Essential reading on the Kim Dotcom extradition case happening now.
Conclusion
As the Megaupload saga evolves, we’ll surely hear many more claims about the legal and moral implications of the case. Lessig is not the first, and he will certainly not be the last, to argue that Dotcom and his co-defendants should not be punished for their behavior. Nonetheless, it is important to keep in mind what allegedly happened here: Dotcom and his co-defendants made millions of dollars through the rampant theft and dissemination of countless artists’ and creators’ copyrighted works. For the sake of these artists and creators, who worked hard to produce the works that were unmercifully stolen, let us hope that Dotcom and his co-defendants are held accountable for their crimes.
Required reading regarding Larry Lessig’s pitch to help Kim Dotcom…
The second thing about Lessig’s declaration that jumps out is an apparent contradiction between Lessig and Dotcom’s defense team regarding the applicability of the DMCA safe harbors to Megaupload.
In the white paper, Dotcom’s defense team says
Even if the U.S. government’s wishful expansion of the criminal copyright law into the realm of secondary infringement were tenable (which it is not), Megaupload is shielded from criminal liability by specific “safe harbor” provisions in the Digital Millennium Copyright Act (DMCA), included in the law to protect companies like Megaupload that make efforts to remove infringing material in response to “take-down” notices issued by copyright holders
But in his declaration, Lessig asserts “The DMCA is only a defense in the civil context”. The reversal is notable.
Popcorn Time is now using the tired old Kim Dotcom defense that piracy is a “service issue”. We’ve heard this nugget for over a decade. The argument may have had some merit in 1999, but that is just not the case today more than a decade and a half later.
So with that in mind, here is our response to the “service issue” argument when Mr. Dotcom attempted it back in 2013…
In the anticipation of the announcement of the new Mega launch, Pat Pilcher at The New Zealand Herald wrote an article titled “Kim Dotcom on Ending Piracy” in which the journalist listed Mr.Dotcom’s five steps to ending piracy. Pilcher writes,
As ironic as that may sound, Kim Dotcom’s logic is inescapably robust. Here’s what his end to piracy manifesto says:
1. Create great stuff 2. Make it easy to buy 3. Same day worldwide release 4. Fair price 5. Works on any device
Looking at what Kim is saying, the 5 points seem pretty obvious, although each could quickly get bogged down once Hollywood gets involved.
So let’s look at these one by one.
1. Create Great Stuff
Well, that’s a no brainer. The content industries create the most prized and sought after “stuff” in the world including films such as Avatar, The Avengers, and The Dark Night Rises as well as franchises like Iron Man, Transformers, Harry Potter and others. Music artists include the likes of Adele, The Black Keys, Taylor Swift, The Beatles and countless others. Making great stuff has never been a problem.
2. Make It Easy To Buy
Another no brainer. Perhaps a decade plus ago this might have been an argument, but not today. There are over 500 legal and licensed music services alone. For the film industry there are services like Netflix, Vudu and Cinemanow as well as other direct to home video on demand providers that give consumers more access to more content across more platforms than at any time in history.
3. Same Day World Wide Release
For music this is more less the standard now and is also more and more common for feature film releases as well. This is a common practice for the largest and most anticipated releases of music and films, the “stuff” that is the most aggressively pirated. For smaller indie releases this may not always be possible but than again I’m not sure that the problem we are combating is in Nigeria on indie rock albums and movies that are more or less film festival darlings.
4. Fair price
Done. Netflix is $7.99 a month for unlimited access to it’s entire library of films and tv shows. Spotify is $9.99 for unlimited access to it’s entire library which consist of probably 95% of every known recording in print. Add to this the cost of a song download is 99 cents. Less than the cost of a candy bar. Renting a movie from a video on demand service ranges from 3.99 to 5.99. Price is no longer an issue and has not been for years.
5. Works on Any Device
Music is DRM free and has been for at least half a decade. Streaming Services such as Netflix and Spotify are also available on every major platform including not only Mac and PC computers, but also mobile devices such as smart phones and tablets by a variety of manufacturers. Additionally most new video game consoles and blu-ray players also include many of these same apps.
Well there it is, RIANZ’s response in full. I can’t argue with much that they’ve said, as they’ve pretty much complied with most of Kim’s 5 points.
So Kim Dotcom’s five suggestions have been fulfilled and yet, I don’t think we’ll see an end to piracy anytime soon. There is still one thing piracy offers that legal, licensed and legitimate services do not, and that is compensation to the artists, musicians, filmmakers and creators which requires that consumers actually do pay the fair price asked.
It’s all pretty simple and by Kim Dotcom’s own suggestions and admission it’s pretty clear where the problem is from here on out, and it’s not in his five suggestions…
One of the founders of popular file-sharing website The Pirate Bay has been arrested under an Interpol warrant as he was crossing into Thailand from Laos, police said Tuesday. Hans Fredrik Lennart Neij, who uses the alias TiAMO, was detained Monday by Thai immigration police at a checkpoint in Thailand’s Nong Khai province, about 500 kilometers (310 miles) northeast of Bangkok.
