indictment Shows That Google Does Actively Police Against Its Ads Showing Near Infringement

from the oh-look-at-that... dept

One small point in the Megaupload indictment is worth calling out for reasons that have little to do with the case at hand. It seems that it's become vogue in Hollywood over the last couple of years to blame Google for everything. You see all sorts of stories claiming that Google is the main cause of "piracy" and conspiracy theories bizarrely claiming that Google was the main force behind stopping SOPA/PIPA because it "profits from piracy." There are tons of stories claiming that Google refuses to pull ads from sites that engage in widespread infringement. But... right there, smack dab in the middle of the Megaupload indictment is the fact that, pretty early on, Google dumped Megaupload because a review of the account found lots of infringing content:

On or about May 17, 2007, a representative from Google AdSense, an Internet advertising company, sent an e-mail to DOTCOM entitled "Google AdSense Account Status." In the e-mail, the representative stated that "[d]uring our most recent review of your site [Megaupload.com,]" Google AdSense specialists found "numerous pages" with links to, among other things, "copyrighted content," and therefore Google AdSense "will no longer be able to work with you."

Note that this in May of 2007... way before the widespread claims by Hollywood folks began saying that Google turned a blind eye to any infringement it found. Seems like this part of the indictment suggests otherwise.

Filed Under: ads, cyberlockers, infringement
Companies: google, megaupload

Megaupload Shutdown Means Other Companies Turning Off Useful Services

from the innovation? dept

On Friday, we noted some of the troubling parts of the Megaupload indictment, and how many perfectly legitimate companies did many of the same things that the US government used to suggest that Mega was a evil criminal conspiracy. On Saturday, the NY Times noted that plenty of legitimate companies were getting a bit nervous because of the language in the indictment:

But Megaupload was not the only such service on the Web. Many companies have crowded into the online storage market recently, most of them aimed at consumers and businesses that want convenient ways to get big data files out of their teeming in-boxes, off their devices and into the cloud — perhaps so that friends or co-workers can download them. They include MediaFire, RapidShare, YouSendIt, Dropbox and Box.net. And there are similar services from Amazon, Google and Microsoft.

All of these market themselves as legitimate ways to store content online. But they are inherently ideal for anyone looking to illegitimately upload and share copyrighted video and audio files. Most companies rarely, if ever, inspect individual files to see if the material they store on behalf of users violates copyrights, unless they are notified by someone claiming infringement.

And... by Sunday, reports started spreading of other companies that provide useful services to people who want to legitimately share files... shutting down or limiting those services. For example, FileSonic -- one of the most popular cyberlockers -- has basically killed itself by no longer allowing sharing, and only allowing personal backup. Another site, Uploaded.to, then blocked all access from the US. A bunch of other services, including FileServe and VideoBB have been killing their affiliate programs (again, which had been a good way for independent musicians to make money).

RIAA supporters are cheering this on -- believing that all of these services really focused on infringing content. But for the many, many artists, companies and individuals who used them legitimately, this is pretty troubling. Useful services are being shut down due to an overreaction on the part of the US government.

Again, this is exactly the kind of collateral damage that many of us were worried about. It's entirely possible (hell, perhaps probable) that the folks behind Megaupload went beyond the confines of the law. And, if that's true, I expect that they will lose in court. But many of us are quite worried about a few things: the fact that the entire site got completely shuttered despite substantial non-infringing uses... and that it's now creating massive chilling effects for legitimate and useful services within the US. Separately, as in the case of Uploaded.to, it's also splintering the internet, by having foreign companies put blocks on US internet users. These kinds of things were exactly what people have been warning about... and yet the US government ignored all those warnings (and probably still doesn't realize what it's kicked off here).

