Dirty Money-Who Profits from Piracy

Piracy profit drives the growth in online piracy

Update: This blog was begun in the summer of 2010 to document the link between online piracy and ad profits.  
While I do update this site on occasion, I have a new blog which I update weekly at voxindie.org if you’d like to keep up on the latest news.

Although I’ve worked in the journalism/media field for some 27  years, I began this blog in my capacity as the co-producer/co-director of a recently released independent film “And Then Came Lola” in an attempt to raise awareness with regard those who encourage, enable and profit from online piracy.  While it’s almost a given that any creative work will become the victim of piracy in this day in age, I wanted to issue an alert to artists/writer/musicians about who’s behind today’s piracy and how piracy, if left unchecked,  will negatively impact the diversity of creative content available to all.  This video provides an overview of the connection between piracy and profits.

Online piracy isn’t about altruism, it’s about income. Today’s technology allows web pirates to steal content and monetize that content with a click of a mouse. Meanwhile, “legit” companies encourage and facilitate this theft while also profiting from it (ad service providers, advertisers and payment processors). The time has come for reasonable measures to be taken to discourage this theft. Content creators and consumers will benefit. Only the pirates and those who profit from their theft will lose.

In the process of scouring the web for the thousands of illegal download links and online streams of our film (more than 55,000 documented to date) I quickly discovered that various, theoretically legit companies, seemed to be (indirectly) generating income through the placement advertising on websites featuring streams and download links to pirated films.  In addition, and most  troubling,  is that fact these ads generate income for  operators of these pirate websites and add to generous profit totals for ad providers ($2.80 billion for 4th quarter 2011 for Google’s AdSense – all sources).    More on Google’s financials can be found here.

The nature of the advertising varies, but I was dismayed to discover that the ads were not limited to cheesy online gaming sites, etc.  Rather, they include a number of legit companies like Sony, Radio Shack, Pixar, Porsche, ATT, Chase, Network Solutions, Auto-Zone and even Netflix (particularly ironic since they carry our film).  The list of advertisers goes on and on. It’s the same situation, if not worse for other films.  Ads are ubiquitous on pirated content throughout the web: here’s an example of Google ads on a streamed version of the new release “The Last Airbender.”)

This dubious connection to piracy is not limited  to the companies whose ads appear on various pirate sites.    Even more problematic are those companies, like Google (via AdSense), that  generate their own robust revenue stream by providing the interface for the pirate-site pop-up ads themselves.   In this equation everyone,  except the actual content creators,  make money from this theft.

I made this short video of my experience with one website that featured links to my film and Google ads to demonstrate just how insidious this online black market has become.

Online ad providers include  web behemoth Google (via AdSense), DoubleClick (also owned by Google), Clicksor, Pubmatic, AdBrite and smaller companies like  Image Space Media. All offer web pirates an efficient means to generate income from ads on web pages displaying stolen content, while simultaneously generating income for their company.  This tacit financial support of these “pirate” sites serves to both encourage their creation and sustain their operation.

One could argue that the companies that provide the ads, as well as the companies being advertised, have no control over where the ads appear and thus bear no responsibility–hear no evil, see no evil? Is claiming ignorance any way to run an ad campaign or a business? It seems that the answer is “yes”–as long as there’s profit involved.

From my perspective, their implicit involvement, intentional or not,  should be revealed.  Every time one of these illegal files is added to a website where these ads appear, Google and et al earn money at the expense of the content creators.  This just isn’t right.

In the scheme of things, our successful (highly-pirated) little indie film is a mere drop in the piracy bucket–we are one among thousands.  However, collectively, this tainted revenue is significant, as is the harm done to those whose work is being stolen with the mere click of a mouse.

Certainly companies with the technological capacity (and robust balance sheets) of Google can afford to turn some attention to this issue.  If these companies can offer ad placement based on cached cookies and metadata, why can’t they vet the websites where their ads appear? It ain’t rocket science folks.  I daresay that if these websites were offering porn and not pirated films, these ads would NOT be popping-up, at least not for long.

Thus far Google hasn’t responded to any of my direct inquiries.  However, they have responded to my frequent DMCA notices  with a terse email  that my DMCA notices will be posted on the Chilling Effects website.   The implication therein is that by asserting my rights and sending a DMCA to request the removal of infringing content I am somehow “chilling” a pirate’s right to “free speech.”   Really?  In my view the only thing being “chilled” is our right to make a living.

I never heard back (save for boilerplate emails) from the companies I attempted to contact including Google, Sony and Pixar.  In July of 2010, after a piece appeared on NPR regarding this blog, I finally did hear from Netflix (whose ads pop-up everywhere on pirate sites).  Their response can be found on this blog’s Netflix page.  To this day, more than a year later, I still find Netflix ads splashed across web pages filled with pirated films.  Yet another example of industry putting profits over principle.

There were efforts underway in Congress to remedy the rampant theft for profit online, but opposition from the tech industry was swift and furious.  Much of the hysteria was ginned up by the tech industry’s astro-turf campaign to defeat the Stop Online Piracy Act (SOPA).   Hyperbole by likes of Google’s Chairman Eric Schmidt helped fuel the misinformation.  You can read my thoughts here on that subject.

I appreciate there were some legitimate concerns with SOPA and its companion bill in the Senate, but many there was also much misinformation spread and massive amounts of money spent by the tech industry to lobby against the bill (just as Hollywood spent money to lobby for it).    The point is we have to get beyond the hysteria and falsehoods and have reasonable discussions about what can be done and what might be effective (while stil embracing online innovations).  I, for one, believe we can build consensus on the issue but right now, in a sea full of red herrings, it’s difficult for reasonable people to discuss the real issues at hand.

In the spring of 2010 I sat down in Congresswoman Zoe Lofgren’s office for nearly an hour and showed her step-by-step how the online piracy profit model works and the negative impact it’s having on content creation, particularly independents who depend on back-end revenue to recoup investments, etc.  At the time, she seemed receptive and sympathetic so I’ve been disappointed to hear her parrot erroneous and inflammatory talking points rather than display leadership and make an effort to build consensus around possible solutions.

I suppose, since she represents a district which includes Google HQ, that was too much to ask, but I do remain hopeful that reasonable people will prevail and that we can find viable solutions to this.  If not, the richness of creative content will suffer and the diversity of choices consumers currently enjoy will be diminished.  Perhaps people won’t notice–after all, you can’t miss something that was never made.

YouTube videos are fun, but I for one would like to have a few more options when it comes to watching movies.  Ironically, it’s the big studios that will survive as they churn out remakes of remakes for theatrical release.  It’s the indie voices and the variety of content (and choices) that we’ll lose if nothing is done to stop this pernicious commerce predicated on piracy for profit.

-Ellen Seidler