Anti-Piracy Enforcer Degban Publishes Some Info-less Graphics Stating Atlanta Is File Sharingest Place On Earth

from the lies,-damned-lies-and-whatever-the-hell-this-is dept

Degban, the anti-piracy company that once took down comedian Dave Gorman's Flickr account because it thought photos of distinctive typography were actually its client's porn (and then blamed it on being hacked), has put together some very interesting (that's a colloquialism for "??!?") piracy numbers at its site.

Degban's "State of Piracy" page introduces itself with some rather ominous wording about piracy and the importance (and difficulty) of compiling accurate numbers.

When it comes to statistical data regarding content piracy, the complexity of the data and its abundance is utterly mind boggling. The data channels are scattered across geographical borders and scientific dimensions. The nature of the matter effects the data gathering process, resulting in datasets with chaotic orders and unclean results sets.

It is of grave importance, regardless of the challenge, to understand the trends and fashions behind content piracy as a thriving organism . Furthermore, appreciation of statical [sic] data regarding content piracy can be advantageous from a business intelligence point of view.

And some very fine "statical" data it is. The first chart posted is of the pie variety, breaking down the "market share" of several file storage lockers. Most of the contenders hover somewhere between 4-6% of the "market," possibly giving some credence to the MPAA's claims that Megaupload made the Internet go 'round by driving 99% of the traffic that wasn't Netflix (heavily paraphrased).

The data Degban has collected also shows the US firmly holding the lead in terms of "Origins of Pirate Peers." (USA! USA! USA!) How this number (185,290) is derived remains a mystery, but whatever it is, it's nearly nine times as much as Russia (28,001). So... who's doing all this piracy? Atlantans, apparently.


As can be seen by this chart, Atlanta is more than twice as piratey as Tacoma (?!?), the second place pirate haven, in terms of numbers lying along a Y-axis. Again, no further information is provided as to what these numbers represent, but we can certainly assume that Atlanta is the problem and Tacoma isn't helping. Once we venture beyond these two homegrown pirate bays, we see pirating is a major issue in such metropolises as Chalfont, PA and Iselin, NJ. Other cities/villages/unincorporated townships appear on the list as well, leading to questions of "Where is that, exactly?" and "Didn't that one guy used to live there... the serial killer/general store proprietor?" Cities with large populations -- New York and LA -- are pretty far down the list, which might make a lesser anti-piracy company question the quality of its data.

Degban really drives home the "Atlantans heart pirating" point with its next info-less graphic.


From this graphic portrayal of the United States battling a post-adolescent breakout of Venn diagram remnants, we can only draw one conclusion: if piracy is to be stopped, Atlanta has got to go. No more DMCA requests. No more lousy legislation. No more half-assed, self-serving infographics. You kill something by cutting off its head. The MPAA will be able to return millions of bag boys to their copyright-protected jobs just as soon as someone detaches Atlanta from the internet. And, from what I can tell of the map above, at that point, nearly all piracy will have gone away. If only Degban had made this clear earlier, we could have done away with all these lawsuits and focused in on the real piracy cancer: Atlanta.

Now, the numbers contributing to these SHOCKING bar graphs might possibly be found in this detailed, interactive (click over to Degban's site to experience this in all its glory) Google Map, which pinpoints where these "peers" are located, as well as the number of peers operating at each inverted teardrop.


Yes. There are some numbers in there, alright. Some low numbers. In fact, it's tough to find any location with more than 5 "peers." How these scattered points add up to over 10,000 pirating Atlantans is beyond me, especially considering Atlanta itself has no data point at all. None. Zip. Zero. Clearly, Degban processes data in a far advanced way, in which "0" peers means, "more than double the piracy impact of Tacoma, in which Tacoma is the number two piracy center."


You may also want to check out the dates on this map. It looks like the last data harvest was back in the spring of 2010. "OLD NEWS!!!" I hear you yell like a bunch of irate Digg members Redditors. But, how can that be? "Data is important," Degban tells us in the intro, along with this:

This section is regularly and automatically kept up to date.

From the looks of it, "regularly" means "once per decade." And "automatically" means "please delete this word from this sentence before publishing this page."

