It's not like many of us haven't been saying this for years: but fighting piracy through greater copyright enforcement doesn't work. It's never worked and it's unlikely to ever work. A year ago, we released our big report, The Carrot or the Stick? that explored at a macro level what appeared to lead to reduced levels of piracy -- enforcement or legal alternatives -- and found overwhelming evidence that enforcement had little long-term impact (and a small short-term impact), but that enabling legal alternatives had a massive impact in reducing piracy. This should sound obvious, but it was important to look at the actual data, which backed it up.
The researchers say that in order to compete with unlawful file sharing (UFS), easy access to information about the benefits of legal purchases or services should be given in a way that meets the specific benefits UFS offers in terms of quality, flexibility of use and cost.
The team looked at the extent to which the unlawful sharing of music and eBooks is motivated by the perceived benefits as opposed to the legal risks. Involving almost 1400 consumers, the research explored people's ability to remain anonymous online, their trust in the industries and UK legal regulators such as Ofcom, and their downloading behaviour.
It's a very different approach to our own research, but the conclusions remain almost identical. In short, the researchers found that for people who really "trust" regulators, then the threat of punishment was effective. The problem, however, is that not that many people actually trust regulators. That leaves officials with two choices: increase trust in regulators, or... figure out ways to incentivize more legal, innovative alternatives. And, of course, one way to destroy trust in regulators is to support policies like expanding copyright enforcement.
Co-author Dr Piers Fleming, from UEA's School of Psychology, said: "It is perhaps no surprise that legal interventions regarding UFS have a limited and possibly short-term effect, while legal services that compete with UFS have attracted significant numbers of consumers.
"Our findings suggest that it may be possible to diminish the perceived benefit of UFS by increasing risk perception, but only to the extent that UFS is considered emotionally, and users trust industry and regulators. Increasing trust in industry and regulators may be one route toward encouraging UFS to be considered in emotional rather than rational terms. However, given the limited impact of risk perception upon behaviour, a better strategy would be to provide a desirable legal alternative."
So, that's common sense and two very different studies with very different approaches -- all suggesting the same thing. And yet, politicians, regulators and legacy industry folks still insist that ratcheting up enforcement is the way to go. What will it take for them to actually follow what the evidence says, rather than continuing with faith-based copyright policies?
Today is "International Talk like a Pirate Day." While it's a lot of fun to act like a pirate, drink rum and catch up on Errol Flynn movies, piracy is also a serious issue with real economic and legal significance. As electronic devices become an increasingly ubiquitous part of our lives, the content we consume has moved from analog to digital. This has made copying – as well as pirating – increasingly easy and prevalent.
Adding fuel to the flames of this rising "pirate generation" has been the content industry's recalcitrant and often combative attitude toward digital markets. Piracy, and the reactions to it, has had an immense impact on the daily lives of ordinary Americans, shaping their digital experience by determining how they can share, transfer and consume content.
As soon as electronic storage and communication technology was sufficiently developed, digital piracy became accessible. Whether it's a song, movie, video game or other piece of software, you could suddenly reproduce it without having to steal it off a shelf or obtain any specialized machinery to counterfeit it. Additionally, if you wanted to listen to an mp3 of the latest Britney Spears album on your computer, there weren't many lawful options. This led to a surge in online piracy and helped foster a culture of online file-sharing.
The music industry historically has a reputation for being hostile to, or at least slow to embrace, digital markets. Yet there were also some major artists who were early innovators in the space.
Before Spotify or iTunes, there was BowieNet. This music-focused internet service provider launched in July 1998 and gave users 5MB of space to create and share their own websites, content and chat. On BowieNet, according to Ars Technica: "[f]ans could get access to unreleased music, artwork, live chats, first-in-line tickets, backstage access, tickets to private, fan club-only concerts." David Bowie saw the potential to help his fan base access his content and discuss it in a social way in the early days of the internet, before Facebook or Myspace. He remarked at the time: "If I was 19 again, I'd bypass music and go right to the internet."
Bowie wasn't the only early music pioneer of the internet. Prince was also an early unsung hero. In the early 2000s, he created NPG Music Group, later Lotusflow3r. He even won a Webby Lifetime Achievement Award in 2006. Unlike BowieNet, NPG and later Lotusflow3r provided releases of full albums.
As musicians and users were experimenting with new ways to share content on the internet, the United States was working with other World Intellectual Property Organization (WIPO) member countries to create the most comprehensive "digital" update to the Copyright Act. In 1998, President Clinton signed into law the Digital Millennium Copyright Act, which implemented U.S. WIPO treaty obligations, as well as several other significant titles (including the Vessel Hull Design Protection Act – which pirates of the nautical variety might care about). Of particular importance were the sections providing for "safe harbor" (Sec. 512), which protected service providers from infringing content generated by their users, and "anti-circumvention" (Sec. 1201), which was meant to stop pirates from hacking digital rights management (DRM) and similar restriction technologies.
Unfortunately, while the system worked when isolated incidents of infringement occurred on largely static web pages—as was the case when the law was passed in 1998—it is largely useless in the current world where illegal links that are taken down reappear instantaneously. The result is a never-ending game that is both costly and increasingly pointless.
While lawmakers were hard at work trying to find ways to quell online piracy, the courts weren't taking a nap. Indeed, going back to the 1980s, there were important judicial fights that would set the stage for how content would be handled on our electronic devices.
