Two decades ago, the music industry was presented with an unprecedented threat. Napster made it possible for the public at large to share tracks with people they didn’t have to meet in person.

While sharing was already commonplace on bulletin boards and IRC, Napster opened it up to an audience of millions.

In the years that followed, torrent sites, download portals, and other pirate services only made things worse. To counter this threat the music industry began filing lawsuits and lobbied for modern anti-piracy laws, which France was one of the first countries to adopt.

Ten years ago the French Government approved the HADOPI law. Among other things, it included a graduated response system where Internet subscribers face fines and even criminal convictions if they get caught repeatedly.

According to initial studies, the legislation wasn’t very effective. However, a new paper set to be published in a forthcoming issue of the academic journal Information, Economics and Policy, sings a different tune.

To measure the impact of Hadopi on music consumption, KU Leuven researcher Ruben Savelkoul analyzed music sales in France during the years following the introduction of the law and compared that data with sales in Belgium and the Netherlands.

The research specifically looks at digital download purchases during the early years of Hadopi. The results, shared in an article titled “Superstars vs the Long Tail”, shine an interesting light on the potential impact the anti-piracy law had during this time.

One of the main findings is that Hadopi had a positive effect on the sales of digital music tracks in France compared to the two control countries. This effect was the strongest for popular artists.

In addition, the findings suggest that the effect of Hadopi on sales decreased over time, except for bigger artists.

“The introduction of the Hadopi anti-piracy law in France had a positive effect on sales for all artists, superstars as well as artists lower in the sales distribution,” Savelkoul writes.

“The effect is stronger for superstars, suggesting that smaller or niche artists gain exposure from illegal downloading, partly offsetting the negative substitution effect on sales,” he adds.

The weaker effect on smaller artists suggests that these may also see some benefits from piracy. For example, because piracy allows music fans to discover new content more easily.

This leads to the second hypothesis tested by Savelkoul. Did the anti-piracy measures lead to a reduction in variation when it comes to music consumption? This indeed turned out to be the case.

“We found that in the absence of piracy, consumers tend to concentrate more on genre and style,” Savelkoul writes.

The researcher suggests that piracy makes it easier to discover newer music. As a result, people consume more different types of music. Stricter anti-piracy measures limit this effect and as a result music fans buy more ‘popular’ music.

“In absence of the possibility to sample ‘adventurous’ music, consumers might not be willing to pay and purchase these music items to discover its quality and instead opt for ‘safer’ purchases, thus consuming less variety,” Savelkoul notes.

Overall, the findings suggest that stricter anti-piracy measures can positively impact digital sales revenue. At the same time, however, they decrease variation in music consumption.

While these are intriguing findings, the paper’s author cautions against generalizing the results. The findings only cover a relatively short period of a few years. In the long run, the effect may be different.

In addition, the research only looks at digital music sales. It’s unclear what the effect is on touring revenue for example. Related research has found that revenue from live performances is growing for smaller artists and Savelkoul suggests that piracy may have a net positive effect for this group.

Finally, it’s worth noting that the music industry has changed quite a bit since the introduction of Hadopi. Streaming subscriptions are now the main digital revenue source, which has made it easier for consumers to discover new content. As such, the ‘discovery’ benefit of piracy may not be the same today.

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A copy of the article titled “Superstars vs the Long Tail: How Does Music Piracy Affect Digital Song Sales for Different Segments of the Industry?” can be found behind a paywall.

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When a massive police operation in Italy took down IPTV management outfit Xtream-Codes in September 2019, a large proportion of the pirate market was thrown into turmoil.

According to figures obtained by TorrentFreak from network equipment company Sandvine, overall pirate streaming traffic dropped by 50%. But three months is an awfully long time on the Internet and today the market seems to have largely recovered, with providers and sellers finding alternative solutions and users relatively happy once again.

Nevertheless, when chaos reigned back in September, there can be little doubt that customers left high and dry turned to search engines in order to find a replacement. It’s certainly not the best strategy to find a reliable supplier but if Comcast-owned broadcaster Sky has anything to do with it, it won’t be an easy option either.

Back in March, we reported that the broadcaster had been sending thousands of takedown notices to Google in an effort to remove IPTV suppliers’ entire websites from the search provider’s indexes. That effort has not only continued but also been stepped up in recent weeks.

Just as an example, a notice sent in November contains 495 URLs and attempts to delist the entire websites of three suppliers – miglioriptv.net, iptvthebest.ws, migliorstreaming.net – from Google. But that is just the tip of a pretty large iceberg.

The delisting efforts are considerable and target many thousands of URLs (e.g 1,2,3,4). The majority of notices were previously filed on behalf of Sky in Italy but Sky in the UK are also getting in on the act.

As the notice above shows, Sky UK goes down the classic route of claiming that the sites in question directly infringe its rights by providing access to its licensed content. While that may be the case in some instances, it’s far more likely that the services use completely different URLs to deliver that content so at best, the above domains might be considered as facilitating infringement, rather than directly infringing Sky’s rights.