So, we have a bunch of numbers that don't add up, aren't current and do little more than randomly drop circles on maps and rub bars affectionately up against sky-high Y-axises. And yet, Degban is a well-known name in the piracy world, one that understands the "grave importance" of accurate and up-to-date statistics. To fight your enemy successfully, you must know them, and from what I'm seeing here, Degban is nearly 100% sure someone's pirating stuff somewhere.

Godspeed, number wranglers! Remind me to keep one hand on my content when passing through the muggy climes of Hotlanta or the suicidal murkiness of upstate Washington! And tell Vkontakte.ru that everyone's extremely disappointed in its lack of effort on the file sharing front.

Filed Under: atlanta, data, file sharing, research
Companies: degban

Court Tosses Lawsuit That Said MMS Was An Illegal File Sharing Network

from the let-it-go dept

A few years ago, we wrote about a really ridiculous lawsuit filed by (then) regular Techdirt commenter Max Davis against all of the mobile operators: AT&T, Verizon Wireless, Sprint and T-Mobile. Davis runs a company, called Luvdarts, that creates silly "content" for multimedia messaging (MMS) on phones, and also had big dreams of setting up some sort of collective licensing system by which the telcos would all pay him a fee for every MMS sent. When the telcos showed no interest in such a pointless plan, he sued, arguing that they were just like file sharing networks, because users were able to "forward" the MMS content his company created without any problem. Two years ago, that case was dismissed, with the court being pretty clear that it had no chance. Davis actually sent over a press release about his own loss, talking about how happy he was with this result and that he was going to appeal.

That appeal has happened and... second verse, same as the first. The appeals court made short work of this lawsuit, dismissing it in a quick and clean 10 page opinion. To say the court was not impressed would be an understatement. The court repeatedly points out that Luvdarts appears to be pushing completely novel legal interpretations of vicarious and contributory infringement with no basis whatsoever. Basically, the company insists, first, that individuals passing along MMS messages makes the operators liable. That was quickly tossed out because of protections against secondary liability.

Luvdarts's principal argument is that the Carriers are liable for the infringement committed by third parties over their networks under either vicarious or contributory copyright liability. As the Supreme Court has observed, the Copyright Act does not explicitly render a third person liable for another person's infringement.

Luvdarts argued that the operators failure to implement a system to block such forwards proves liability, and the court points out that this is ridiculous.

In this case, Luvdarts concedes that the Carriers presently have no way of supervising the use of their networks for copyright infringement. Instead, Luvdarts's complaint alleges only that the Carriers could “establish[]. . .a system” that would give them the right and ability to supervise the infringing activity. Luvdarts argues that this allegation is sufficient to survive a motion to dismiss. Luvdarts fails to cite any authority to support this proposition, which runs contrary to our precedent. In Napster, this court held that “right and ability to supervise” should be evaluated in the context of a system’s “current architecture.” Napster Inc., 239 F.3d at 1024. Moreover, as we noted in Perfect 10, Inc. v. Amazon.com, Inc., resting vicarious liability on the Carriers’ failure to change their behavior would tend to blur the distinction between contributory liability and vicarious liability. 508 F.3d 1146, 1175 (9th Cir. 2007) (“[I]n general, contributory liability is based on the defendant’s failure to stop its own actions which facilitate third-party infringement, while vicarious liability is based on the defendant’s failure to cause a third party to stop its directly infringing activities.”). For example, under contributory liability the Carriers’ failure to implement a digital rights management system may be used as circumstantial evidence of “the object of promoting” infringement. See Grokster, 545 U.S. at 936–37. But under vicarious liability, it cannot substitute for an allegation of a capacity to supervise. Luvdarts's failure to allege that the Carriers have at least something like a capacity to supervise is fatal to a claim of vicarious liability.

On top of that, Luvdarts tried to claim contributory (not vicarious) infringement, arguing that these MMS systems were similar to Napster, Grokster or Limewire. In part, this is because Luvdarts sent the telcos a list of every bit of "content" they offer, and demanded they be blocked from being forwarded. Again, the courts don't see it (because there's nothing to see):

Luvdarts fails to allege that the Carriers had the requisite specific knowledge of infringement. Luvdarts's conclusory allegations that the Carriers had the required knowledge of infringement are plainly insufficient. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (“Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.”).

