For a few years now, BitTorrent Inc. has done its best to position the company as a neutral and legitimate business.

In a recent interview with “That Was Me”, BitTorrent inventor Bram Cohen explained this challenge, as well as the general benefits BitTorrent has to offer.

The interview got some coverage here and there, including at Upstart, where it drew the attention of Robert Steele, Chief Technology Officer at anti-piracy outfit Rightscorp, a company that has made quite a few headlines this year.

Steele was not happy with the positive press coverage BitTorrent received from the media outlets, to say the least. Through Facebook (which uses BitTorrent) he wrote two responses to the article, which are worth repeating for a variety of reasons.

The comments appear to have been made late at night, possibly under influence, so we have left them intact and unedited for authenticity’s sake. Steele starts off by claiming that BitTorrent was designed for only one reason – to distribute pirated content.

“Absolutely ridiculous. Bram Cohen said in 2012 that ‘my goal is to destroy television’. BitTorrent’s architecture and features are designed for one reason only – to assist people in avoiding legitimate law enforcement efforts when they illgally consume other people’s intellectual property,” Steele begins.

It may not come as a surprise that Steele is quoting Cohen out of context. At the time, BitTorrent’s founder was actually referring to his new streaming technology, that would make it possible for anyone to stream video content to a large audience at virtually no cost.

Also, BitTorrent isn’t in any way helping people to avoid law enforcement, quite the contrary. People who use BitTorrent are easy to track down, which is in fact something that Rightscorp is banking its entire business model on.

In the second comment Steele brings in Accel, the venture capital firm that invested millions of dollars in BitTorrent Inc. According to the Rightscorp CTO Accel is also guilty of encouraging piracy, and he suggests that uTorrent should have been equipped with a blacklist of pirate torrent hashes.

“If Accell Partner’s BitTorrent was actually a legitimate business not directly involved in driving and facilitating piracy, they would have a blacklist of copyrighted hashes that the BT client won’t ‘share’. Dropbox does this. Why does Dropbox do this? Because they actually obey the law and respect content creators,” Steele says.

Steele touches on a sensitive subject here, as BitTorrent could indeed implement a blacklist to prevent some pirated content from being shared. TorrentFreak has raised this issue with BitTorrent Inc in the past, but we have never received a response on the matter.

Moving on from this sidetrack, Steele’s tirade in the first comment evolves into something that’s scarily incomprehensible.

“BTTracker software is not needed unless the goal is to enable other people outside of BitTorrent, Inc. to operate the systems that log the ip addresses of infringing computers. Why do they do it that way? Not becuase it is needed to move big files. Dropbox doesnt need trackers. They do it that way because Limewire got sued for hosting those lists.” Steele notes.

From what we understand, Steele doesn’t get why BitTorrent is decentralized, which is the entire basis of the technology. The comment is wrong on so many points that we almost doubt that Steele has any idea how BitTorrent works, or Limewire for that matter.

We surely hope that the investors in Rightscorp, which is a publicly traded company now, aren’t reading along.

Finally, Rightscorp’s CTO suggests that BitTorrent and its backers should be taken to court, to pay back the damage they cause to the entertainment industries.

“Bram Cohen and Accell Partner’s BitTorrent should be held accountable for the wages and income they have helped take from hundreds of thousands of creative workers just like Limewire, Grokster, Aimster, Kazaa and Napster were.”

Right.

From the incoherent reasoning and the many grammar and spelling mistakes we have to assume that Steele wasn’t fully accountable when he wrote the comments. Perhaps the end of a busy week, or the end of an eventful night.

In any case, we’ve saved a copy of the comments below, just in case they are accidentally deleted.

Steele’s comments

Photo: Michael Theis

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

Reports, research and surveys covering piracy-related issues have been released in their dozens in recent years, with many of them painting a picture of two distinct groups of people – those who illegally download and those who pay for content.

Of course, the reality is that many people who obtain content for free also cheerfully pay for content too. In fact, some studies have found that the entertainment industry’s best customers are also illegal downloaders.

But what if there was evidence to suggest that some of those pirates were actually the very people helping to create movies and TV shows? That’s one of the intriguing findings of a survey carried out by Stephen Follows, a writer and producer with a keen interest in discovering what makes the industry tick.