The U.S. Supreme Court's 1984 Sony Corp. of America v Universal City Studios Inc.decision coined what is known as "time shifting," referring to a user's ability to record a live show using the Betamax to watch it later. The court's decision set the precedent that a manufacturer would not be held liable for any contributory negligence or potential infringement where they did not have actual knowledge of infringement and their devices were sold for a legitimate, non-infringing purpose. As Justice John Paul Stevens wrote in the majority opinion:
One may search the Copyright Act in vain for any sign that the elected representatives of the millions of people who watch television every day have made it unlawful to copy a program for later viewing at home, or have enacted a flat prohibition against the sale of machines that make such copying possible. It may well be that Congress will take a fresh look at this new technology, just as it so often has examined other innovations in the past. But it is not our job to apply laws that have not yet been written.
But not everyone was so enthusiastic. Jack Valenti, former president of the Motion Picture Association of America said in a congressional hearing two years prior [regarding VHS technology]:
We are going to bleed and bleed and hemorrhage, unless this Congress at least protects one industry that is able to retrieve a surplus balance of trade and whose total future depends on its protection from the savagery and the ravages of this machine.
The 9th U.S. Circuit Court of Appeals would take another approach in 2000s A&M Records v Napster. The court affirmed the district court's ruling that peer-to-peer services could be held for contributory infringement and vicarious liability. Even though their service merely facilitated the exchange of music as an intermediary, they were on the hook. Judge Marilyn Hall Patel wrote in the district court's ruling:
…virtually all Napster users engage in the unauthorized downloading or uploading of copyrighted music; as much as eighty-seven percent of the files available on Napster may be copyrighted, and more than seventy percent may be owned or administered by plaintiffs
Napster lodged several defenses, including fair use, but the most important (in lieu of the Sony decision) was the concept of "space-shifting," referring to the process of a user converting a compact disc recording to mp3 files, then using Napster to transfer the music to a different computer. Patel concluded Sony did not apply, because Napster retained control over their product, unlike Sony's Betamax, which was manufactured and sold, but not actively monitored.
The courts would continue ruling in a similar manner as other peer-to-peer services found themselves in the courtroom. At times, users would be targeted. And in the 2003 case of In re: Aimster, the pirates' bluntness for wanting to bring the music industry to its knees did not help the situation
What you have with Aimster is a way to share, copy, listen to, and basically in a nutshell break the law using files from other people's computers…. I suggest you accept aimster for what it is, an unrestricted music file sharing database – (posted by zhardoum, May 18, 2001)
Naturally with all of the music-sharing services were being shut down, the pirates found a new way to connect, share files and shape the industry. Which brings us to BitTorrent and websites like The Pirate Bay and Swepiracy. Torrenting does not require a central server, does not require direct streaming from one peer to another and the host does not contain any full file contents. All of the content received is from other users.
Sweden brought Pirate Bay to trial for both civil and criminal penalties. Per E. Samuelson, the site's attorney, lodged the now-famous (and familiar, for U.S. copyright scholars) King Kong defense:
EU directive 2000/31/EC says that he who provides an information service is not responsible for the information that is being transferred. In order to be responsible, the service provider must initiate the transfer. But the admins of The Pirate Bay don't initiate transfers. It's the users that do and they are physically identifiable people.
The defense was unsuccessful. Which brings many questions to mind for future cases — how will courts begin to rule with such complex systems of file transfer as fragmented torrents? Targeting users is widely unpopular, especially in the United States, where statutory penalties range from $750 to $300,000 per willful infringing use and $200 to $150,000 for non-willful infringement.
Efforts around the world have continually been made to combat piracy. But maybe it's time we take a fresh look at the market. As the Copia Institute observed in a recent report, whenever there are new ways to share content legally, users ultimately respond by employing those technologies.
On this International Talk like a Pirate Day, let's take a moment to remember the pirates and how they have helped shape the internet era. While CD sales and digital downloads may be declining, new streaming services are on the rise (vinyl records are also doing remarkably well). The digital revolution has, indeed, changed how we consume and access our music. It has given us access to (nearly) everything, through services like Spotify and Apple music, at a reasonable price and with unparalleled convenience.
From the consumer's perspective, you now carry hundreds of hours of music on your phone and listen to it whenever you want – no need for one of those bulky CD binders. The slot where the CD used to go in your car is now an auxiliary cable jack.
From an artist perspective's, these are new challenges that require adaptation. Particularly in the case of music licensing, our pre-existing laws are unnecessarily complex, cumbersome and antiquated. However, innovative technologies and services are not to blame. Instead, we should seek new and equally innovative ways for artists to be compensated through more direct and transparent payments (such as Ujo).
While our copyright laws are far from perfect, we still have substantial freedom to remix, repurpose and share creative content online in a social context. This is essential to online free expression, digital commerce and the proper functioning of the internet itself. As additional discussions in Congress and in the courts move forward, let's make sure we keep it that way.
The Indian film industry has long had a complicated relationship with piracy. After all, India's Bollywood regularly produces the most films of any other country in the world (it's often neck and neck with Nigeria). That seems to be a sign that the market is pretty healthy. After all, filmmakers keep telling us that piracy is going to destroy their reasons for making films... and yet here's a market that's making tons and tons of films (many of which are excellent). And, as we've noted in the past, the film studios in India are making lots of money, in part because they're competing effectively against piracy. And, then you even have some Indian filmmakers who recognize that piracy helps spread the message of their films to a wider audience.