In the alternative, Luvdarts argues that the “notices” it sent to the Carriers, referenced in the complaint, sufficed to establish actual knowledge of infringement. However, these notices failed to notify the Carriers of any meaningful fact. The notices were 150-page-long lists of titles, apparently just a transcription of every title copyrighted by Luvdarts, which indicated that they wanted “accountability” for the unauthorized distribution of those titles for the period from May 2008 to November 2009. These notices do not identify which of these titles were infringed, who infringed them, or when the infringement occurred. The Digital Millennium Copyright Act of 1998 (“DMCA”), by which the notices purport to be governed, clearly precludes notices as vague as the notices here. 17 U.S.C. § 512 (DCMA takedown notice requires the producer to provide “[i]dentification of the material that is claimed to be infringing or to be the subject of infringing activity and that is to be removed or access to which is to be disabled, and information reasonably sufficient

This is yet another useful ruling in that it highlights that service providers need to have specific knowledge of infringement, and that "general knowledge" is clearly not enough.

Of course, I believe this is only one of two such lawsuits filed by Luvdarts against the same basic companies. In the other one, they seem to be claiming that there's some sort of antitrust violation in that these MMS providers haven't implemented the filters that this lawsuit says they're not required to implement. I can't imagine that one going very far either.

Filed Under: contributory infringement, copyright, file sharing, max davis, mms, vicarious infringement
Companies: at&t, sprint, t-mobile, verizon wireless

A Tale Of Two Studies: Can File Sharing Both Harm And Help Sales?

from the why,-yes dept

In part one of this series, we looked at a study that suggested that file sharing (mainly via Megaupload) likely harmed the sale and rental of digital movies. In part two, we looked at a study that suggested that file sharing of music (across many sites) likely helped the sale of digital music. So is one right and the other one wrong? Not necessarily. It's possible both are correct. Unlike some other studies we've seen, the methodologies used by both studies appear to be fundamentally sound, without any obvious problems. As with just about any study, both studies correctly note that there is the possibility of unknown or unexplained variables impacting the data. However, both run through a series of tests to try to eliminate a number of possible outside variables, and both come out with results that suggest their initial arguments are robust.

So, let's try to look at why the two studies might both be right -- and what that might actually mean. First off, there's the obvious difference: the first study was about movies, and the second study was about music. While there are obvious similarities between the two, there are also significant differences, which may also lead to differences in consumption. Movies, for example, tend to involve more initial commitment, since it takes a lot more time to watch a movie. Music can be consumed much more easily. But, for music that people like, they're much more likely to listen to it over and over again, whereas most people will view a movie only once. Even for movies that people absolutely love, they're likely to consume it many fewer times than corresponding music that people love. And, on top of that, movies come together as a whole package. Music, for the past few decades, was packaged as a bundle of songs, in the form of an album. However, the rise of digital distribution for music has often broken apart that bundle, such that people focus on the single unit of the song, rather than the album.

In those differences are the seeds of why these two studies could both make sense. The recording industry, obviously, points to the massive decline in overall revenue from recorded music sales. That is indisputable. But, much of that can be explained by the breakup of the album into single song sales. When you're no longer forced to purchase 10 songs you don't care about just to get to the 2 you do, it shouldn't be any surprise that overall sales revenue may decrease. At the same time, because people can then spread their interest across more artists, something like file sharing can still increase digital distribution sales, because they sample via unauthorized sites, and then purchase a few songs from those they like best. The file sharing acts as a way to figure out where they want to spend their money, but because they can spend less to get more, overall sales dropped off. The market is much more efficient.

Movies, on the other hand, are somewhat different. There isn't a great unbundling happening there. And, often, consuming movies is done for a different reason and in a different manner than consuming music. Watching a movie is a way to "kill" an evening. Need something to do? "Let's watch a movie." As such, you'd expect movie watching behavior to remain more consistent, as people have the same "void" to fill at a regular interval. And, while alternatives (such as surfing the internet or playing video games) may fill that void, some percentage of the people will prefer movies -- and if one source of movies goes away, they will look for others, and some percentage of those are likely to switch to a pay service.