However, when it comes to Sky Italy’s notices, the company has a more detailed approach that may prove even more effective.

“The reported sites illegally provide external links with which users can access and/or download unauthorized copyrighted contents, exclusively owned by broadcaster Sky Italia,” the notices state.

“Reported URLs pages are using without any authorization copyrighted images and logos owned by Sky Italia, which are used to promote and selling unauthorized IPTV services or video-on-demand library with show schedules or video catalogs owned by Sky Italia.”

In this context, the use of Sky graphics to promote and sell pirate IPTV packages to consumers is a slam dunk for the company when it comes to the DMCA. Hundreds of platforms not only use official logos in this manner but also images of Sky box controllers, culled from Sky’s own sites.

Having sites delisted from Google on those grounds alone should be relatively simple for the broadcaster. Copyright infringement of logos and graphics is much easier to determine than IPTV seller site URLs that may (but probably do not) contain any copyright-infringing material.

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Earlier this year a federal grand jury charged eight men for their involvement with the streaming services Jetflicks and iStreamitAll.

The platforms, which were headquartered in Las Vegas, offered a wide range of pirated videos that could be accessed in exchange for a monthly subscription fee.

This week, two of the defendants pleaded guilty. The first is Las Vegas resident Darryl Julius Polo, aka djppimp, who was involved in both services through which he earned over a million dollars in revenue.

In a plea agreement, Polo admits the various counts of criminal copyright infringement and well as a money laundering charge. The copyright offenses carry a maximum penalty of five years in prison and money laundering is punishable by up to 20 years incarceration.

Polo both owned and operated iStreamitAll (ISIA) which he launched after being involved with Jetflicks. In a signed statement, he admits that ISIA offered access to 118,479 different TV episodes and 10,980 individual movies.

Between September 2014 and December 2016 the streaming service processed at least 18,551 successful credit and debit card charges. The associated subscription fees ranged from $19.99 per month up to $179.99 per year.

According to the agreed statement of facts (pdf), Polo pitched his service to potential clients by pointing out that it offered more content than competing legal services such as Netflix, Hulu, Vudu, and Amazon Prime.

“In fact, the defendant sent out emails to potential subscribers highlighting ISIA’s huge catalog of works and urging them to cancel Netflix, Hulu, and similar services, and subscribe to ISIA instead,” it reads.

The various movies and TV-shows were sources from Usenet and torrent sites. Polo had set up an automated system where software including SickRage, Sick Beard, and
SABnzbd scoured the Internet for pirated content which was then stored by the service so it could be streamed to subscribers.

“These tools allowed the defendant to search for pirated movies and television shows available on some of the most popular torrent sites in the world, such as The
Pirate Bay, RARBG, and TorrentDay, as well as some of the largest Usenet NZB index sites,” the statement of facts reads.

The streaming service was not the first piracy operation Polo was involved in. He further admits that he operated the NZB indexer SmackDownOnYou, BoxBusters.TV, Jailbreakingtheipad, and the music piracy site MixtapeUG.

In addition to Polo, 40-year old Luis Angel Villarino from Las Vegas also pleaded guilty. He admits his involvement as a programmer for Jetflicks from December 2016 to at least June 2017.

Villarino agreed to be charged with one count of conspiracy to commit criminal copyright infringement, which carries a maximum prison sentence of five years.

Jetflicks used many of the same sources as the ISIA streaming service. It was tailored towards TV-show content and listed thousands of shows that could be accessed through a subscription. Both services worked in regular browsers and through various apps, including a Kodi-addon.

According to Villarino’s signed statement of facts (pdf), he mostly worked as a programmer to optimize the scripts that fetched the pirated TV-shows.

“The defendant mostly worked on solving problems with the Jetflicks’ computer scripts that co-defendants Darryl Julius Polo, Peter H. Huber, and Vaillant had written or refined and that were designed to help locate, download, process, store, stream, and make available for downloaded pirated television shows.”

In exchange for the guilty pleas, both defendants can expect a lower sentencing recommendation. They agree to cooperate fully in any further investigations and may have to provide information on and testify against the remaining six defendants, who go to trial in February 2020.

Polo and Villarino will be sentenced a month later. Both men must pay restitution to their victims while their criminal proceeds will be forfeited. In Polo’s case, that’s at least $1 million.

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Earlier this week we reported on a notable finding. For some reason, the two most active copyright litigants in the US had stopped filing new lawsuits in federal courts.

Instead of seeing hundreds of new cases each month targeting alleged BitTorrent pirates, there were none.

While the reason for this hiatus is unknown, we can now confirm that at least one of the companies hasn’t halted its efforts at all. Instead, it changed the venue, which isn’t without controversy.

In the U.S, copyright-related court cases are exclusively a matter of federal law, which is something every first-year law student knows. You can’t bring a copyright suit in state court, period. However, that’s exactly where Strike 3 has moved.

After filing over 1,000 cases in federal courts earlier this year, the adult entertainment company moved its activities to a Florida state court. In recent weeks, it has filed more than a dozen new cases.