And yet... because it's (oooooh! scary!) "piracy," there will always be some who freak out and come up with bad ideas. Apparently, one of those bad ideas is now the law. After already putting in place dumb site blocking laws that force ISPs, under court order, to block access to sites deemed hubs of infringement, the Indian government now says that getting around one of those blocks (hi there, VPN user!) is a criminal act that could get you three years in jail.
"What are you in for?" "Me? I used a VPN to access Archive.org."
So why is the Indian government doing this kind of thing, despite everything noted in the first paragraph about the thriving and successful Indian creative industries? Perhaps it's because of absolutely bullshit articles like this one at "The News Minute" claiming that Indian films gross $2 billion, but piracy makes 35% more. I found that article because well-known copyright maximalist, Canadian lawyer Barry Sookman, happily tweeted the link. But you have to be pretty bad at understanding copyright law if you think it's a good article. After all, it struck me as odd for the headline to note that "piracy" makes more money than the Indian film industry. And that's because it's not true. Yes, the article starts out by claiming it does:
India's film industry, said to be the largest globally with some 1,000 movies produced each year, earns around $2 billion from legitimate sources such as screening at theatres, home videos and TV rights. But with $2.7 billion, piracy earns 35 per cent more, and a way out has proved elusive.
Where is this $2.7 billion coming from and where is it going? And if it were really true that piracy "earned" so much more money, uh, then shouldn't the Indian studios embrace piracy and start making that money for itself? But, of course, the answer is that that's not what's actually happening. It's just how the terrible reporter at The News Minute confusingly explains things, and copyright lawyers like Sookman happily retweet because it fits into his narrative. But you have to dig deeper into the article to find out that the $2.7 million "earned" by pirates is actually just the made up number of the value of movies downloaded.
"The infringing copies appear online within few hours of a film release," Singh told IANS, and added: "The Indian film industry loses around Rs 18,000 crore ($2.7 billion) and over 60,000 jobs every year because of piracy."
You see, here they're now calling the $2.7 billion "losses." Because that's a made up number that the industry wants you to believe it would have made if piracy did not exist. But that's not money "earned" by piracy. And pretending it is is incredibly dishonest. After lots of hand-wringing and whining about evil pirates, finally, at the end of the article, you have someone who speaks sense, filmmaker Anurag Basu, who recognizes the way you beat piracy is by competing with it:
"Piracy is working because people can buy a (pirated) DVD for Rs 100 and a whole family can watch it. We have to offer that kind of entertainment at that price. It has to be as easy to get an original DVD as it is to get a pirated one," he said.
But, instead of doing that, the government is buying into ridiculous claims about pirates "earning" more money, and thus they're now trying to criminalize merely accessing a website that they've banned for having infringing material. Websites like the Internet Archive and Vimeo.
Over the past few months, the legacy recording industry has coalesced around a new talking point -- a so-called "value gap" between different kinds of music services. In particular, the phrase is used to attack YouTube and to claim that it's somehow unfair that the ad rates and money made from the ad supported YouTube is much lower than purely subscription services. This has lead to the repeated false claim from the RIAA and others that revenue from vinyl records is more than from ad supported streaming.
Unfortunately, this value gap phrase has caught on in certain circles -- including over in Europe where the European Commission has mentioned it as it puts in place plans for copyright reform. Tragically, and incorrectly, EU officials have started referring to reasonable intermediary liability protections and other things as a "loophole" within copyright law that somehow allows platforms to "unfairly benefit." It allows them to claim that they're just trying to "level the playing field" when that actually means tilting the playing field heavily in one direction.
The claim that this difference is “unjustified” or somehow “unfair” should be challenged. The music industry’s revenues have
always differed depending on the sources (i.e. the sales of sheet music and phonograms, live performances, radio and TV
broadcasts). Online services have become additional sources of revenue, with different business models and technologies
generating different incomes – reflecting the current situation in the offline world.
And that's true, but even that underplays the reality of the situation -- which is that there are good reasons for differentiation here. It's not just about differences in sources, but differences in how people consume music and the money that changes hands reflects that. Terrestrial radio is free and ad supported -- and it's an easy low-barrier entry point for people who aren't necessarily huge music fans. Then as you travel up the ladder of musical fandom, and people get more committed, they may use a subscription service, or have their own locally stored music.
Sacquet further points out how the ideas that the EU is apparently considering would create a massive disaster for internet services that provide platforms for music:
Among the potentially very harmful measures considered by European policymakers to solve this “value gap” is the “clarification”
of the right of “communication to the public” – i.e. both user and online hosting services would be “communicating to the public”
each time a user is uploading a content online. Online platforms, today only indirectly liable for copyright infringement, would
become directly liable. All online hosting services would de facto fall outside of the scope of the liability protection
regime of the E-Commerce Directive.
Such a measure would have far reaching consequences.
Firstly, it could cause online services to shut down their upload and sharing services, thereby chilling innovation.
Secondly, this would severely restrict users’ freedom to impart and receive information, something that policymakers have
struggled to grapple with in the past.
Thirdly, it could cripple the growth of the digital economy – when the purpose of the Digital Single Market is the exact opposite.