There's one other factor that may impact all of this as well, as hinted at in the post about the first study: the level of development of legal services. For years, we've seen one thing that is almost certainly true: when there are no legal services available, the amount of unauthorized use increases. Unauthorized use is almost always an indicator of an under-served audience. And, if you look the development of online music and movie offerings, authorized music services tend to be a lot further along in creating compelling, user-friendly offerings that people find to be "better than piracy." There are some movie services that are getting there, but movie services are more likely to be encumbered with DRM and annoying restrictions (e.g. "watch the whole thing in 24 hours or you lose it!").

If anything, this final point is the most compelling explanation to me for the different results in the two studies -- and why I'm less confident that the results of the first study will hold up in the long term, unless Hollywood finally allows the creation of more user-friendly online movie services (i.e., lower prices and less restrictions, which is where the music services have all gone). In the music world, more and more people are making the gradual shift to authorized services, because they really do provide a good overall experience. The file sharing that goes on tends to be complementary to all of this because it is one way that people can further sample and figure out what they like, which they can then support within an authorized context (especially since music people like is played repeatedly).

With movies, on the other hand, you have less of a need to "sample," since the product is often watched just once. And there, convenience becomes king. People will flock to the most convenient offering (convenience being a combination of a variety of factors, which may differ per each individual, but generally include elements of ease of use, pricing, overall selection of movies, ability to view in multiple places, ability to watch at different times, etc.) For many, Megaupload represented the most convenient offering, and after that went away, other services, sometimes pay services, represented the "next best option." But, those other services are still at risk of newer more convenient services re-emerging and taking back those movie-watchers.

In those cases, both studies "make sense," but the lessons they suggest may be somewhat different than the lessons put forth by the supporters of the studies. The authors and supporters of the MPAA study suggest that this proves that shutting down unauthorized sites is a reasonable goal. I think that may be looking too narrowly at the results, and discounting how much people are focused on the "most convenient" solution. An even better solution is to provide more convenient offerings, which would win over customers from unauthorized sites even if they aren't taken down.

Finally, I wanted to respond to the IFPI, which appeared to completely freak out about the European Commission study, claiming it was flawed:

IFPI believes the JRC study is flawed and misleading. The findings seem disconnected from commercial reality, are based on a limited view of the market and are contradicted by a large volume of alternative third party research that confirms the negative impact of piracy on the legitimate music business.

The IFPI seems to be responding based on emotion, rather than fact, and possibly a misunderstanding of the data. The data directly supports the commercial reality, which is that digital music sales have been regularly increasing, which the IFPI itself records quite clearly. The decrease in overall recording industry revenue (the IFPI is misleading in talking about "the legitimate music business" because they really only mean the portion that is recorded music sales), comes from the decline in the sale of physical music: CDs. And the study only looked directly at digital distribution, not the impact on CD sales. The other studies that the IFPI refer to look at the connection between file sharing and CD sales, showing a general decline there, but much of that may just be from people shifting from physical (inefficient and wasteful) distribution to digital (efficient) distribution, in which case you'd expect a decline in overall sales, not because of "piracy" but because of less inefficient bundling and physical manufacturing and distribution costs.

The IFPI also repeats the BPI's misreading of the "Kantar Worldpanel" data. That is, they highlight that many people who fileshare don't buy anything, but then leave out the people who neither fileshare nor buy any music, thus setting up an apples and oranges comparison. They also cite the debunked HADOPI study, despite the fact that reports have already explained how the impact observed in that study likely had more to do with the introduction of new iPhones rather than HADOPI's three strikes policies.

But, really, the most ridiculous argument in the IFPI response is at the end:

The fundamental problem of the music market place remains as true as ever: why pay for music when you can get it illegally free?

The fact that they still believe this to be true is the real problem with the legacy industry in one simple sentence. They still think the only way to compete is on price. That's clearly not true, as seen by the IFPI's own data, which consistently shows that massive numbers of people buy all the time, even when they can get it quite easily for free from unauthorized sources. As noted above, it's really about convenience -- which is a result of a combination of factors, of which price is merely one. Creating more authorized services that provide greater convenience than unauthorized sites is the most effective way to fight back. If the IFPI actually focused on providing more value, rather than freaking out every time piracy was detected, we'd be talking about what an amazing time it was for music today, rather than having this same silly debate all over again.