Filed Under: business models, cyberlockers, features, internet
Companies: fileserve, filesonic, megaupload, upload.to

Dan Bull Raps About How Megaupload Takedown Screws Indie Artists Like Him

from the helping-the-artists? dept

Independent musician Dan Bull, who we've written about a number of times, is one of many independent artists who used Megaupload on purpose, to distribute his own album. All of the links out there to download his album -- which he wanted -- point to Megaupload. And, unfortunately, they now all point to nowhere, because the US government used questionable reasoning to completely shutter the site. So Dan did what Dan does best... he wrote and recorded a song and video about it. Check it out below: My favorite line? "Make money giving away things for free? Ah! Why can't the majors do similarly?" It's a key point. As we explained on Friday, tons of artists have figured out that Megaupload and similar sites are a fantastic new business model, but they're a business model that the major labels hate... so they work double-time to make it look like some evil conspiracy. If anyone in the US government actually bothered to understand how music is distributed, marketed and monetized today, they would have realized that Megaupload isn't the problem -- it's one way to make things better for artists. But, as we know, the folks in the US government only get their information from the RIAA. So they end up making life much more difficult for indie artists by shutting down useful services for those artists. And, in the end, that is exactly what the RIAA wants.

Filed Under: cyberlockers, dan bull, independent artists, megaupload
Companies: megaupload

Busta Rhymes Backs Megaupload, Says Record Labels Are The Real Criminals

from the who's-hurting-who dept

Well, well. As we pointed out when the Megaupload shutdown happened yesterday, the company had recently named top producer (and husband to Alicia Keys) Swizz Beatz as CEO. Swizz knows tons of artists who respect him, and it seems that some of the biggest names in the business are pretty pissed off that the US government shut down Megaupload. First there's Diddy, who put out a couple tweets pledging support and telling him to never stop.

But what's a lot more interesting are the very direct statements from Busta Rhymes, who is clearly pissed off at the US government claiming that Megaupload is a criminal operation. Putting his tweets together, he states:

1st of all I am soooo proud of my brother @THEREALSWIZZZ 4 being apart of creating something (MEGAUPLOAD) that could create the most powerful way 4 artist 2 get 90% off of every dollar despite the music being downloaded 4 free...

With labels and companies doin' deals with Spotify and many other companies like it who doesn't give us shit continue 2 do what they do and blatantly show us how much they value the artist with doing deals of such disrespect and lack of value 4 our content...

I am proud 2 stand next 2 my brother @THEREALSWIZZZ and fight the good fight...Our freedom is truly being fucked with in a very significant way and I strongly suggest 2 all artist especially the 1's Swizz repped 4 comes out & reps 4 him!!!

Fuck that I say it again...I'M PROUD OF MY BROTHER @THEREALSWIZZZ #GREATMIND!!

You can see the tweets here (full version), here (full version), here (full version) and here.

There's a key point in all of this that we missed in our earlier analysis about paid accounts at Megaupload. In the indictment, the government seems to assume that paid accounts are clearly all about illegal infringing works. But that's not always the case. In fact, plenty of big name artists -- especially in the hip hop world -- use the paid accounts to make themselves money. This is how they release tracks. You sign up for a paid account from services like Megaupload, which pay you if you get a ton of downloads. For big name artists, that's easy: of course you get a ton of downloads. So it's a great business model for artists: they get paid and their fans get music for free. Everyone wins. Oh... except for the old gatekeeper labels.

In fact, this is part of the ecosystem, especially in the hip hop world. It's why the artists also support those hip hop blogs that the RIAA insists are dens of pure thievery. The artists release their tracks to those blogs, knowing they'll get tons of downloads -- and actually get money. If they do deals with labels, they know they'll never see a dime. Putting music on Megaupload is a way to get paid. Working with a gatekeeper is not.

And yet... Megaupload is the criminal operation? Seems like the actual artists know otherwise.

What Busta is pointing out is that services like Megaupload -- while it may be run by some sketchy individuals and probably crossed the legal line in some cases -- are actually a great new business model for artists, while also being the future of distribution. It's a great way to distribute, make money, and let fans get the works for free. And that's why the major labels are so freaked out by cyberlockers. It's not because there's so much infringement on there, but because it's a system whereby artists can get paid and can better distribute their own works to fans... without signing an indentured servitude contract with a label, which never pays any royalties.