Kim Dotcom, the founder of the seized file-sharing site Megaupload, has declared himself “broke”.
The entrepreneur said he had spent $10m (£6.4m) on legal costs since being arrested in New Zealand in 2012 and accused of internet piracy.
Mr Dotcom had employed a local law firm to fight the US’s attempt to extradite him, but his defence team stepped down a fortnight ago without explaining why.
Perhaps it is ironic that Kim Dotcom is the arch nemesis of the record industry while Spotify CEO Daniel Ek is celebrated as the former Co-Founder and CEO of uTorrent. uTorrent is described as “the world’s most popular BitTorrent client with more than 100 million downloads” on Mr. Ek’s Wikipedia page.
This week the embattled Dotcom is said to have given up his stake (and shares) in his much ballyhooed digital music company Baboom.
In the screen shot below from the TechCrunch, “CrunchBase” we see the BitTorrent cast of characters we’ve gotten to know so well sharing duties at uTorrent. Here we have Bram Cohen, Matt Mason and of course former uTorrent Co-Founder and CEODaniel Ek (still prominently displayed).
In many ways both Ek and Dotcom represent the same devaluation and destruction of the arts by building personal fortunes as the result of monetizing the work of creators, without paying those creators for their work.
The cost of music is not in the distribution of music, the cost of music is in the creation of music.
Megaupload and uTorrent have monetized the mass scale distribution of infringing works for profit. In other words, infringement as a business model where the cost of goods goes unpaid and creators are uncompensated. uTorrent is self described as “a free-of-charge, ad-supported, closed source BitTorrent Client.” Megaupload and uTorrent have both relied heavily on advertising for revenue.
All of this of course points to the fact that Megaupload and BitTorrent have hidden behind the DMCA, which has failed at it’s intent to protect artists. It could be argued that uTorrent and Megaupload have participated in business models enabling one of the largest transfers of wealth in history from individual creators to Silicon Valley companies and operatives.
Daniel Ek is reported to have a net personal wealth valued at $400 Million Dollars. Kim Dotcom’s fortune has been recently estimated to be $200 Million Dollars.
“The main reason music streaming services are winning over millions of consumers is the fact that they require no payment unless the user desires to pay.” – Music Streaming vs. Music Piracy | Medium.Com
Right now there is little functional difference to most musicians between music streaming and music piracy. This realization should not come as a surprise to musicians when they learn that the CEO of the largest and most used on demand streaming company was both the Co-Founder and CEO of uTorrent, “the world’s most popular BitTorrent client with more than 100 million downloads.”
If Spotify wants musicians to take it seriously, perhaps it’s time for a CEO musicians can respect. The record industry might also want to reconsider who it chooses as friend and foe as well. More on that later…
By selling advertisements and premium subscriptions, Megaupload brought in an estimated $175 million. It became one of the most frequented sites on the Internet. How did it get so popular and profitable? According to federal authorities, by also allowing users to illegally share the hottest new movies, or hit songs, or TV programs, including some CBS shows.
Shawn Henry: Megaupload knowingly created and facilitated the distribution of stolen property.
Shawn Henry is former executive assistant director of the FBI. He was responsible for the Megaupload investigation.
Shawn Henry: No different than if somebody has a warehouse where stolen property is being dropped off. If you created the environment that facilitated it, and you encouraged it, and you incentivized people by paying them to drop off stolen property, I think that you are complicit.
In its indictment, the Justice Department calls Megaupload a “Mega Conspiracy”… a “worldwide criminal organization whose members engaged in criminal copyright infringement and money laundering on a massive scale…”
Feds lay it all out: Megaupload made $150+ million, and Dotcom must stand trial.
The government’s 191-page “Summary of Evidence” also details the stunning sums that Dotcom and his colleagues made running their site. Dotcom, who owned 68 percent of Megaupload and all of sister site Megavideo, made more than $42 million in calendar year 2010. CTO Mathias Ortmann, who owned 25 percent share of Megaupload, made more than $9 million that same year; designer Julius Bencko (2.5 percent) made more than $1 million, and programmer Bram Van Der Kolk (also 2.5 percent) made more than $2 million. Chief Marketing Officer Finn Batato, who was not a shareholder, made $400,000. And no perk was too excessive: the company spent $616,000 renting Mediterranean yachts.