In the end, despite the IFPI's whining, these two studies do add valuable data to the debate. And while they may appear to conflict, I don't think they really do. The results both make sense in context, and viewed from a wider angle they suggest, still, that the best way to respond to unauthorized file sharing is to make authorized service more convenient.

Filed Under: file sharing, innovation, movies, music, studies

A Tale Of Two Studies: File Sharing Helps Sales!

from the the-other-side-of-the-coin dept

In the first part of this three part series, we talked about some research that suggested that the shutdown of Megaupload directly resulted in an increase in the sale and rental of digital movies. The study's authors used that to suggest that this proves that unauthorized download sites displace actual sales, and that there is likely a positive economic impact on copyright holders when properties like Megaupload are shutdown. However, as noted, another study that came out just after that one seemed to suggest something very different.

The second study, put out by the European Council, also is rather compelling, but argues something almost entirely contradictory: that there is no sign that infringement leads to a decrease in sales. In fact, it shows a very slight increase in sales. The researchers here were looking at a different market, however. They looked at digital music, and the impact of infringing downloads on authorized streams and downloads. The research found little impact:

Our results suggest that Internet users do not view illegal downloading as a substitute to legal digital music. Although positive and significant, our estimated elasticities are essentially zero: a 10% increase in clicks on illegal downloading websites leads to a 0.2% increase in clicks on legal purchases websites. Online music streaming services are found to have a somewhat larger (but still small) effect on the purchases of digital sound recordings, suggesting complementarities between these two modes of music consumption. According to our results, a 10% increase in clicks on legal streaming websites lead to up to a 0.7% increase in clicks on legal digital purchases websites. We find important cross country differences in these effects.

Going a bit further, they note:

Perhaps surprisingly, our results present no evidence of digital music sales displacement. While we find important cross country differences in the effects of downloading on music purchases, our findings suggest a rather small complementarity between these two music consumption channels. It seems that the majority of the music that is consumed illegally by the individuals in our sample would not have been purchased if illegal downloading websites were not available to them. The complementarity effect of online streaming is found to be somewhat larger, suggesting a stimulating effect of this activity on the sales of digital music.

Taken at face value, our findings indicate that digital music piracy does not displace legal music purchases in digital format. This means that although there is trespassing of private property rights (copyrights), there is unlikely to be much harm done on digital music revenues.

There are some significant similarities between the two different studies. Both go through the previous research into this issue and tend to cite almost all of the same papers (which is a good sign) to show what's been done before, and what the limitations are of that research. Both also focus on the question of online impact. That is, previous research has tended to focus on the impact on other modes of consumption: i.e., does downloading increase or decrease DVD purchasing, CD purchasing or movie theater sales. Both of these reports, however, look strictly at unauthorized downloading/streaming as compared to authorized downloading/streaming.

The specific methodologies differ somewhat, however. The MPAA paper compares overall sales/rentals vs. Megaupload penetration. The EC paper looks at direct clickstream traffic data as provided by Nielsen NetView, which collects direct data on exactly what sites people visit. The EC researchers, Luis Agular and Bertin Martens, then classified visits to different "music consumption" sites to see if they could isolate some sort of relationship between unauthorized streams and downloads and authorized ones. As with the MPAA study, there are some potential limitations there (mainly in sussing out the details of what people are actually doing on any particular page -- especially when some pages, such as Amazon.com, could result in other activity that is not music related), but the researchers do a good job trying to control for these limitations.

Also, it's good to see that in some cases the underlying data between the two studies agrees. Both, for example, show much greater usage of sites that have many unauthorized uses in Spain, for example. Unfortunately, other than Spain, France and Germany, the selection countries studied in the two reports is mostly different, so it's difficult to confirm other points between the two.

The EC study confirms another point that should be settled by now: those who use unauthorized sites are the biggest fans, by far.

The figures show that legal consumers (individuals that never clicked on an illegal music website during 2011) are, on average, active 2.5 months a year, while downloaders are active almost 6 months a year. Most interestingly, downloaders are also more active than legals both in terms of legal downloading (10% more clicks) and legal streaming (40% more clicks), as shown by their mean values of clicks. A positive relationship between legal and illegal consumption of digital music therefore emerges from this simple comparison of means. Comparing streamers and non- streamers (individuals that never clicked on a streaming music website during 2011) leads to similar conclusions. The figures show that streamers click more than twice as much on legal downloading websites, while their clicks on illegal downloading websites is 90% higher than for non-streamers. Again, this simple comparison of means shows a positive relationship between the different consumption channels and in particular between streaming and legal purchases.