Did Megaupload break the law? Perhaps. But it seems clear that the real fear on the part of the RIAA and the major labels is not so much about that. It's the recognition that such a distribution and payment system undermines much of their reason for existing, and takes away their ability to control artists. A smart label would learn to embrace these things. But we're talking about the major labels here, and so instead, they run to the US government -- who clearly knows nothing about the way modern artists monetize and distribute music -- and lets them try to paint a picture of just how "evil" services like Megaupload are.

But the artists know better.

Filed Under: business models, busta rhymes, cyberlockers, diddy, disruption
Companies: megaupload, riaa, universal music

DOJ Gives Its Opinion On SOPA By Unilaterally Shutting Down 'Foreign Rogue Site' Megaupload... Without SOPA/PIPA

from the screw-you-all----we're-the-doj dept

If you've been paying attention to the MPAA/US Chamber of Commerce/RIAA claims about why they need PIPA/SOPA, a key argument is that they need it to go after these "foreign rogue sites" that cannot be reached under existing US law. Among the most prominent sites often talked about is Megaupload -- which accounts for a huge percentage of the "rogue site traffic" that the US Chamber of Commerce and other bill supporters love to cite. However, it certainly appears that the US Justice Department and ICE don't think they need any new law to go after people in foreign countries over claims of criminal copyright infringement. As lots of folks are currently digesting, the Justice Department, along with ICE, have shut down the site and arrested many of the principles (with the help of New Zealand law enforcement) and charged them with massive amounts of criminal copyright infringement.

Of course, just last week, we had noted that Megaupload was immune from SOPA/PIPA because it doesn't apply to dot coms -- but this is still interesting and crazy for a whole variety of reasons:

• ICE and DOJ have a pretty freaking dreadful record so far in bringing these kinds of cases for online copyright infringement. It's kind of amazing that they did this so soon after they totally screwed up and had to give back Dajaz1 (without an apology, by the way). Megaupload may be a different type of site... but, still...
• Similar cyberlockers, like RapidShare, have already been declared legal in both Europe and the US. I don't know the details of Megaupload's situation -- and certainly its founder has a... um... colorful history... but it seems pretty extreme to totally shut down the site prior to any adversarial hearing.
• In the last few days and months, Megaupload had announced plans to help artists make more money... and had announced that very successful and famous music producer Swizz Beatz had become CEO of Megaupload. Beatz is also married to recording superstar Alicia Keys and was responsible for getting all those RIAA artists to endorse Megaupload. All indications were that the company was clearly building a legitimate system for artists to make money and fans to get content. And it seemed that many artists clearly supported the site.
• So why do we need SOPA/PIPA again? It seems like the DOJ/ICE just undermined the key argument of the MPAA/RIAA/US CoC for why they need these laws. After all, Megaupload was one of the key examples used for why the law was needed.
• At the same time there are huge questions about why the government is involved here. Megaupload is currently engaged in a lawsuit in the US -- and contrary to claims of SOPA/PIPA supporters, the company seemed more than willing to appear in court to deal with civil copyright claims. Why leap to criminal claims?
• Is this really the message the US DOJ and White House want to be giving the day after mass, widespread protests happened concerning a fear that this new law would be used to take down websites? Honestly, this is a big "fuck you" to the protestors, showing that the government already has this power thanks to the last law they passed: ProIP (which they promised they'd never abuse).
• The indictment itself -- embedded below -- is so full of hyperbole ("Mega Conspiracy") it sounds like it was written by the entertainment industry itself...

Anyway, I'm sure we'll have much more to say about all of this... but wow is the timing dumb on the government's part. Not only does it undermine the argument for PIPA/SOPA, but it raises significant questions about whether or not the feds already have too much censorship power.