But, perhaps even more importantly, is that it would end up harming the very musicians clamoring for such a solution. We're still in the very early days of figuring out how music services should best work online. The whole concept of the "value gap" and "leveling the playing field" really are all about deciding that there is "one true business model" for all music services to live under, and EU technocrats (heavily pressured by the legacy recording industry) are going to tell the world what that is. That's a recipe for disaster not just for the tech sector, but the very musicians who rely on these services to make money today.
Most importantly, they will completely lose out on the differentiated ways in which fans enter the music ecosystem. When you have a one-size-fits-all model, it pushes towards a world where the vast majority of casual music fans are left out, in a misguided effort to try to force more money out of stronger music fans. Years ago, music economist Will Page pointed out that the industry was wrongly focusing on share of wallet that they were able to extract from people, rather than trying to expand the population that was listening to music and contributing to the music ecosystem in some way. That is, there's a large percentage of the population that doesn't support the music ecosystem in any way. They don't subscribe to anything. They don't go to concerts. They're casual music listeners at best. And there's a real opportunity to offer low barrier entry points to those people, allowing them to "move up the ladder" to become bigger and bigger music fans.
But you lose all of that with a forced "level playing field." The "value gap" is not a value gap at all. It's simply showing differentiated pricing to help bring in more casual music fans and create new opportunities going forward. So the end result here would be not just harming technology companies and leading to fewer services with less innovation, but, even worse, a significantly smaller population of music fans who are willing to support the industry -- and the ones who remain will be getting squeezed harder and harder by the industry, eventually probably shoving many of them out of the market as well.
The talk of a "value gap" is not only misleading and wrong, but it's dangerous. And it's dangerous to both internet services and musicians -- which shouldn't be a surprise because, despite all the rhetoric, the two are pretty closely aligned in their overall interests.
For many years now, the MPAA and the various studios that make it up have filed various lawsuits against various internet platforms for not waving a magic wand and making piracy disappear. This also appears to be their big complaint against Google, which has bent over backwards trying to appease the industry and it's still not enough (of course, that may be because what the industry really wants from Google is money, not stopping piracy). But now the shoe is somewhat on the other foot as Sony Pictures is being sued for failing to stop piracy. Really.
The case stems from the infamous Sony hack from a year and a half ago, where all of Sony Pictures' emails were released onto the internet. Possibility Pictures is suing Sony claiming the hack created a breach of contract in its failure to stop piracy of its film, To Write Love On Her Arms (TWLOHA), a 2012 movie starring Kat Dennings, based on the true story of the struggles a woman went through leading to the founding of her charity (which goes by the same name as the movie). While most people focus on the emails from the hack, it should be noted that before those emails were released, the hackers released some pre-release films... including TWLOHA. And that, Possibility claims, is a breach of Sony's contract.
Reading through the full filing, the key breach appears to be of Section 16.7 of the contract, which includes an "anti-piracy authorization" stating:
So that's kind of amusing, since the clause is clearly designed to give Sony the power to send out threat letters and takedowns and use DRM and other such stuff -- but Possibility is basically turning it around on Sony and arguing that its failure to stop piracy shows that it did not use "appropriate technical measures." I'm not sure a court will go for this kind of judo move in flipping the anti-piracy authorization clause around to suggest that it puts certain contractual requirements on Sony Pictures, rather than simply authorizing it to do certain things as the language is clearly designed to do.
The lawsuit goes on and on about all of the great marketing plans Possibility had for the film (Justin Bieber's mother was going to tweet about it!), but apparently that was all ruined when the hackers, whoever they were, leaked the film. It also highlights Sony's earlier security problems, focused on the famed PSN hack, even though that's an entirely separate subsidiary from Sony Pictures. And then it spends a lot of time pointing to reporters who pointed out that Sony Pictures' computer security was abysmal. That's true... but it's not clear that's against the law. Basically, this lawsuit is mostly "Sony incompetent" and then "because of that our contract was breached."
Possibility then tries to show damages from the leak of the film.
The direct and proximate result of the foreseeable and avoidable Data Breach just four months prior SPWA's planned release of the Picture was an extreme dilution of the otherwise viable market for Plaintiff's Picture. The November 2014 Data Breach resulted in the unauthorized release of the Picture on multiple sites worldwide and destroyed the audience demand for the Picture. Following the Data Breach and worldwide pirated release of the Picture, SPWA abandoned the social marketing plans and lost all interest in promoting and marketing the Picture since it was otherwise available for free as a result of its failure to maintain adequate security of the Network. As an isolated sample of the damage caused the anticipated video-on-demand ("VOD") revenue stream of the Picture, note that in the first six days alone following the Data Breach, the stolen Picture master was downloaded-for-free a reported 19,949 times (an average rate of over 3300 illegal, revenue-free downloads per day).
So... a few things on this. First, downloads don't equate to lost sales, generally speaking, so the attempt to suggest that here without further evidence is pretty silly. Second, less than 20,000 downloads is... kinda weak. It certainly suggests there wasn't much interest in the film in the first place. Third, the idea that there's no market for a movie that's available for free online is easily debunked by the numerous movies that do quite well at the box office and in the home video market despite also being pirated online.
However, the more interesting bit is that this puts Sony Pictures in the fairly awkward position of potentially having to argue that piracy isn't really that damaging to a picture. I'm guessing that Sony Pictures and the MPAA want no part of that argument ever being filed in a court, because it will boomerang back to hurt them.
Either way, the filmmakers are demanding almost $9 million:
The amount of that revenue for which we seek payment, less amounts paid to date, is $8,738,331...