Of course, as many will (rightfully) point out, this is just correlation data, which is useful, but not enough to prove any causal relationship. So the researchers go further. They use a number of variables try to separate out which users are most interested in music itself, by looking at whether they visit other music-related websites, such as music lyrics or music news sites, as well as other types of "music consumption" sites like video websites. Again, the data suggests a clear causal relationship.

Our results suggest that illegal downloading and legal streaming have both a positive and significant effect on legal purchases of digital music.

As you can see in the report, they continue to slice and dice the data a few different ways to test for other potential variables that might be creating this situation, and each time they fail to find any evidence of it. Instead, they see the same thing: engaging in unauthorized downloading appears to lead to more digital purchases, and the same for authorized streaming.

In the third piece in this series, we'll see if we can reconcile what appear to be very different findings in these two studies, as well as respond to the entertainment industry's freak out about this second study.

Filed Under: european commission, file sharing, increased sales, music, sales, studies

A Tale Of Two Studies: File Sharing Hurts Sales!

from the fun-with-data dept

Over the last couple of weeks, we've seen a bunch of folks on all sides of the debates about file sharing point us to two studies that have come out, one of which supporters of greater copyright enforcement insist prove their point, and another which seems to show (yet again) that file sharing has little impact on buying habits. I wanted to take the time to look through both studies before writing about them, and since they came out so close together, we might as well do one post looking at both. As I started to write up a single post about it all, it got really, really long. So I'm breaking it into three separate posts. One about the first study, which argues that file sharing hurts sales, one that looks at the second study, which argues that file sharing does not hurt sales (and may actually increase sales), and then a third post, which tries to reconcile the findings of the two studies, while also responding to some of the criticism.

The first study is called Gone in 60 Seconds: The Impact of the Megaupload Shutdown on Movie Sales and is by Brett Danaher and Michael Smith. Smith, especially, has a long history of producing reports that copyright maximalists love. For example, both he and Danaher were responsible for a study last year claiming that the Hadopi 3 strikes program had increased iTunes sales. Unfortunately, a quick review of that report raised serious questions about the basis for those claims, as an alternative hypothesis (related to the sale of new iPhones) showed much more compelling data. I see his name on a lot of research sent around by the maximalists. It's worth noting, as well, that the study was effectively funded by the MPAA, since it was a project of a program run by Smith and funded by the MPAA. Oddly, the paper fails to disclose this tidbit.

This new study seeks to answer a question we've been asking over and over again: do any of these enforcement efforts actually increase sales? There has been evidence that greater enforcement has a small, but temporary, impact on decreasing infringement, but there was not that much data concerning actual sales. In fact, we've pointed to data (contradicting Smith's other report) that suggested Hadopi had done little, if anything, to increase sales. However, the data here has been limited, in part because there are so many other variables at play, so it's difficult to separate out the actual impact. Smith and Danaher try to use data from various studios to look at the impact on movie sales following the Megaupload shutdown.

To try to determine the impact of the shutdown of Megaupload, Danaher and Smith basically compare movie sales before and after the shutdown date in a few different countries that had very different Megaupload usage. For example, they (using Google Adwords data) suggest that Megaupload had 2% penetration in the US, but 17% in Spain. Then they look at what the impact was in terms of digital movie sales and rentals compared across the different countries, and whether or not there were more sales in countries that had more Megaupload usage. They use this to argue that the key difference is Megaupload usage. The end result is that countries that had more Megaupload penetration saw a greater increase in digital movie sales and rentals following the shutdown than the countries that had lower Megaupload penetration. As they note:

This difference is both statistically and economically significant. Our findings indicate that digital movie revenues for two studios were 6-10% higher over the 18 weeks following the shutdown (across 12 countries) than they would have been if not for the shutdown.

