Internet Book Piracy Page 13
“The Association of National Advertisers (ANA) and the American Association of Advertising Agencies (4A’s) strongly believe that U.S. advertisers must have confidence that their ads are not unintentionally providing financial support to, or otherwise legitimizing, “rogue” Internet sites whose primary and apparent purpose is to steal or facilitate theft of the intellectual property of America’s innovators and creators. U.S. advertisers must also have confidence that their corporate brands and images are not being harmed by association with such unlawful activity. In order to help address this complex problem, our Associations believe that our members should each commit to take affirmative steps to avoid placement of their ads on such sites.
“At the outset, we emphasize that this commitment is not intended to foreclose advertising on legitimate social media or user-generated content sites, even if infringing content occasionally appears on such sites. Rather, this commitment addresses “rogue” sites that are dedicated to infringement of the intellectual property rights of others, in that they have no significant, or only limited, use or purpose other than engaging in, enabling or facilitating such infringement.”
To develop the advisory, the Digital Citizens Alliances commissioned the media advisory firm Media Link to prepare the report, which it did by examining the content sites that were ad-supported and had many requests to take down stolen content. Eventually it ended up with 596 content sites, which included both BitTorrent sites like Pirate Bay and video-streaming sites like Alba File. And they looked at the number of ads on the sites, their audience size, and the cost-per-click and per-action pricing models to assess the likely revenue from the ads.90 While this research reflects the extent of the problem, it can also be used as a guide for advertisers to avoid advertising on these sites.
Sometimes just the threat of legal action has worked to get pirates who think they are simply providing a public service to consumers, such as movie fans, to drop out, even though they may still feel that they had noble intentions. As an example, that’s what happened with Popcorn Time, which shut down on March 14, 2014. The basic premise of the site was working with BitTorrent to let users download movies from the web completely free. They also had a large collection of films currently in theaters, even the year’s Oscar winners, which might not later show up on Netflix. So instead of spending $10–$12 to see the movie in theaters, users could see any movie “instantly streamed in perfect high-definition quality,” as described by Taylor Cast in a Huffington Post blog: “Popcorn Time Lets You Watch Any Movie for Free (P.S. It’s Illegal).” And the app was designed much like a Redbox display, letting users readily find what they wanted rather than navigating through a confusing array of torrent sites. In effect, the app made stealing copyrighted material easier than ever, although the Popcorn Time creators thought they were not doing anything illegal, since they didn’t actually host any copyrighted material on their site, and they provided the service free through open source.91
Yet those downloading and watching movies through the site were clearly at risk of being accused of, sued for, or criminally charged with copyright infringement. So shortly after this article about them appeared and Popcorn Time creators were slammed with threats of legal action, they decided to shut down the site, though they left a good-bye message on their website that expressed their view that they were doing nothing wrong. As the message stated:
“Popcorn Time is shutting down today. Not because we ran out of energy, commitment, focus or allies. But because we need to move on with our lives.
“Our experiment has put us at the doors of endless debates about piracy and copyright, legal threats and the shady machinery that makes us feel in danger for doing what we love. And that’s not a battle we want a place in.”92
Still another strategy to combat the pirates, despite the resistance of some judges to the multi-defendant BitTorrent lawsuits, is comprised of the mega-lawsuits, which are even more aggressive in attacking both the downloaders and the owners of the torrent sites.
One example of this is the movie studios suing the defunct Megaupload piracy site, seeking at least $175 million in damages, which the principals allegedly earned from the pirated materials they illegally shared on their cyberlocker site, even though the US law enforcement officials shut down the site in January 2012. The six major film studios—Twentieth Century Fox Film, Disney Enterprises, Paramount Pictures, Universal City Studio Productions, Columbia Pictures Industries, and Warner Brothers Entertainment—filed the complaint on April 7 in the US District Court for the Eastern District of Virginia, and they named as defendants Megaupload Ltd. and its founder Kim Dotcom, Vester, the majority shareholder of Megaupload, Mathias Ortmann, the site’s chief technical officer, and Bram van der Kolk, in charge of programming. A reason for filing the suit is that according to the US government’s indictment of the company, Megaupload not only obtained more than $175 million in proceeds, but they cost copyright owners more than $500 million by “enabling copyright infringement on a massive scale.” It was, according to Steven Fabrizio, the senior executive VP and global general counsel of the Motion Picture Association of America, “the largest and most active infringing website targeting creative content in the world.”93