“Many of the decisions in the film business are based on gut, opinion and gossip so I find it fascinating to research the topics and see what the numbers say,” Follows informs TorrentFreak.

“Piracy seemed like a ready topic to research so I added a few question into a survey I ran of 1,235 film industry professionals. The respondents were all people who had been to one of the three major films markets in the past five years – Cannes, Berlin or the American film Market.”

Follows first set of questions focused on whether the film professionals felt that piracy had affected their business. The responses were then split by industry sector and budgets the professionals work to.

Considering the anti-piracy rhetoric coming out of Hollywood during the past thirty years, it’s perhaps surprising that 53% of all respondents said that piracy had either no effect or a positive effect on their business.

Respondents were from all sectors of the industry including development, production, post-production, sales and distribution, exhibition and marketing. When the responses from each sector are broken down, one can see that respondents in sales and distribution – arguably the role that file-sharing fulfills – say they are most worried by piracy.

Turning the tables to discover how the industry professionals are themselves affecting piracy rates couldn’t be approached directly for obvious reasons, so Follows tried a different tactic.

“When it came to researching how many of them actually illegally download movies I felt I needed to be a bit sneaky,” he told TF.

“To one randomly assigned set of participants I presented three statements
about the industry (such as ‘I prefer to watch films on DVD than in the cinema’). I then asked the respondent how many of the three statements they agreed with, but only asking for the combined total (i.e. ‘I agree with two of the three statements’).”

“Then, to a different randomly assigned set I offered the same three statements with the additional statement ‘I have illegally downloaded a TV show or feature film’. By subtracting the average number of agreed-with statements from the average of the control group I was able to calculate the percentage of people who agreed with the additional statement.”

As can be seen from the diagram, 39% of the industry respondents admitted to illegally downloading video content, with 61% claiming never to have done so. Interestingly, respondents working on lower budgets were more likely to have illegally downloaded than those working on big budgets.

“Only 2% of people working on films over $10 million admitted to illegally downloading a film or TV show, compared with 65% of those working on films under $1 million,” Follows explains.

Also of interest is how the percentage of those who admitted illegal downloading fluctuated according to industry sector, with 55% of those in marketing saying they have grabbed movies or TV shows without paying versus zero percent in exhibition (movie theaters).

Sales and distribution, the sector that said they’d been most affected by piracy, accounted for the next lowest piracy ‘confession’ rate of 28%.

“These are the middlemen behind the scenes of the industry who negotiate the rights between producers and cinemas/retailers. They are part of the reason why there are so many damned logos at the start of every movie,” Follows explains.

“They have the largest vested interest in stopping piracy as they don¹t have many other reasons for doing what they do (unlike filmmakers who might be wanting to create art/entertainment) and no other source of income, unlike cinemas who make a fortune on Coke/popcorn etc.”

Further reading on Stephen Follows’ research and methodology can be found here and here. A great video he produced for Friends of the Earth can be watched on Vimeo.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

Hurting the revenue streams of infringing sites has become a prime anti-piracy strategy for the entertainment industries in recent months.

By cutting off revenue through deals with payment providers and advertising agencies, they hope to make it less profitable to operate these sites.

This is not an easy task, as there are many advertising companies who are still eager to team up with “rogue” torrent sites and streaming portals. Likewise, site owners often implement tricks to hide the site where the ads are displayed.

As a result, several major brands see their ads showing up on sites they don’t want to be associated with. A few weeks ago a report from the Digital Citizens Alliance revealed that companies such as Amazon, American Express, Dell, Ford, Lego, McDonalds, Xfinity are contributing to the problem.

These problematic ad placements were also highlighted by a publication of the Australian media and entertainment group mUmBRELLA, which focused on ads appearing on streaming portals such as watchseries.lt and videoweed.es. The report shows that American Express and other brands had their ads on display, and that the companies were asked for comment.

As expected, none of the major brands said it willingly promoted its products through these pirate sites. However, the explanations that were given varied, and the response from American Express was the most intriguing of all.

The payment processor’s media agency Mindshare says that the ads in question weren’t real ads at all. Instead, American Express accuses the pirate sites of “photoshopping” their banners into their designs, to increase site credibility.