This chart highlights the basics: As you can see, the countries that had higher Megaupload penetration (Mexico, Belgium, France and Spain) all also showed distinctly more sales relative to the other countries, which had relatively lower Megaupload penetration. There's a similar chart for rental data as well, in which you see a similar pattern, though not nearly as strong a correlation.

While I've seen some criticism online of these findings, I actually think the basic research and methodology is fairly solid. Those who have jumped up and said "correlation is not causation" are ignoring the various methods that the researchers used to isolate the shutdown. However, I'm not sure that the conclusions are quite as meaningful as some have suggested. First off, we've seen very similar data when it came to decreases in file sharing after enforcement increases -- but the impact has always been shown to be temporary, until people settle in on a new method for infringement. It would make sense that some users of such a service, who don't want to go hunting for a new free option, will switch to an authorized service if it's available. But if they become aware of other services, they might also switch back. The amount of time the impact lasts will be a key thing to watch.

Of course, the other key thing that is left out of the picture in this study is the role of authorized services in all of this. Part of the reason for the growth of infringement on Megaupload in the first place was the dearth of compelling, simple, non-annoying, authorized services. The industry has, finally, been trying to increase those, and so it could be that people who couldn't find any legit services before looked around again after the shutdown and found newer, better services. While the authors of the report say the findings suggest that Megaupload usage decreases sales, a possible alternative explanation would be that the slow pace with which the industry rolled out authorized services was equally, if not more, responsible. Either way, this report is a useful contribution in understanding the impact.

In our next post, we'll explore the second study that came out even more recently, which appears to come to a very different conclusion.

Filed Under: brett danaher, copyright enforcement, file sharing, michael smith, sales, studies
Companies: megaupload

Swedish BitTorrent User Accused Of Sharing Beyonce Album, Hit By $233,000 Lawsuit From Sony

from the that's-justice? dept

Lots of news regarding file-sharing has come out of Sweden over the years, but as TorrentFreak points out, until now, there's never been a prosecution for alleged unauthorized sharing using BitTorrent. The current case is unusual in a number of other respects:

The claim is that on June 8, 2011 a man from Gothenburg shared Beyonce's album '4' in advance of its June 24 commercial release date. The case was made even more interesting following the revelation that the 47-year-old is a music industry worker.

Because the album in question was a pre-release version, the Swedish prosecutor says he believes a heavy punishment could be handed down. As if that weren't enough, the label concerned -- Sony Music Entertainment -- has said that it intends to seek damages in a civil case:

In a submission to the Gothenburg District Court, Sony said that its business has been negatively affected by the leak on a number of fronts. The label says it has suffered damage to its marketing strategy, sales revenues and has also incurred additional costs. Sony adds that its relationship with Beyonce has been damaged and the artist's reputation hurt.

For all of the above Sony say they will claim 1.5 million kronor from the man, which is roughly $233,000.

But as various studies have suggested, rather than hurting Sony, it's just as likely that this leak helped make the official launch even more successful than it would have been. Similarly, it's hard to see how Beyonce's reputation was hurt by such a leak, since the more passionate the fan, the more pleased they would be by obtaining early access.

Anyway, the figure of $233,000 seems plucked out of the air, as is so often the case in this evidence-free area. Or perhaps it was inspired by the most famous damages imposed for unauthorized sharing of music, those against Jammie Thomas, who was fined $222,000 in her first trial (which then went up to $1,920,000 in the second trial, and to $1,500,000 in the third trial.) The fact that her sorry saga is still dragging on is an indication that even if Sony wins the current action, there are likely to be appeals against such a disproportionate and blatantly punitive figure.

Follow me @glynmoody on Twitter or identi.ca, and on Google+

Filed Under: bittorrent, copyright, file sharing, lawsuits, pre-release, sweden
Companies: sony music

Why Is The UK Blocking Access To Sites Without Any Hearings?

from the extremely-questionable dept

We already wrote about the UK court letting the BPI decide what sites the court would order all UK ISPs to block access to, but as more details come out about the process, the scarier it is. As Duke noted in our comments, the whole process lacked any sort of due process:

For those interested the full judgment is here: EMI Records Ltd & Ors v British Sky Broadcasting Ltd & Ors [2013] EWHC 379 (Ch)

The law is a bit worrying (I haven't read it in that much detail but I think it goes slightly further than previous ones) - the main concern is that, again, there was no hearing, no defence, no cross-examination of evidence etc.. Without seeing the witness statements I can't be sure, but I think the judge just accepted everything the BPI had to say at face value.