Another example of this more aggressive attack on the pirates in the courts by the film industry is the Lionsgate lawsuit filed July 31, 2014, in California Federal Court. The suit was filed after learning on July 24 that a digital file with a high-quality reproduction of the film The Expendables 3 had been stolen and uploaded to the Internet, resulting in over one million downloads at the time of its filing.94 Among other things, they demanded a temporary restraining order and injunctions that prohibited the anonymous operators of the sites from “hosting, linking to, distributing, reproducing, performing, selling or making available copies of The Expendables 3.” Moreover, their demands went even further than other lawsuits in seeking to have the defendants prohibited from “operating any of the websites” and ordered to “take all steps necessary to recall and recover all copies of the Stolen Film” as well as any parts of it that they had distributed. Further, Lionsgate sought to prevent the defendants from transferring any of their assets or circumventing the court orders, and they wanted their domain names placed on locked status. Plus, Lionsgate may issue subpoenas to the ISPs providing hosting and cloud storage, as well as to the banks and financial institutions providing support to the torrent sites.95
While the lawsuit didn’t immediately prevent the torrent sites from continuing the downloads, which reached over two million by the following day, it reflects the approach of a major film studio to call for all-out war on the pirates, from those stealing the files to those permitting the downloads and anyone making the film available to spread illegally. For example, the suit targeted ten John Doe torrent downloaders and the owners of the main torrent sites involved in hosting, distributing, or otherwise making available copies of the film, including LimeTorrents.com, BillionUploads.com, HulFile.eu, Played.to, SwantShare.com, and Dotsemper.com. And while other Hollywood studios have gone after the pirates, many feel Lionsgate’s attack takes the war on piracy to a whole new level. As Robin Parrish writes in Tech Times:
“This is hardly the first time a Hollywood studio has gone to war against piracy, but Lionsgate’s lawsuit feels much more stern and resolute than any that’s come before. The very nature of torrent file sharing would seemingly make it all but impossible for a film to be recalled from every computer or hard drive it’s been downloaded to. Yet Lionsgate is adamant that these torrent sites ‘take all steps necessary to recall and recover all copies of [‘The Expendables 3’] or any portion thereof that they have distributed.’”96
The Development of Legitimate Alternatives
However, while one strategy is to defeat the pirates by eliminating the cyberlockers, restricting the sites, seeking damages through litigation, and reducing their profits, another that has proved fairly successful for the film and recording industries has been providi
ng appealing alternate sites where material is available legally and at a low cost. For example, the music industry first created some legal digital access models—such as Spotify, YouTube, VEVO, Pandora, and Rhapsody—that grant consumers access to a legal marketplace for music whenever they want it, sometimes for free, and since 2007 these have gained an increasing proportion of the music marketplace, from 3 percent in 2007 to 15 percent in 2012, according to RIAA statistics.97 At the same time, the RIAA has launched campaigns to not only make the public aware that they are breaking copyright laws when they illegally download and copy music, but also encourage music fans to go to the legal sites, though it has still taken steps to shut down the major piracy sites, such as LimeWire and Kazaa.98 In short, it has combined a carrot and stick approach to provide a user-friendly source of copyrighted material, while finding other ways to strike back at the pirates through reducing their access or shutting down the sites of the biggest offenders.
Likewise, the film industry has taken much the same approach. Private companies are setting up sites like Netflix and Hulu that provide access for subscribers to see newly released or classic films and TV shows on demand, wherever and whenever they want, for a low price or even for free in some cases. For example, Netflix’s service was only $7.99 a month after a one-month free trial when it first started its digital service and phased out its DVD-by-mail service; currently it is only $8.99 a month, allowing users to watch whatever they want, and even share the service with others in their household.
However, in one of the many ironies in the battle against piracy, Netflix is actually looking to the pirates to decide what films and TV shows to add to its service. It regularly checks out the illegal file-sharing platforms to see what is most popular with the online pirates, and the more popular the films and TV shows, the more likely these are to be added to its roster, including its Watch Instantly section.99
And even the major studios regard illegal downloads as a measure of success, as much as they may want to destroy the pirates. For instance, David Kaplan, head of Warner Brothers’ anti-piracy wing, had this to say on the website of the annual Anti-Piracy and Content Protection Summit for 2013: “Generally speaking, we view piracy as a proxy of consumer demand. Accordingly, enforcement related efforts are balanced with looking at ways to adjust or develop business models to take advantage of that demand by offering fans what they are looking for when they are looking for it.”100 In other words, while the companies are still trying to stop illegal file-sharing and regularly monitor the BitTorrent sites, such as Pirate Bay, to identify pirates as the enemy, they are still looking to the pirates for market insights they can use in developing content to appeal to their audience.
Still another example of this trend to find alternate channels: In 2013, the Motion Picture Licensing Corporation (MPLC), representing over four hundred distributors from studios and independent producers and the “world leader in motion picture copyright compliance,” set up a partnership with the Copyright Clearance Center (CCC)—a global rights broker that works with large corporations, research, government, and medical institutions, universities, government agencies, and others—to facilitate the licensing of all types of copyrighted material, including books, ebooks, trade journals, magazine articles, and newspapers. Under this program, the CCC worked with the MPLC to license films and video programs to corporate clients to use in motivating and training employees and appealing to prospective customers.101
The effectiveness of the CCC as an alternative to piracy is reflected in its payout of $1.3 billion in royalties to right holders in the ten-year period from 2003 to 2013.