AmEx on Videoweed

Timothy Whitfield, general operations director at the responsible advertising placement outfit Xaxis, confirms this suspicion.

“Now when we dug into it what happened is that in some cases they were using basic photoshopping skills to take an old creative from Amex and building it into the homepage and into the video leads and on the homepage of the website,” Whitfield said

“It wasn’t a real creative it was just someone who had photoshopped it into the site. Now the reason that we think they were doing that is that they were working very hard to make themselves look like a reputable website,” he ads.

While this type of banner ‘theft’ is certainly an option, TorrentFreak was unable to replicate the finding from a wide variety of locations. It is also unclear why the sites in question would give up valuable advertising placements. There is hardly any positive effect on the site’s reputation when it’s not done structurally.

The insurance company Allianz was also caught advertising on pirate sites, but here the explanation was a more common one. According to Whitfield, Xaxis didn’t place the ad directly, but instead it loaded through several iframes thereby disguising the website where it appeared.

Through this “nesting” technique pirate sites can trick advertising agencies and have higher paid ads.

“Every man and his dog blocks these websites – Watchseries.it, Videoweed etc. – but because you’re seven layers deep you don’t know if it is one you have blocked or not,” Whitfield said in a comment.

Finally, HotelsCombined came up with yet another reason why their banners appeared on infringing websites. Again, without their explicit knowledge.

Kristen McKenzie, global PR and content manager of HotelsCombined, explained that it may have been the result of ad-retargeting. HotelsCombined tracks people who visit their website, and their advertising provider then displays ads on some of the sites these people visit afterwards.

“Our retargeting provider does not disclose their extensive list of networks, and with millions of different sites being accessed simultaneously in real-time, it is ultimately impossible for us to police where retargeting may occur,” McKenzie said.

The above shows that getting rid of banners on rogue sites is proving to be more difficult than simply compiling a blacklist. It’s a cat and mouse game, much like the efforts to go after hosting companies and payment providers. And if pirates are starting to use Photoshop to promote brands for free, it’s never-ending.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

Rolled out to a background of what Kim Dotcom describes as a “failing” criminal process against both him and his former Megaupload associates, earlier this week the MPAA launched yet more litigation.

In a complaint filed at a Virginia District Court, the studios described Megaupload as a business designed and operated with copyright infringement in mind. Over the course of its life the site generated millions of dollars at the expense of the movie industry, the studios say, and for this Dotcom and partners Mathias Ortmann and Bram Van Der Kolk must be held accountable.

But fighting Hollywood is not the only thing that Dotcom has to worry about. In a fresh complaint filed yesterday in Virginia, Warner Music, UMG Recordings, Sony Music and Capitol Records teamed up against Megaupload, Vestor Limited, Kim Dotcom, Mathias Ortmann and Bram Van Der Kolk in pursuit of yet more millions in damages.

The RIAA’s 30-page complaint appears to be substantially the same as that filed by the movie studios, with claims that Dotcom and his associates “actively and intentionally” encouraged users to upload infringing copies of popular content in order to distribute those copies to millions of people without a license.

The complaint, which lists 87 specific copyright works from artists including Justin Bieber, Lady Gaga, Rihanna, Katy Perry, Beyonce, Coldplay and David Guetta, treads familiar ground when it comes to the rewards program Megaupload was said to operate.

“Indeed, for several years, through what it called an ‘Uploader Rewards’ program, Defendants even paid their users to upload popular content that Defendants knew infringed copyrights, until Defendants finally discontinued this program a few months before their indictment,” the RIAA writes.

Unsurprisingly the RIAA heavily references the US Government’s action against Megaupload, noting that in 2011 the site was designated a “notorious market” by the USTR. Of course, just a month later Megaupload was shut down and by the end of January 2012 its operators were being indicted on charges including criminal copyright infringement.

In common with their movie industry counterparts, the RIAA demands a trial by jury on allegations of direct copyright infringement, inducement of copyright infringement, vicarious and contributory infringement against all defendants. Millions of dollars are at stake but Kim Dotcom’s U.S. attorney Ira Rothken believes that the lawsuit will not succeed.

