We Can’t all be HBO…

\ by

game-of-groans-HBOLeading the piracy parade is ‘better than an Emmy’?  Please, speak for yourself Mr. Bewkes…

According a story yesterday in AdWeek, another well-paid executive linked to the HBO hit “Game of Thrones” is once again singing the praises of online piracy.  Last time it was HBO’s programming president Michael Lombardo, now Time Warner CEO Jeff Bewkes has joined the chorus.

…in response to a question about whether the network kinda-sorta regards the extensive theft of HBO’s flagship show, Game of Thrones, as a compliment, Bewkes said, “I have to admit it, I think you’re right.” The much-discussed fantasy series is HBO’s most popular, and “if you go to people who are watching it without subs, it’s a tremendous word-of-mouth thing,” the exec told investors. “We’ve been dealing with this for 20, 30 years—people sharing subs, running wires down the backs of apartment buildings. Our experience is that it leads to more paying subs. I think you’re right that Game of Thrones is the most pirated show in the world,” he said. “That’s better than an Emmy.”

Yeah sure, easy to say if you’re CEO of Time Warner and have a huge hit like HBO’s “Game of Thrones” on your hands.  But really, given that you work in the media industry Mr. Bewkes, didn’t you have a clue as to the impact your glib “soundbite” would have on an already hyperbolic debate over online piracy and copyright reform?

Fine Time Warner/HBO, feel free give your show away and boast that the record (pirate) downloading of Game of Thrones episodes is a hunky-dory thing for your bottom line.  In your case, it may well be….more power to you.

The problem is that when Jeff Bewkes muses to a reporter that, for a hit show like Game of Thrones, piracy is “better than an Emmy” it can lead the general public to assume the same reality applies to all content creators.  Certainly piracy apologists are likely to make hay–and headlines–out of it.

Perhaps creators whose works have been massively pirated can take some solace from Bewkes’ success, but the fact is his experience (and that of HBO programming) is not one matched by their own.  The Time Warner CEO likely doesn’t have much difficulty paying bills (or financing his next production) like so many do.  Many filmmakers don’t have the reach (or deep pockets) of HBO and, like it or not, for them online piracy (driven by black market profiteers) is a detriment to success–not a sign of it. Bewkes’ self-serving proclamation does little to advance or clarify the debate over how best to mitigate the corrosive impact that online piracy (for profit) has on artists.

Next time CEO Bewkes should choose his words more carefully and explain that for HBO,  the popularity of Game of Thrones is a measure of success that helps generate buzz that’s good for business–but that it’s important to differentiate between their distribution landscape and the one faced by so many others.

If he feels his words were misconstrued (webcast available here) he should clarify his remarks sooner rather than later for the sake of those whose livelihoods do suffer because of unchecked online theft.

Posted in: Piracy News & Views \ Tagged: , , , , , ,

Mega Goes Live but Business Model Remains Murky

\ by

dotcom-faceKim Dotcom’s much ballyhooed new venture, Mega, has gone live. and is, according to a tweet from the mastermind himself, already wildly popular, “250,000 user registrations. Server capacity on maximum load. Should get better when initial frenzy is over. Wow!!!”  It’s no great surprise that there’s a lot of early interest in site, but the real question going forward is whether anti-piracy activists should be running scared?  For now, it seems too early to tell.  The key to whether this new cloud-based file-sharing site will become the new nexus for online piracy depends on what business model is used, and at this point, it’s difficult to decipher exactly how this will all play out.

Screen Shot 2013-01-21 at 11.50.04 AMThere are already various cloud-based file-sharing sites, similar to the “new” Mega–sites DropBox and YouSendIt that already allow users to easily share large files across the web.  However, unlike Kim Dotcom’s now-defunct Megaupload site, these services do not incentivize uploads.   In other words,  in contrast to cyberlocker favored by pirates, these legit sites don’t offer cash rewards based on the number of times a file is downloaded.  As a result, most people who use these cloud-based file-sharing services do so because they have actual business to conduct, or seek to share files with family or friends.

Certainly some file-sharing that’s technically “illegal” takes place, but without cash carrots offered to uploaders, it’s relatively inconsequential in terms of the big picture.   The success of DropBox and YouSendIt is not predicated on the need to draw traffic and generate ad clicks.  Theirs is a business model that does not incentivize piracy on a viral scale.

Perusing the new Mega website, I found some references to its planned business model, but no mention (yet) of any individual “partner” rewards programs like those found in its previous incarnation.  Below is a solicitation for “Mega Storage Node” partners (located outside the United States).  This program seems focused on attracting additional host companies that wish to integrate Mega’s infrastructure into their own businesses.

mega storage node.019

The new “Mega” is seeking partners to become a “storage node.”

Like Megaupload, Mega also offers tiered  “Pro-memberships” which offer users greater storage and speed options.  Prices range from $9.99 per month to $29.99 per month.

Screen Shot 2013-01-21 at 1.06.46 PM

Although the new site has established its operations (and servers) outside of the United States, Mega’s “Terms of Service” does feature boilerplate language regarding intellectual property and copyright.

mega terms of service.021

Note that Mega’s terms also includes language that includes references to protecting its own IP.  

Our IP

13. The license that we give you to use the website and our services does not give you the right, and you can’t reproduce or use any of our copyright, intellectual property or other rights other than for the purposes of using the services and the website or as allowed under any open source licences under which we use intellectual property provided by others. The open source code that we use, where we obtained it, and licences for that code are all referenced in our FAQ.