Intriguingly, the publishing industry has largely been left out of the music and film industry battle, even though publishers and writers are similarly affected by the pirates. Perhaps this lack of involvement has occured because the book writers and publishers are much less organized, and so many writers publish books themselves or give out free content in order to build a platform for convincing agents to represent them and publishers to publish their books.
But now writers and publishers have much to learn from these earlier battles. There seems to be a growing concern, primarily from publishers, to take some action to protect their books, while writers individually feel there is little they can do aside from sending out takedown notices, which they believe have little effect. They feel powerless to do more. After all, they want to write, not spend time locating pirate sites and trying to get their books removed. But now there are some growing alternatives in the form of services that help publishers, writers, and other content creators find the pirates, send them warnings, and even institute litigation against them. The next chapter deals with the way in which the publishers and writers are increasingly fighting back or finding alternative ways to deal with piracy, too.
CHAPTER 12
How Publishers Are Beginning to Battle the Pirates
WHILE THE MUSIC AND FILM industries battled the Internet pirates with lawsuits, legislation, and new marketing models to get consumers to pay for downloading or streaming music and films, publishers were left on the sidelines. But now they seem to finally be ready to do battle. While they have sent out cease and desist letters resulting in some takedowns, now some publishers are acting more aggressively to take on the pirates in court and shut down some of the worst offenders.
The Problem of Book Piracy
Such an effort is long overdue, because individual writers, aside from the most successful, generally don’t have the resources to seriously combat pirates individually. And rampant piracy can not only decimate the earnings of victimized writers, but also undermine the publishing industry’s ability to successfully market and promote its books, leading to fewer professional authors and publishers. As author Karen Dionne writes in “E-Piracy: The High Cost of Stolen Books,” “Lost book sales can’t be quantified, making it impossible to calculate the full cost of e-piracy, but the sheer number of illegal copies available for download gives an idea of the scope of the problem … they still translate into a staggering amount of royalties that have been stolen from authors.” Moreover, if the authors’ sales dry up, so do their prospects for future books. As Dionne observes: “Publishing is a business, and authors whose titles don’t sell well aren’t offered follow-up contracts … Meanwhile, (the authors’) existing titles will likely go out of print, further degrading their bottom line. Even if authors dodge that worst-case scenario and continue to publish, there’s no doubt the widespread availability of illegal digital copies affects their income.”102
But piracy does more than just reduce income. As a growing community of individuals are recognizing, book piracy is not just a cost of doing business but a crime, so writers and publishers need to go after the criminals to seek damages and penalties. As A. Giovanni writes in “Online Book Piracy,” “Among a certain class of online Internet users there is a perception that piracy is acceptable and normal. But, no matter how common it may be, it is certainly not normal. It is theft. It is criminal. It’s extremely costly to copyright holders, and the only way to put an end to this culture of crime and recoup losses is for more authors and publishers to pursue damages and criminal charges against pirates.”103
The Efforts of Publishers to Take Legal Action
Publishers are finally taking action to combat this. One of the first efforts occurred on February 4, 2010, when six publishers of educational, scientific, and professional books—Bedford, Freeman & Worth, an educational publisher and subsidiary of Macmillan, Cengage Learning, Elsevier, McGraw-Hill, Wiley, and Pearson Education—combined together to obtain an injunction against RapidShare, based in Switzerland. They sought an injunction to stop RapidShare from file sharing their works, and in its February 10 judgment, a German court ordered RapidShare to take steps to prevent the illegal file sharing of the 148 copyrighted works cited in the lawsuit. Among other things, the court ruled, “RapidShare must monitor its site to ensure the copyrighted material is not being uploaded and prevent unauthoriz
ed access to the material by its users. The company will be subject to substantial fines for non-compliance.”104 It was, according to an interview with Maria Danzilo, Wiley’s Legal Director, a “great victory” to show pirates that there would be consequences for pirating the work of writers and publishers, who relied on numerous support staff to make a book happen.105 As noted by CEO of the Association for American Publishers Tom Allen, speaking on behalf of the publisher plaintiffs, “This ruling is an important step forward. Not only does it affirm that file-sharing copyrighted content without permission is against the law, but it attaches a hefty financial punishment to the host, in this case RapidShare, for non-compliance. Consider this a shot across the bow for others who attempt to profit from the theft of copyrighted works online.”106
He then went on to elaborate on the importance of legal action to protect writers and publishers from copyright infringement, since otherwise it could lead to fewer books written and published due to the reduced income of the writers and publishers. Or as he put it: