The pre-release leak of four Game of Thrones episodes, early 2015, is one of the most prominent piracy cases in TV history.

The first copies, leaked from a review screener, quickly spread across public torrent sites and were downloaded millions of times.

HBO was understandably upset and feared that the leaks would hurt their bottom line. While that was not immediately apparent after the official premiere, new research suggests that they had a significant impact. And not just on Game of Thrones.

A new working paper published by economy researcher Wojciech Hardy of the Institute for Structural Research and the University of Warsaw carefully dissected the aftermath.

The findings show that the pre-release leaks triggered more people to pirate, and not just the four leaked episodes. This led to a decrease in expected viewers for Game of Thrones, but also for comparable TV-shows.

“The general conclusion is that the leak provided a strong incentive for some of the viewers to look for unauthorized sources for TV shows and that, in consequence, some of them started watching TV shows through unauthorised channels in general,” Hardy tells TorrentFreak.

The reasoning behind this effect is that the leaks introduced some people to these unauthorized sources for the first time. They then kept using these for subsequent episodes.

Ratings, viewership and predicted viewership.

For his research, Hardy used an extensive dataset of US TV-viewership of a variety of shows over time, as well as related Google search data. This revealed that other series, similar to Game of Thrones, were negatively impacted too, compared to a control group.

“Importantly, a negative shift in viewership was found, evidenced both by a drop in the viewership of GoT and by a decline in the viewership of TV shows that share an audience with GoT,” Hardy writes in the paper.

This makes sense, as newcomers to pirate sites are likely to use them for other content as well. That this appears to be a direct effect of the leaks is evidenced by the fact that the decrease in expected viewership wasn’t visible for unrelated TV-shows.

The findings are backed up by Google search data too. Following the pre-release leaks, Google search phrases linked to unauthorized viewing (such as ‘show_name watch online’) gradually increased for GoT-related shows, relative to a control group.

The key message of the current research, according to Hardy, is that even temporary piracy incentives such as pre-release leaks can have long-term effects. They only affect a small percentage of the total audience, but every lost viewer costs money.

This is bad news for HBO and others who have been in a similar situation. However, the data also shows that there may be a promotional effect, possibly because people discover new shows.

As searches for unauthorized sources increased, the viewership of GoT-like shows slowly recovered. This suggests that there may be a promotional piracy effect, where people start to watch shows legally after discovering them on pirate sites.

“On the one hand, this means that the content providers should pay much attention not to incentivize their audience to switch to unauthorized sources to avoid losses,” Hardy says.

“On the other hand, it’s possible that adequate promotional incentives might convince some of the ‘pirates’ to switch to the authorized distribution channels instead, he adds.”

Follow-up studies may provide more clarity on this and other effects.

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A copy of the full working paper, titled Pre-release leaks as one-time incentives for switching to unauthorised sources of cultural content, is available here (pdf).

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After successful applying for ISP blocks against dozens of traditional torrent and streaming portals, Village Roadshow and a coalition of movie studios switched tack last year.

With the threat of pirate subscription IPTV services looming large, Roadshow, Disney, Universal, Warner Bros, Twentieth Century Fox, and Paramount targeted HDSubs+ (also known as PressPlayPlus), a fairly well-known service that provides hundreds of otherwise premium live channels, movies, and sports for a relatively small monthly fee.

The injunction, which was filed last October, targets Australia’s largest ISPs including Telstra, Optus, TPG, and Vocus, plus subsidiaries.

Unlike blocking injunctions targeting regular sites, the studios sought to have several elements of HD Subs+ infrastructure rendered inaccessible, so that its sales platform, EPG (electronic program guide), software (such as an Android and set-top box app), updates, and sundry other services would fail to operate in Australia.

After a six month wait, the Federal Court granted the application earlier today, compelling Australia’s ISPs to block “16 online locations” associated with the HD Subs+ service, rendering its TV services inaccessible Down Under.

“Each respondent must, within 15 business days of service of these orders, take reasonable steps to disable access to the target online locations,” said Justice Nicholas, as quoted by ZDNet.

A small selection of channels in the HDSubs+ package

The ISPs were given flexibility in how to implement the ban, with the Judge noting that DNS blocking, IP address blocking or rerouting, URL blocking, or “any alternative technical means for disabling access”, would be acceptable.

The rightsholders are required to pay a fee of AU$50 fee for each domain they want to block but Village Roadshow says it doesn’t mind doing so, since blocking is in “public interest”. Continuing a pattern established last year, none of the ISPs showed up to the judgment.

A similar IPTV blocking application was filed by Hong Kong-based broadcaster Television Broadcasts Limited (TVB) last year.

TVB wants ISPs including Telstra, Optus, Vocus, and TPG plus their subsidiaries to block access to seven Android-based services named as A1, BlueTV, EVPAD, FunTV, MoonBox, Unblock, and hTV5.