Filed Under: copyright, criminal copyright, cyberlockers, doj, fbi, foreign rogue sites, ice, indictment, kim dotcom, pipa, protect ip, seiruzes, sopa, swizz beatz
Companies: megaupload

A Bunch Of RIAA Label Artists Endorse MegaUpload... As RIAA Insists It's A 'Rogue' Site

from the how's-that-working-out-for-you? dept

Supporters of PROTECT IP and SOPA are continuing to insist that they need to take down these horrible "rogue sites" to protect the artists, who they insist are being robbed blind by the sites. The US Chamber of Commerce keeps trotting out stats about how much traffic these sites get. Yet, as we noted recently, a huge percentage of the traffic that bill supporters keep insisting is "rogue" is from the sites MegaUpload and MegaVideo. So, it seems noteworthy, as TorrentFreak has revealed, that a large group of the biggest RIAA music stars have all performed on a song/video endorsing MegaUpload and how useful it is: Among the stars taking part: P Diddy, Will.i.am, Alicia Keys, Kanye West, Snoop Dogg, Chris Brown, The Game, Mary J Blige , Kim Kardashian, Floyd Mayweather and Jamie Foxx.

“When I got to send files across the globe, I use Megaupload,” declares Will.i.am, an artist signed to labels owned by RIAA-members Warner and Universal.

“When I’m sending my hits out I use Megaupload, ‘cos it’s fast. I can receive hits and I can send ‘em out,” declares P Diddy, an artist signed to Interscope, a label owned by Universal.

Kanye West, signed to Universal-owned Def Jam, likes to use Megaupload “…because it’s the fastest and safest way to send files – period.”

Alicia Keys, who is signed to Sony-owned RCA, says she uses Megaupload “….because I know that I can get my music safely and quickly -and you know that I’m serious about my music.”

Snoop Dogg, signed to EMI-owned Priority, uses it “…because it keeps the kids off the street,” and The Game (Universal) says that even his lawyers know he uses it, “…and I got plenty of them.”

And yet the RIAA, the MPAA and the US Chamber of Commerce are still insisting that MegaUpload is "rogue" and must be shut down? How's that work now?

TorrentFreak's article also reveals some other info about MegaUpload's plans -- some of which may be pretty controversial in other areas. For example, they want to get people to use a product called Megakey, which basically gives them access to "premium" services for free... but in exchange for having ads you see on other sites replaced by ads sourced from Mega. That's a lawsuit of a different nature waiting to happen. Replacing ads on other sites has resulted in lawsuits in the past. The details of how that actually work would be interesting, but I don't see how it doesn't end up tied up in court at some point.

Filed Under: cyberlockers, diddy, kanye west, pipa, protect ip, rogue sites, sopa, will.i.am
Companies: megaupload, riaa

House Version Of PROTECT IP To Cover Cyberlockers Too

from the of-course-it-will dept

It's been rumored for a while, but there's growing evidence that the long-delayed House version of the PROTECT IP Act will include provisions for attacking cyberlockers. For whatever reason, the MPAA (in particular) has had an infatuation with cyberlockers as the next big "evil," so this is hardly a surprise. Of course, there's a big problem here: cyberlockers are nothing but online storage, and they have tons of legitimate uses as well. It's difficult to see how any legislation can be crafted that won't have massive unintended consequences and liabilities for all sorts of perfectly legitimate online storage providers. How do you distinguish things like Dropbox or Box.net from one of the cyberlockers that the MPAA loves to hate, such as Hotfile? And as cloud storage continues to grow, the issue only gets worse. How about Amazon.com's S3 offerings? In some ways that's a cyberlocker as well. The fact is that the MPAA is playing a silly and pointless game of whac-a-mole. All this new effort will serve to do is piss people off. It won't lead to any more purchases, but will make it clear that the MPAA has no problem trampling innovation when it can't figure out how to use it properly. Cyberlockers have perfectly legitimate purposes -- as did VCRs before them... but the MPAA tried to kill that, and is now seeking to do the same for lots of other services, just because the MPAA can't comprehend how they're useful.

Filed Under: cyberlockers, protect ip