That's not justice - not in an adversarial court system.

The Open Rights Group (ORG) in the UK has quite reasonably expressed its concern about how such blockades are likely to stifle speech, especially when there is no one allowed to argue against the blocking.

We are concerned that these orders are not protecting speech, are overblocking forums and discussion, and are prone to error as the actual block lists are private.

Furthermore, users and the public interest have not been represented in the processes

It amazes me that anyone thinks it's reasonable to shut down a site without any sort of due process in the form of an adversarial hearing, in which multiple sides can be presented. The opportunity for widespread abuse and the stifling of free expression is massive.

Filed Under: blocking, censorship, due process, file sharing, hearings, uk

Japanese Law Enforcement Uses New Copyright Law To Arrest 27 File Sharers

from the lock-'em-up dept

Last year, we noted that Japan had put in place ridiculously draconian copyright laws that criminalized unauthorized downloads, DVD backups and even watching infringing YouTube videos in some cases. And, of course, what good is a law if it's not used? So, Japanese law enforcement apparently went on a big raid, searching 124 locations and arresting 27 people. Those arrested may face between two and ten years in jail, because that's a reasonable punishment for sharing something. I don't see how this makes anyone respect copyright any more, or gives anyone any additional incentive to support the legacy players who are using this system to put fans in jail.

Filed Under: arrests, criminal copyright, file sharing, japan, law enforcement

Music Industry Data: Sales Up, Piracy Down... But It's Not Because Of Any 'Anti-Piracy' Efforts

from the let's-walk-this-through dept

A few folks have sent over variations on two different reports concerning the music industry, with some suggesting that this is "proof" that the recording industry's "war on piracy" has been effective on two fronts: increasing sales and reducing piracy. Of course, for many years, we've questioned whether or not reducing piracy actually increases sales, so we looked closely at the numbers and they don't seem to say what some people think they're saying. The Hollywood Reporter has a good summary of both reports. One comes from IFPI, celebrating that "global recorded music revenue" rose 0.3% in 2012. That is, obviously, a tiny increase, but it is an increase. Of course, as we've noted, "recorded" music revenue is merely one piece of the wider music industry ecosystem -- and that entire ecosystem has been growing for quite some time.

The second report comes from one of the industry's favorite researchers, NPD, claiming a massive decline in music file sharing (based on consumer surveys). I've found NPD's data to be suspect in the past, but let's just assume this is true. Then, can we reach the conclusion that the industry's anti-piracy efforts both worked and that it led to increased sales?

Actually... no. Not even close. We can see this pretty clearly just by looking beyond the recorded music market, to the wider file sharing space. Various reports have made it clear that widespread file sharing (mostly of infringing content) has continued to grow quite rapidly during the same time period. Sandvine reports (pdf) that BitTorrent traffic increased 40% over the same basic time frame. Or, zero in on a different market beyond music. How about software? The BSA's annual report continues to show increases in "piracy."

What does that say? Well, if wider anti-piracy campaigns were effective, we wouldn't just be seeing a decline in music infringement. We'd see similar declines across the board. But the overall space and some other, similar, markets are showing increases in infringing content spreading.

That leads us to the much more reasonable hypothesis: the reason that music piracy is down and revenue is up is because the industry has finally started allowing more innovation into the market. Not surprisingly, this is exactly what we've been arguing for years. If you let the tech industry create useful new services that better provide the public with what they want, you get services and products that people are willing to pay for. And when that happens, infringement decreases, because the legitimate and authorized services are better than infringing. It's why music infringement fell off a cliff in Sweden when Spotify launched there, despite also being the home of The Pirate Bay. Notably, when music infringement plummeted in Sweden, other types of infringement did not similarly drop.

In other words, for all the complaints about these new services, and the many, many attempts to hold them back or neuter them, letting new services grow and thrive seems to be the best "anti-piracy" measure that the record labels could have used. And yet it still thinks it needs to focus on punishing fans and limiting services.

Filed Under: file sharing, music, piracy, purchases, revenue
Companies: ifpi, npd