14. You are not allowed to, and you can’t let anyone else, copy, alter, distribute, display, licence, modify or reproduce, reverse assemble, reverse compile (whether digitally, electronically, by linking, or in hard copy or by any means whatsoever) or use any of our copyright, intellectual property or other rights without getting our permission first in writing, unless in order to use our services and the website or as allowed under any open source licences under which we use intellectual property provided by others. The open source code that we use, where we obtained it, and licences for that code are all referenced in our FAQ.

At the moment the new site, not surprisingly, is running as slow as molasses due to heavy traffic.  It remains to be seen if, and how, its presence will impact the online piracy landscape going forward. Right now this new site doesn’t seem all that revolutionary.  For the end-user, it’s just another cloud storage solution.

No matter what transpires, Dotcom is clearly relishing his moment back in the spotlight.  He’s already busy tweaking Hollywood posting this Tweet and image a couple of days ago.  Despite his self-important cockiness, in the grand scheme of things, I don’t think he’ll be getting the last laugh.

dotcom mpaa tease.022

Though Dotcom would likely disagree, when U.S. law enforcement took his popular Megaupload offline a year ago, it  marked a significant  turning point in the battle against online piracy.   Since then real progress has been made.   Copy-cat sites that modeled the success of Dotcom’s business model closed their doors.  At the same time, more options for timely and legitimate online distribution of movies and music emerged–options both profitable for creators and affordable for consumers. Advertisers and payment processors have also stopped partnering with some remaining pirate cyberlocker sites, diminishing their profits and popularity.  Other companies, such as Google, have also had to address their role in aiding, abetting and profiting from piracy.  Overall, the lure of online piracy as a cottage industry has been greatly diminished.

Maybe Dotcom’s new Mega will be legit, maybe not.  The world will be watching, but I’m not too worried.  At least not yet.

 

Originally posted at voxindie.org

Posted in: Piracy News & Views \ Tagged: , , , , , ,

More Evidence Ad Dollars Support Piracy

\ by

I was happy to see today’s “Advertising Transparency Report” issued by USC’s Annenberg Innovation Lab that documents the flow of ad dollars from legit companies to pirate websites.  According to the report:

…many major brands are not aware that they are in fact the key source of funds for the Piracy industry, it is the goal of this “transparency report” to aid in helping these brands steer their ad dollars away from sites that exploit film, TV and music artists for what appears to be criminal gain.

Though I applaud the report’s overall findings that ad dollars incentivize and subsidize online piracy, I question the conclusion that “major brands” were not “aware that they are in fact the key source of funds for the Piracy industry.”   As I’ve noted in the past, advertisers are usually extremely careful, and cognizant, about where their advertising appears.  Why the sudden lack of concern for their ad placements online?

More than two years ago I was inspired to start this blog to document this very issue.  As an indie filmmaker facing piracy, it didn’t take me long to recognize there was a major link between ad dollars and the growth of online piracy.  I attempted to answer the question “Who Profits from Piracy?”  From my introduction:

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.

I wrote that in June of 2010.  Yet here we are, nearly three years later, and what has changed? Reading the latest news, it appears the answer is, “not much.” According to the LA Times Levi’s was said to surprised by the report’s findings and contacted their ad agency and instructed them to take immediate action to prevent their ads from appear on illegal file-sharing websites. Was Levi’s really surprised–and more important–will other companies finally follow suit?  Forgive me if I remain skeptical.  The fact that ad dollars fuel online piracy is not news.

This  video  (found on the introduction to this blog) is based on a presentation I gave at Canadian Music Week’s Global Forum in the spring of 2011.  It documents my journey through the landscape of online piracy and its undeniable link to advertising revenues.  Follow the money…

Some progress has been made since then, most notably, last year’s takedown of Megaupload–the Big Daddy of illegal file sharing.  It’s worth noting at this juncture, that Megaupload’s millions were generated in large measure by ad dollars (as well as subscription fees).   Numerous copycat websites have sprung up to fill the void left by Megaupload, and they too depend business models sustained by advertising dollars.  With the demise of legislative efforts to address this black market, content creators are left with little recourse.

Back in 2010 I attempted to contact advertisers like Netflix and others whose ads were, and still are, ubiquitous on numerous illegal download sites. Most of my efforts were ignored, but on July of 2010, after NPR aired a story about my blog on “All Things Considered” that mentioned Netflix ads; I received an email from Steve Swasey, their VP of Corporate Communications who wrote the following:

Netflix does not tolerate piracy and we do not support pirate sites.  We are very clear with our advertising agencies and affiliate partners about this.  Sometimes ads slip through and when this happens, we react swiftly and decisively, removing the ad and not paying the site.

Again, that was over two years ago.   Yet here’s an example of a Netflix ad (served by Google) on a pirate site I here last month.  The ad appears alongside an embedded, full stream of a pirated film, “Kyss Mig.”  As I said, not much seems to have changed.

Pirated movie with Google served Netflix ad

We’ll see if this latest report from Annenberg precipitates real change.  I did take heart by looking at the results of an unofficial poll that accompanied the LA Times piece asking readers: “Should brands avoid advertising on so-called pirate sites?”  As of now, 63% said yes, while 37% said no.  Perhaps there reason to hope, that at long last, the balance could shift away from an insidious equation where everyone, except the actual content creators, make money from online theft. When presented with clear and tangible evidence, the public seems to be on the side of creators.  Yet in this game, for any real progress to be made, the ball remains squarely in the advertisers’ court.

Posted in: Piracy News & Views \ Tagged: , ,