For a movie that not that many people seemed interested in?
Separately, Possibility notes that Sony pointed out that there's a binding arbitration clause in their contract, and Sony has already said that if there's a dispute it must be handled by such an arbitration setup. Possibility tries to get around this, but (unfortunately!) courts have tended to accept these binding arbitration clauses as valid.
If I had to put odds on it, I wouldn't give this lawsuit much of a chance of surviving. The attempt to turn an anti-piracy authorization clause into some sort of requirement to block piracy is a massive stretch. The mandatory arbitration clause is also a problem. Plus, the overall lawsuit is pretty weak. The claim itself is not very well backed up. Chances are Sony can get this tossed out quickly -- but it will be amusing to see if it has to argue that piracy isn't really that damaging. That would be fun.
So you may have seen reports last week charging CloudFlare and some other tech companies with "aiding" internet malware pushers. The "report," called "Enabling Malware" was announced in a press release last week from the Digital Citizens Alliance -- a group that describes itself as representing consumer interests online:
Digital Citizens is a consumer-oriented coalition focused on educating the public and policy makers on the threats that consumers face on the internet and the importance for internet stakeholders – individuals, government and industry - to make the Web a safer place.
And while the story wasn't picked up that widely, a few news sources did pick it up and repeated the false claim that DCA is a consumer advocacy group. TorrentFreak, FedScoop and Can-India also picked up the story, and all simply repeated DCA's claim to represent the interests of "digital citizens."
But that leaves out the reality: DCA is a group mostly funded by Hollywood, but also with support from the pharmaceutical industry, to systematically attack the internet and internet companies, for failing to censor the internet and block the sites and services that Hollywood and Big Pharma dislike. DCA has been instrumental in pushing false narratives about all the "evil" things online -- "counterfeit fire detectors! fake drugs!" -- in order to push policy makers to institute new laws to censor the internet. DCA buries this basic fact in its own description, merely noting that it "counts among its supporters... the health, pharmaceutical and creative industries."
The organization was formed in late 2012, partly as a response to the MPAA's big loss around SOPA. Recognizing that it needed to change tactics, the MPAA basically helped get DCA off the ground to push scare stories about horrible internet companies enabling "bad things" online, and how new laws and policies had to be created to stop those evil internet companies. Much of this was merely speculation for a while, based on the fact that every DCA report seemed to wrongly blame internet companies for other people using those tools to do bad things online. However, it became explicit thanks to the Sony Hack, which revealed that a key part of the MPAA's anti-Google plan, dubbed Project Goliath, involved having the DCA pay Mississippi's former Attorney General Mike Moore (who mentored its current AG, Jim Hood), to lobby Jim Hood to attack Google.
That doesn't sound like a project of organizations just interested in "digital safety." It sounds like a project designed to attack internet companies. And, thus, it should be no surprise that every time DCA's name pops up, it's attacking internet companies. It was the organization that put out a report getting a variety of state Attorneys General (sense a pattern here?) to attack YouTube, because some criminals posted videos on YouTube. Rather than recognizing that this is a way to gather evidence and go after actual criminals, DCA decided that YouTube should be blamed for not taking those videos down fast enough. It was also the organization that put out a laughable report declaring the cloud storage site Mega a "haven" for piracy, where the methodology made no sense. Mega encrypts its content, but DCA and its researchers didn't seem to understand that, so they simply found a few links inbound to infringing works, and extrapolated out that a huge percentage of files on Mega were infringing.
DCA's boss, Tom Galvin, magically was chosen to present to the National Association of Attorneys General back in 2013, just months after the organization was founded, and in timing that (coincidentally, I'm sure) lines up almost exactly with the MPAA's decision (as revealed in the Sony emails) to focus on state Attorneys General to attack Google. DCA's Twitter feed regularly retweets the MPAA and various other front groups set up by the legacy copyright industries, such as the Copyright Alliance.
In short, the Digital Citizens Alliance is not an alliance of "digital citizens" at all. It's a front group set up by the MPAA and some big pharmaceutical companies to pressure policy makers into getting internet companies to censor the internet. Don't buy it.
In these past few weeks, the world has become divided into two camps: those who are sick of hearing anything about Nintendo's new smash mobile hit, Pokemon Go, and those who can't get enough of it. While the media tags along for the ride and with the app shooting up the charts as the craze takes hold, it's worth keeping in mind that this is Pokemon and Nintendo we're talking about, two connected groups with a crazy history of savagely protecting anything to do with their intellectual property.
Still, it was strange to learn that Nintendo is issuing all kinds of takedown requests to "pirate" versions of the Android app that are available roughly all over the place. The reason I wrapped that word in quotation marks above is that the Pokemon Go app is entirely free and even the unofficial versions of the app still point the user back to the app's official store for any in-game purchases.
Nintendo is obviously not happy with this black market distribution. Although it doesn’t seem to hurt its stock value, the company is targeting the piracy issue behind the scenes. TorrentFreak spotted several takedown requests on behalf of Nintendo that were sent to Google Blogspot and Google Search this week. The notices list various links to pirated copies of the game, asking Google to remove them.
Thus far the efforts have done little to stop the distribution. The files are still widely shared on torrent sites and various direct download services. The copies on APKmirror.com remain online as well.
So why is Nintendo engaging in a losing war against its own popularity instead of deciding to spend the time counting the money that is streaming in from its smash hit instead? Well, the speculation is that this has all to do with the geographic release windows for the app.
With no commercial gain to be had from stopping people playing the game, I’m guessing Nintendo is just trying to keep it in the hands of users in countries where Pokémon Go has been officially released. Maybe to cut back on stuff like the problems some Korean gamers are having right now.
The issue appears to be that the game doesn't really function in countries where it hasn't been officially released yet. This means that users of the unofficial apps in these countries are likely to find that no Pokemon exist to be collected, or are at least far more sparse than they will be once the release is official in that country. This has led to some minor frustration from those who downloaded the app from an unofficial source, as they wander around doing essentially nothing.
But so what? That isn't really Nintendo's problem and there's no way that the company will take on any ill-will from those downloading unofficial copies of the game where it hasn't been released yet. The app, keep in mind, is a free one and points to Nintendo's in-game store for purchases whether it's from the official app or the unofficial one. There's literally no money lost in this in any way and, it can easily be argued, the widespread availability from many different sites may well be super-charging the viral nature of the product. That should be a huge win for Nintendo, as the company gains new and free distribution channels at zero cost.
If this is about the geo-restricted release dates, I sort of get it, but I only sort of get it because I already know how crazy-insane Nintendo is in terms of controlling every last aspect of every last product it offers. The company just can't help itself, even when it can be argued the "pirated" apps are doing way more good than harm.
Google is big and successful. Some legacy entertainment companies have been struggling. For whatever reason, many of those companies have decided that Google's success must be the reason for their downfall, and they've been blaming Google ever since. It's pervasive and it's deeply ingrained. A few years ago, I ended up at a dinner with a recording industry exec (and RIAA board member) who was so absolutely positive that Google was deliberately trying to destroy his business that it was reaching delusional levels. Of course, these legacy players have been banging on this drum for so long that they've convinced some others that it must be true, including some content creators and politicians. They all believe that the correlation of Google's success and their own struggles must be about Google, and not their own failures to innovate. And their number one argument seems to be (ridiculously) that Google "profits" from piracy and therefore Google encourages piracy.
As this drumbeat has gotten louder and louder, Google has felt the need to respond. The company has, for many years, actually done plenty to try to stop piracy, rather than encourage it, and it's reached the point where Google is (stupidly, in my opinion, though perhaps politically necessary) actively appeasing the legacy industries, sometimes actively making its own search product worse. And, of course, as you would expect, these efforts are never enough for those industries. So now Google has taken to putting out a semi-regular report on how it fights piracy.
Today, Google came out with its latest such report which again shows that Google goes much, much, much further than the law requires -- and even much further than many are demanding the company already do. The headline pointer, which will get all the attention, is that YouTube's ContentID, by itself, has paid out over $2 billion. For some time now, Google has said that it's paid out over $3 billion to artists, but recent recording industry attack dogs have honed in on the fact that Google never broke out how much of the $3 billion was from ContentID. Now they're breaking it out somewhat -- noting $3 billion to the music industry and $2 billion from ContentID alone. The company also notes that over 98% of copyright management on Youtube is now via ContentID, rather than through DMCA takedown notices.
Of course, whether or not you think this is a good thing may depend heavily on your perspective. I appreciate that ContentID has created a new business model, but of course, we've seen how badly it performs in some situations leading to censorship or trollish behavior where some are using it to claim the revenue of other individuals.
The report also takes on the silly myth that Google likes to drive searchers to pirated information. They point out that the company has used the DMCA notices it receives as a signal to demote certain sites in search, and then points out that almost no one does the kinds of queries that still pop up infringing results (and it notes in a footnote that the examples it's using are ones that have been called out publicly by the RIAA and its friends):
Nevertheless, some critics paint a misleading picture by focusing
on the results for rare, “long tail” queries, adding terms like “watch”
or “free” or “download” to a movie title or performer’s name. While
the search results for these vanishingly rare queries can include
potentially problematic links, it is important to consider how rare
those queries are. Look at the relative frequency of these Google
searches in 2015:
“Star Wars The Force Awakens” searched 402× more often than “Watch Star Wars
The Force Awakens”
“Taylor Swift” searched 4534x more often than “Taylor Swift download”
“PSY Gangnam Style” searched 104× more often than
“PSY Gangnam Style download”
“Mad Max” searched 836× more often than “Mad Max stream”
“Pixels” searched 240× more often than “Watch Pixels”
And then there's this:
Google is obviously far from perfect, and as I've said in the past (and above!) I think the company goes way too far in trying to appease an industry that is placing a ton of misplaced blame on Google for its own failures to innovate and change with the times. But because so many people seem to be accepting the myths of the legacy industries, now Google feels the need to go even further and release these "guys, we're doing way more than any law has ever required" reports.
And while I haven't seen it yet, I can almost guarantee that the RIAA, MPAA and its various friendly groups will be rushing out press releases attacking this as "not enough." Because it's never enough when you can blame the more successful company for your own failures.
Last fall, our think tank, the Copia Institute, released a paper, The Carrot or the Stick? which detailed how innovation in the form of convenient, appealing and reasonably priced legal content streaming services appeared to be the most powerful tool in reducing piracy. The report looked at a number of different data sources and situations in multiple different countries. And what we found, over and over again, was pretty straightforward: ratcheting up enforcement or punishment did not work -- or, if it did work, it only worked exceptionally briefly. However, by introducing good, convenient authorized services, piracy rates fell, like off a cliff. We saw this pattern repeated over and over again.