“The RIAA, MPAA, and DOJ are like three blind mice following each other in the pursuit of meritless copyright claims and [an] assault on copyright neutral cloud technology,” Rothken said.

“Megaupload strongly believes it’s going to prevail.”

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

Earlier this week the MPAA filed a lawsuit against Megaupload, Kim Dotcom and two former employees of the defunct file-storage service.

In their complaint the movie studios repeat many of the claims that were laid out in the criminal case while demanding millions of dollars in damages.

But according to Dotcom the lawsuit is just a desperate attempt at an asset-grab by the MPAA because the criminal case against Megaupload is going to fail.

“The criminal case is failing. There will be no extradition. They are now trying to get at our seized assets with civil forfeitures. It’s a move of desperation,” Dotcom tells TF.

MPAA General Counsel Steven Fabrizio disagrees, and has told his side of the story to many news outlets this week. Dotcom and Fabrizio are usually not heard at the same time, but in a rare interview with Radio New Zealand the two bumped heads.

Fabrizio was seemingly under the impression that he was doing a solo interview, but that changed when the reporter informed him that Dotcom was listening in on a second line. When she asked the MPAA lawyer whether he wanted to discuss the case with Dotcom there was a brief silence, but he eventually agreed.

First MPAA’s General Counsel had the opportunity to explain what Megaupload did wrong and why. In line with their complaint, Fabrizio described the file-storage site as a business that was set up to facilitate and encourage copyright infringement.

“Megaupload was never a cloud storage service to begin with,” Fabrizio noted. “From its birth to its death, it was a service that was designed to profit from copyright infringement, and in fact, it did profit handsomely from copyright infringement.”

“The proof of the pudding that it was not a storage service, is that almost 98 percent of the people who used Megaupload were not premium users. If you weren’t a premium user, and your content wasn’t downloaded frequently enough, then Megaupload would delete it,” he added.

Dotcom, who in private refers to the MPAA’s counsel as “Fabricatio,” because he is “script writing and ‘fabricating’ Hollywood’s science fiction lawsuits”, later refuted the claim that Megaupload deleted files uploaded by free users.

“That is a blatant lie,” Dotcom said. “We have not purged any files from Megaupload for many years. If you were a non-premium user and you had an account with us that was free, your files would not be deleted.”

Fabrizio’s second argument was that Megaupload offered a rewards program which encouraged people to share large video files. Again, Dotcom contested this claim by pointing out that people only got paid for files smaller than 100 megabytes. Megaupload’s founder conceded that users could circumvent the limits by uploading split archives, but he stressed that the restriction was specifically put in place to discourage copyright infringement.

The third allegation Fabrizio made was that Megaupload employees had private conversations where they allegedly discussed the “pirate” status of their work.

“Internally they referred to themselves as modern pirates. Some of the employees and some of the co-defendants actually uploaded infringing popular movies themselves, so that they could be downloaded by others,” the MPAA’s top lawyer noted.

Again, Dotcom disagreed and explained that the “pirates” the employee referred to were Steve Jobs and Bill Gates.

“Yeah, well that’s complete nonsense, right. One of our employees who was admin staff and a developer has chatted with our CTO and he watched a documentary called Pirates of Silicon Valley. That was a movie about Steve Jobs and Bill Gates and how they stole the ideas from each other,” Dotcom said.

“He then made this remark to [the CTO] saying we are modern-day pirates, comparing himself to the attitude those guys had, simply because they were copying from each other and we were copying from our competitors and vice versa,” he added.

Responding to the reporter’s question on why he wouldn’t go to the U.S. voluntarily to stand trial, Dotcom said that he offered to do so, but only on the condition that he would get access to his funds as well as bail, which the Department of Justice refused.

The reporter then switched back to Fabrizio, who didn’t seem to believe much of what Dotcom was saying.

“Mr. Dotcom can talk all he wants about his excuses, but the reality is that you can say anything you want if you’re not constrained by the truth of the facts that you’re saying,” Fabrizio said.

Of course, the same also applies to the MPAA and Mr. Fabrizio…

The interview is an intriguing face-off, and the first time ever that the MPAA and Dotcom have gone head-to-head. It probably wont be the last time either, although the venue will very much depend on how the criminal proceedings and the civil case progress.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.