The application was previously heard alongside the HD Subs+ case but will now be handled separately following complications. In April it was revealed that TVB not only wants to block Internet locations related to the technical operation of the service, but also hosting sites that fulfill a role similar to that of Google Play or Apple’s App Store.

TVB wants to have these app marketplaces blocked by Australian ISPs, which would not only render the illicit apps inaccessible to the public but all of the non-infringing ones too.

Justice Nicholas will now have to decide whether the “primary purpose” of these marketplaces is to infringe or facilitate the infringement of TVB’s copyrights. However, there is also a question of whether China-focused live programming has copyright status in Australia. An additional hearing is scheduled for May 2 for these matters to be addressed.

Also on Friday, Foxtel filed yet another blocking application targeting “15 online locations” involving 27 domain names connected to traditional BitTorrent and streaming services.

According to ComputerWorld the injunction targets the same set of ISPs but this time around, Foxtel is trying to save on costs.

The company doesn’t want to have expert witnesses present in court, doesn’t want to stage live demos of websites, and would like to rely on videos and screenshots instead. Foxtel also says that if the ISPs agree, it won’t serve its evidence on them as it has done previously.

The company asked Justice Nicholas to deal with the injunction application “on paper” but he declined, setting a hearing for June 18 but accepting screenshots and videos as evidence.

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Virtually every piece of software is cracked and made available on the Internet, through a myriad of pirate sources.

These are generally visited by regular people out to save a few bucks, but according to Quest Software, pirated license keys found their way to Nike’s office as well.

The company, known for developing a variety of database software, filed a lawsuit in an Oregon federal court this week, accusing Nike of copyright infringement. Both parties have had a software license agreement in place since 2001, but during an audit last year, Qwest noticed that not all products were properly licensed.

“That audit revealed that Nike had deployed Quest Software Products far in excess of the scope allowed by the parties’ SLA,” Quest writes in their complaint, filed at a federal court in Oregon.

Quest keeps a database of all valid keys and found that Nike used “cracked” versions, which are generally circulated on pirate sites. This is something Nike must have been aware of, it adds.

“The audit also revealed that Nike had used pirated keys to bypass the Quest License Key System and made unauthorized copies of certain Quest Software Products by breaking the technological security measures Quest had in place,” Quest writes.

“Upon information and belief, to obtain a pirated key for Quest Software Products, customers must affirmatively seek out and obtain pirated keys on download sites known to traffic in counterfeit or illegally downloaded intellectual property, such as BitTorrent.”

Pirated keys?

When the software company found out, it confronted Nike with the findings. However, according to the complaint, Nike refused to purchase the additional licenses that were required for its setup. This prompted Quest to go to court instead.

At this point, it’s not entirely clear to Quest how many pirated keys were used on Nike computers. That’s something the company would like to find out during the discovery process.

Quest is certain, however, that its customer crossed a line. It accuses Nike of copyright infringement, breach of contract, and violating the DMCA’s circumvention provisions.

The company requests an injunction restraining Nike from any infringing activity and demands compensation for the damages it suffered as a result. The exact height of these damages will have to be determined at trial.

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A copy of the complaint is available here (pdf).

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Back in 2016, an article appeared in Kiwi media discussing the rise of a new company pledging to beat media giant Sky TV at its own game.

My Box NZ owner Krish Reddy told the publication he was selling Android boxes loaded with Kodi software and augmented with third-party addons.

Without any hint of fear, he stated that these devices enabled customers to access movies, TV shows and live channels for free, after shelling out a substantial US$182 for the box first, that is.

“Why pay $80 minimum per month for Sky when for one payment you can have it free for good?” a claim on the company’s website asked.

Noting that he’d been importing the boxes from China, Reddy suggested that his lawyers hadn’t found any problem with the business plan.

“I don’t see why [Sky] would contact me but if they do contact me and … if there’s something of theirs that they feel I’ve unlawfully taken then yeah … but as it stands I don’t [have any concerns],” he said.

At this point, Reddy said he’d been selling the boxes for just six weeks and had shifted around 80 units. To get coverage from a national newspaper at this stage of the game must’ve been very much appreciated but Reddy didn’t stop there.

In a bulk advertising email sent out to 50,000 people, Reddy described his boxes as “better than Sky”. However, by design or misfortune, the email managed to land in the inboxes of 50 Sky TV staff and directors, something that didn’t go unnoticed by the TV giant.

With Reddy claiming sales of 8,000 units, Sky ran out of patience last April. In a letter from its lawyers, the pay-TV company said Reddy’s devices breached copyright law and the Fair Trading Act. Reddy responded by calling the TV giant “a playground bully”, again denying that he was breaking the law.

“From a legal perspective, what we do is completely within the law. We advertise Sky television channels being available through our website and social media platforms as these are available via streams which you can find through My Box,” he said.

“The content is already available, I’m not going out there and bringing the content so how am I infringing the copyright… the content is already there, if someone uses the box to search for the content, that’s what it is.”