And yet... instead of seeing policymakers and legacy content companies pursue strategies to encourage more innovation and more competition in authorized services, they continually focus on enforcement and punishment. This makes no sense at all. Take the situation in the UK, for example. Last week, the UK's Intellectual Property Office (IPO) came out with a report noting that piracy in the UK had dropped significantly in the wake of authorized streaming services like Spotify and Netflix entering the market. The full report is worth reading and pretty clearly suggests -- as our own report last year did -- that having good authorized services in place is the best way to reduce piracy.
The IPO’s report, carried out by research group Kantar Media, suggested a strong link between the rise of such services and falling piracy. 80pc of music listeners now use exclusively legal means, up from 74pc a year ago
This is all great and consistent with what we found in basically every country we looked at. But that's why it's equally troubling that, rather than supporting that innovative ecosystem that is successfully diminishing piracy, the UK's IPO has moved forward with its ridiculous plan to jail pirates for 10 years. As we described in great detail a few months ago, the IPO's support of 10-year prison sentences for copyright infringement was not only based on no actual data, and pulled out of thin air, but it directly contradicted numerous studies on the deterrence effect of longer prison sentences.
I spoke to people at the IPO (many of whom are quite reasonable) after the recommendation came out, and they insisted that the 10-year prison sentence would only be used for "true criminals" and not just people sharing files online. They apparently also promised Open Rights Group that the specifics would be clarified in the final bill so as not to target ordinary people file sharing online -- but that's not what happened:
Partly in an attempt to deal with headlines that this was “10 years for filesharing", the IPO has rewritten the definition of criminal liability. They told us during meetings that the new definition would make it very clear that ordinary internet users - including filesharers - would not be targeted, and raising the penalty would also mean narrowing its application to real criminals. Unfortunately the final draft appears to be as bad or worse than the original, with a very low threshold of “having a reason to believe” that the right holder will be exposed to “a risk of loss”.
So, what the hell is going on at the IPO over there? They have clear research showing that a massively effective way to reduce piracy is to get more good, convenient authorized services. And they have no research backing up the idea that increased prison sentences will reduce infringement. And yet, which one have they doubled down on?
This is why people have so little respect for copyright law and why we so often refer to it as "faith-based" policy making. The evidence clearly points in one directly, and the powers that be, instead, go in the other direction, against all the evidence, because some people "feel" that piracy must be punished to make it stop.
We've been covering for a while the ridiculous ongoing fight about the FCC's plan to open up the set top box market to actual competition. Historically, we've always seen that when closed technologies are opened up, it generally leads to much more innovation that benefits everyone. But the big cable companies are freaking out, because locked set top boxes are a huge moneymaker for them: they get customers to "rent" those cable boxes for an average of $230 per year. The industry, as a whole, takes in approximately $20 billion from set top box rentals alone. And they can only do that because the market is locked down. And the cable companies don't want to give that up.
They've been trying various strategies to kill off the FCC's plans, including the ridiculous, but frequently used, argument that opening up set top boxes will harm diversity (the opposite is actually true, but... details). But a key vector of attack on this plan has been to convince their buddies at the MPAA that open set top boxes are just another name for piracy. They've convinced some truly confused Hollywood types to freak out about more innovation in set top boxes meaning more piracy, leading to a series of similar op-ed pieces showing up basically everywhere. And those op-eds have influenced some of our clueless lawmakers too, who are now asking if open set top boxes will lead to a Popcorn Time revolution.
As we've explained over and over and over again, these concerns are complete bunk. The proposal has always made clear that cable providers will still be able to "determine the content protection systems it deems sufficient to prevent theft and misuse, and will not impede the introduction of new content protection systems." In other words, these other boxes will still be encumbered with DRM (as bad an idea as that is...).
Thankfully, now a new flurry of "response" comments have come in and people are pointing out just how wrong the "OMG piracy!" comments are concerning set top boxes. First up, some actual copyright law professors -- including Pam Samuelson, Peter Jaszi, Annemarie Bridy, Betsy Rosenblatt and Rebecca Tushnet, along with Mitch Stoltz from EFF -- have filed a response pointing out that the concerns about piracy from open set top boxes is not particularly accurate. First, they point out that it's not the FCC's job to protect a particular business model of legacy industries, and that the intent of copyright law is, once again, to benefit the public. And it seems like an odd way to do that by locking up set top boxes. They also take issue with the idea that because someone might potentially view infringing works via a set top box, it makes that an issue that (1) the FCC should even care about or (2) that is really about set top boxes at all:
Copyright does not confer a general right of commercial exploitation or “use” of a work.
Thus, products and services that touch copyrighted works do not infringe copyright, and
do not require a license, except to the extent that they implicate one or more of the
exclusive rights. A television set is worthless without video programming to view, and a
home audio system has little purpose without music. One could argue that the
commercial value of these devices derives from the copyrighted works they touch.
Following that reasoning, the sale of TVs and home audio equipment could be deemed a
commercial exploitation of copyrighted works. But because these devices don’t
ordinarily reproduce, distribute, or publicly perform works (let alone meet the rigorous
standards for establishing secondary liability under copyright law), the law does not give
copyright holders any right to prohibit their use and sale, dictate their design, or demand
They further point out that the set top boxes themselves are clearly not infringing anyone's copyright, no matter how much the MPAA and its friends have been repeating this myth. In some sense, the comment suggests that the MPAA is trying to roll back the famed Betamax decision that legalized the VCR (and, I should add, provided a massive new revenue stream for Hollywood).