We’ve recently posted about the number of artists speaking out about being exploited by internet corporations. Here are some recent rumblings from across the pond…
Former Longpigs star and current co-CEO of Featured Artists Coalition Crispin Hunt calls for labels to reveal Megaupload mogul ‘as the self-interested privateer that he is’
“No artist with anything worth saying wants to live in a medieval world of cottage industry that Kim Dotcom and co prescribe, retraining as a plumber in the day and making bedroom albums, uploaded to an ocean of mediocrity along with the 10,000 other works of genius uploaded to SoundCloud every day, eking a living from selling CDs and t-shirts at poorly-attended gigs, peopled by an audience of well-wishing friends, who all crowdfunded their mates’ albums, exhausted at the choice of 30 gigs a night to see in Norwich alone, and bored by the endless tours of ageing dads on stage who would much rather be settled down watching Later with the kids than donning Paul Weller-style Indie Man Hair and flogging around the toilets of Britain in a splitter, whilst some kid rips the life-work of their youth from HulkShare because he wants to spend his money on Gran Turismo 25.”
Rene Summer posted the article “Stop treating symptoms and start curing diseases” on The Networked Society Blog where he re-hashed the same incorrect talking points that the internet industry “Merchants Of Doubt” have been trying to pedal for a while. As much as it may have been fair to make these arguments in 2003, it’s a more than a bit silly to propose the same talking points a decade later.
Rene writes:
This reliance on enforcement to protect old technologies (read physical distribution) and old business models is the root cause of the market-supply failure problem. It results in insufficient access to lawful digital content and its symptoms are illegal access. The causation works even the other way around increasing availability of lawful digital content also leads to decreased frequency in accessing illegal content.
The idea that there is a lack of new business models and legal distribution to address consumer habits of all kinds across many platforms is just as ridiculous coming from Rene as it was coming from Kim Dotcom earlier this year where it was also shown to be false.
The one thing that becomes clear is that all legal services have one major disadvantage, payment.
“It’s not that this participant is bad at math,” Juenger wrote. “This person did not want the pay-tv product, plain and simple.”
So let’s get honest about “business models” and recognize that there is a competitive advantage to companies who do not have to pay for the cost of goods and by extension, not pay the creators for their work.
Here’s our complete breakdown as originally posted in our response to Kim Dotcom. That’s some kind of company to keep Rene…
Kim Dotcom’s “End Of Piracy”, that was easy…
In the anticipation of the announcement of the new Mega launch, Pat Pilcher at The New Zealand Herald wrote an article titled “Kim Dotcom on Ending Piracy” in which the journalist listed Mr.Dotcom’s five steps to ending piracy. Pilcher writes,
As ironic as that may sound, Kim Dotcom’s logic is inescapably robust. Here’s what his end to piracy manifesto says:
1. Create great stuff 2. Make it easy to buy 3. Same day worldwide release 4. Fair price 5. Works on any device
Looking at what Kim is saying, the 5 points seem pretty obvious, although each could quickly get bogged down once Hollywood gets involved.
So let’s look at these one by one.
1. Create Great Stuff
Well, that’s a no brainer. The content industries create the most prized and sought after “stuff” in the world including films such as Avatar, The Avengers, and The Dark Night Rises as well as franchises like Iron Man, Transformers, Harry Potter and others. Music artists include the likes of Adele, The Black Keys, Taylor Swift, The Beatles and countless others. Making great stuff has never been a problem.
2. Make It Easy To Buy
Another no brainer. Perhaps a decade plus ago this might have been an argument, but not today. There are over 500 legal and licensed music services alone. For the film industry there are services like Netflix, Vudu and Cinemanow as well as other direct to home video on demand providers that give consumers more access to more content across more platforms than at any time in history.
3. Same Day World Wide Release
For music this is more less the standard now and is also more and more common for feature film releases as well. This is a common practice for the largest and most anticipated releases of music and films, the “stuff” that is the most aggressively pirated. For smaller indie releases this may not always be possible but than again I’m not sure that the problem we are combating is in Nigeria on indie rock albums and movies that are more or less film festival darlings.
4. Fair price
Done. Netflix is $7.99 a month for unlimited access to it’s entire library of films and tv shows. Spotify is $9.99 for unlimited access to it’s entire library which consist of probably 95% of every known recording in print. Add to this the cost of a song download is 99 cents. Less than the cost of a candy bar. Renting a movie from a video on demand service ranges from 3.99 to 5.99. Price is no longer an issue and has not been for years.
5. Works on Any Device
Music is DRM free and has been for at least half a decade. Streaming Services such as Netflix and Spotify are also available on every major platform including not only Mac and PC computers, but also mobile devices such as smart phones and tablets by a variety of manufacturers. Additionally most new video game consoles and blu-ray players also include many of these same apps.
Well there it is, RIANZ’s response in full. I can’t argue with much that they’ve said, as they’ve pretty much complied with most of Kim’s 5 points.
So Kim Dotcom’s five suggestions have been fulfilled and yet, I don’t think we’ll see an end to piracy anytime soon. There is still one thing piracy offers that legal, licensed and legitimate services do not, and that is compensation to the artists, musicians, filmmakers and creators which requires that consumers actually do pay the fair price asked.
It’s all pretty simple and by Kim Dotcom’s own suggestions and admission it’s pretty clear where the problem is from here on out, and it’s not in his five suggestions…
The Trichordist 
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