The initial compensation demand from Sky against Reddy’s company My Box ran to NZD$1.4m, around US$1m. It was an amount that had the potential rise by millions if matters got drawn out and/or escalated. But despite picking a terrible opponent in a battle he was unlikely to win, Reddy refused to give up.

“[Sky’s] point of view is they own copyright and I’m destroying the market by giving people content for free. To me it is business; I have got something that is new … that’s competition,” he said.

The Auckland High Court heard the case against My Box last month with Judge Warwick Smith reserving his judgment and Reddy still maintaining that his business is entirely legal. Sales were fantastic, he said, with 20,000 devices sold to customers in 12 countries.

Then something truly amazing happened.

A company up to its eyeballs in litigation, selling a commodity product that an amateur can buy and configure at home for US$40, reportedly got a chance of a lifetime. Reddy revealed to Stuff that a Chinese investor had offered to buy his company for an eye-watering NZ$10 million (US$7.06m).

“We have to thank Sky,” he said. “If they had left us alone we would just have been selling a few boxes, but the controversy made us world famous.”

Reddy noted he’d been given 21 days to respond to the offer, but refused to name the company. Interestingly, he also acknowledged that if My Box lost its case, the company would be liable for damages. However, that wouldn’t bother the potential investor.

“It makes no difference to them whether we win or lose, because their operations won’t be in New Zealand,” Reddy said.

According to the entrepreneur, that’s how things are playing out.

The Chinese firm – which Reddy is still refusing to name – has apparently accepted a counter offer from Reddy of US$8.8m for My Box. As a result, Reddy will wrap up his New Zealand operations within the next 90 days and his six employees will be rendered unemployed.

Given that anyone with the ability to install Kodi and a few addons before putting a box in the mail could replicate Reddy’s business model, the multi-million dollar offer for My Box was never anything less than a bewildering business proposition. That someone carried through with it an even higher price is so fantastic as to be almost unbelievable.

In a sea of unhappy endings for piracy-enabled Kodi box sellers globally, this is the only big win to ever grace the headlines. Assuming this really is the end of the story (and that might not be the case) it will almost certainly be the last.

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For several years vKontakte, or VK, has been marked as a notorious piracy facilitator by copyright holders and even the US Government.

Like many other user-generated content sites, Russia’s largest social media network allows its millions of users to upload anything, from movies and TV shows to their entire music collections.

However, copyright holders have often claimed that, unlike its competitors, the site lacks proper anti-piracy measures.

“vKontakte’s ongoing facilitation of piracy causes very substantial damage,” the RIAA complained two years ago, and more recently the IIPA labeled the site as a “major infringement hub for illegal film materials.”

As a result of the ongoing critique, particularly from the movie industry, the US Trade Representative included VK in its most recent list of notorious pirate sites. While this isn’t the first time that VK has ended up there, it’s an intriguing position considering the praise the social network received from the music business this week.

After several major labels reached licensing agreements with VK in 2016, it has transformed from one of the music industry’s largest foes to a rather helpful friend. This milestone was clearly marked in IFPI’s most recent Global Music Report, which was just released.

“[Russia has] become an interesting market. The local services are meaningful now, and VKontakte has gone from being the number one most notorious copyright infringer to being a positive contributor,” says Dennis Kooker, Sony Music’s President Global Digital Business.

Moving from a site that does substantial damage to being a positive contributor is quite a feat, something that’s also highlighted by Warner Music’s Head of Digital Strategy, John Rees.

“We’re starting to see encouraging growth in a number of markets which historically have been completely overwhelmed by piracy,” Rees says.

“We work with VKontakte, which last year launched a licensed music service that’s helping unlock the Russian market alongside our other paid streaming partners such as Apple Music, Yandex and Zvooq. There’s huge potential in Russia, and, considering the population size, we’ve only recently begun to scratch the surface,” he adds.

This means that the same platform that helps the music industry to grow in Russia is seen as a notorious pirate site by Hollywood and the US Government, which mention it in the same breath as The Pirate Bay.

The music industry’s positive signals haven’t gone completely unnoticed by the US Trade Representative. However, it believes that the social media platform should help to protect all copyright holders.

“VK continues to be listed pending the institutionalization of appropriate measures to promote respect on its platform for IPR of all right holders, not just those with whom it has contracts, which are comparable to those measures used by other social media sites,” USTR wrote a few weeks ago.

In recent years VK has implemented a wide variety of anti-piracy measures including fingerprinting techniques but, apparently, more is needed to appease the movie industry.

While the music industry can scrap VK from the piracy agenda, it still has plenty of other worries. IFPI’s Global Music Report highlights the “value gap” as a major issue and stresses that stream-ripping is the fastest growing form of music copyright infringement.

The shutdown of YouTube-MP3.org in 2016 is highlighted as a major success, but there’s still a long way to go before piracy is a problem of the past, if it ever will be.

“The actions taken by the industry are having a positive impact and reducing stream ripping across major music markets. However, the problem is far from solved and we will continue to take on these illegal sites wherever they are operating around the world,” IFPI’s Frances Moore says.

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