Commenters in this rulemaking have characterized the proposed use of third-party
devices or services to access pay-TV programming with terms such as “exploit[ing],”7
“repackag[ing],” “convey[ing]” copyrighted works to a third party, and creating “new
uses on new platforms.” They imply that these activities constitute copyright
infringement, or that the Commission should prevent these things regardless of whether
they constitute infringement. These terms confuse rather than clarify the issue, because
most of the activities they describe are not copyright infringement.
For example, a set-top box or other consumer device that receives TV programming in
the home and displays it to the user does not inherently perform or display that
programming publicly, nor does it distribute copies of the programming. While such a
device is likely to make transitory, internal reproductions of programming in the process
of displaying it to the user, such reproductions are not copies for purposes of the
A set-top box or service might also make long-term personal copies of programming for
the customer to watch later, much as a videocassette recorder does. This is firmly
established as a fair use, including in systems where the recording is stored at a central
They also use the infamous lawsuits against the Dish Hopper system to remind the FCC that the MPAA and its friends have, shall we say, a rather long and sad history of exaggerating claims to say that basically any new consumer friendly innovation is automatically copyright infringement if it happens to impede their chosen business model:
Such devices and service arise with some regularity, and their status is resolved either through
litigation or licensing. For example, several programming providers sued Dish Networks,
accusing its Hopper DVR and PrimeTime Anytime service, which skipped commercials
upon playback, of causing infringement. After a court ruling that the core features of the
device and service did not infringe, Dish reached settlements with most of the
rightsholders in which the company agreed to limit the functionality of the service.
Meanwhile, in what might seem like a surprising source, another group calling bullshit on the MPAA is the local Hollywood writer's guild, the Writers Guild of America, West. Their full filing is totally worth reading. They basically make the exact point we've made for years: every time the MPAA fears some new innovation, it's not just wrong, but it often misses how that new innovation actually helps Hollywood in addition to the public:
It is often the case that when new technology emerges incumbent providers make
alarmist predictions about guaranteed harms resulting from these innovations. While some
concerns may be reasonable, the overwhelming majority of outlined harms are never realized. As
CBS Chairman and CEO Les Moonves said in 2015, “All these technology initiatives that
supposedly were going to hurt us have actually helped us. SVOD has helped us. DVR has helped
us. The ability to go online with our own content, CBS.com, and the trailing episodes – all have
helped us.” With the entertainment industry currently dominated by a handful of companies that
have never been more profitable, it is clear that new technology and forms of content distribution
have helped, not hurt the industry.
While new technology can create some business uncertainty, there is strong evidence that
pro-consumer developments that make legal content more accessible to viewers benefits both
consumers and content creators.
And then they point out that open set top boxes, combined with an open internet, are almost certainly a good thing:
Like all other entertainment industry participants, WGAW has strong incentives to
protect the health of the business. WGAW members are the creators of intellectual property and
their livelihoods depend on the ability of studios to license programming for initial exhibition
and generate revenue in secondary markets. As such, WGAW and its members do not take
concerns regarding piracy lightly. WGAW has consistently advocated for reasoned measures to
protect copyright and address infringement. But WGAW members are also strong proponents of
market competition, because it leads to more and better choices for consumers and more and
better opportunities for writers. WGAW’s position seeks to strike a balance between these
objectives, and led to our support for strong Net Neutrality rules and, ultimately, the need to
reclassify broadband Internet access services under Title II of the Communications Act. In our
advocacy, we were clear that Net Neutrality rules could protect Internet openness without
jeopardizing content, as the rules applied only to lawful content, and outlined ways to address
piracy that would not harm a free and open Internet. We believe the developments resulting
from the open Internet, primarily the growth of a robust online video market, demonstrate the
success of a balanced approach. The online video market generates significant revenues for
media companies and residuals for writers through the licensing of television series and feature
films and is projected to see upwards of 100 professional scripted series released for initial
distribution on subscription online video distribution (“OVD”) services in 2016. We believe a
similar balance can be achieved in the Commission’s proposed rules. Reasonable concerns can
be addressed. Content can be protected while competition is promoted.
They also point out that they're totally against piracy -- in fact, they argue that limiting piracy is important to their careers -- but they don't see how these open set top boxes will actually increase piracy, especially when it will likely create tons of other benefits.
WGAW strongly agrees with the need to protect content and to limit piracy. No less than
our members’ livelihoods depend on it. However, WGAW believes that a competitive navigation
device market can and will protect content and, consistent with our position in Net Neutrality, we
approach the proposed rules by assessing the likely benefits of competition and the risk of piracy.
We find that the risks of this proposal are no greater than those presented by an open Internet,
where there is strong evidence of a flourishing legal market that is very attractive to consumers.
There's a lot more good stuff in the full filing. Once again, the Writers Guild of America is one of the few voices that rises out of the Hollywood ecosystem that actually looks at the larger picture and how an open internet benefits everyone. In the past, the same organization came out against SOPA, in favor of better copyright law (as opposed to increased enforcement) and (as mentioned in the quoted portions above) in favor of net neutrality (while much of Hollywood opposed it). Kudos to the folks at the Writers Guild for taking a more accurate and holistic view of these issues, as compared to so many others.