Although these cases relate to copyright infringement, Strike 3 submits them as a complaint for “a pure bill discovery.” This essentially means that it asks the court to give it the right to figure out who the defendants are.

In this case, this means a subpoena directed at ISPs to identify the account holder that’s linked to the allegedly infringing IP-addresses. This tactic provides the same result as going through a federal court and allows Strike 3 to demand settlements as well.

While the number of cases in state court is relatively modest, these cases target a substantially higher number of defendants per case. That’s also one of the main advantages. By filing a single case with dozens or hundreds of defendants, the filing fee per defendant is very low.

In federal court, the company generally targets one defendant per complaint, which is far more expensive. And while Strike 3 mentions that it is requesting the information for a subsequent copyright lawsuit, it will likely try to get a settlement first.

Another advantage is that the company doesn’t have to deal with the federal courts that are increasingly reluctant to grant discovery. Just a few weeks ago, Strike 3 was denied a subpoena, for example.

The question is whether this shortcut is appropriate. While we have seen it being used in Florida a few years ago, it certainly isn’t common. And this time there is pushback as well.

TorrentFreak spoke to several attorneys who represent defendants in these cases. They believe that Strike 3 is wrong to use the state court for this purpose. However, in several cases, the Miami-Dade County Court has already granted subpoenas against a variety of ISPs, including AT&T and Comcast.

Attorney Jeffrey Antonelli and his firm Antonelli Law‘s local counsel Steven Robert Kozlowski objected to these subpoenas on behalf of several defendants. In his motion to quash he highlights a variety of problems, including the earlier observation that copyright cases don’t belong in a state court.

“This Court lacks subject matter jurisdiction over the copyright claims at issue in the lawsuit which the subpoena to Comcast is premised upon. Federal courts have original and exclusive jurisdiction over civil actions arising under federal copyright law,” the motion reads.

Another problem is that the purpose of the “pure bill of discovery” is to obtain facts or information a defendant has. However, the targeted ISPs are not defendants in these cases.

Finally, the motions highlight that the IP-addresses may not even be linked to Florida, where the court is based. Strike 3 should have known this, as they always disclose the location in federal court. However, they may have omitted it on purpose, the defense argues.

“In fact, Plaintiff’s failure to allege that Defendant has sufficient contacts with the state of Florida or is a Florida resident is likely a purposeful omission as Defendant is not a resident of Florida,” the motion to quash reads, showing that the IP-address is linked to Minnesota.

TorrentFreak spoke to Florida-based attorney Cynthia Conlin who has dealt with these ‘trolling’ lawsuits, both in federal and state court. She believes that Strike 3 has moved its efforts to the Miami-Dade County court in an attempt to save costs.

“The most obvious advantage in filing a multi-doe case is economic. Strike 3 need only pay a single filing fee to obtain identifying information for several dozen defendants, as opposed to $400 for each single-doe federal lawsuit,” Conlin says.

In federal courts, these cases typically include one defendant. So filing 50 cases would cost $20,000 in filing fees alone. In the recent state court cases, all defendants are grouped in a single case, which is much cheaper.

“By filing multi-doe suits, Strike 3 is increasing its odds of receiving settlements exponentially. So far it has filed 17 lawsuits in Miami-Dade County, and counting,” Conlin notes.

While Conlin doesn’t believe that these cases are allowed in state courts, judges often sign off on the subpoenas since they are not well-versed in copyright litigation. This is a loophole Strike 3 tried to exploit.

“Strike 3 would not be able to get away with filing a multi-doe lawsuit in federal court. Mass-doe cases have been done before in many federal jurisdictions, and the federal courts will no longer allow them. State court is the only place Strike 3 can get away with it,” she says.

This isn’t the first time this maneuver has been carried out. A few other companies have done so and some argue that it’s a win-win for all, as it can result in lower settlements as well.

Conlin and other defense attorneys don’t buy that and will continue to file motions to quash. At the time of writing, the Miami-Dade County Court has yet to rule on these subpoenas.

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Earlier this week, black clouds began to form over the passionate iOS jailbreaking community. Tolerated by Apple through gritted teeth due to legal protection under the DMCA, the company took the unusual step of sending a DMCA notice targeting a developer’s tweet containing an encryption key.

While that tweet was later restored, the takedown came as a complete surprise and the knock-on effect from this unsettling act would set the scene for the company getting blamed for additional similar acts, this time on Reddit.

In the wake of the Twitter action, a moderator of the /r/jailbreak sub-Reddit revealed that Reddit’s legal team had removed five posts detailing iOS jailbreak releases checkra1n and unc0ver. All of the posts were deleted by Reddit’s admins after receiving a DMCA notice, ostensibly sent by Apple.

What followed was an hours-long information blackout, during which /r/jailbreak’s moderators sought but failed to obtain information from Reddit’s admins. With a credible fear that more notices could be filed and as a result label /r/jailbreak as a repeat offender under the DMCA, its moderators put the forum into lockdown.

Right from the very beginning there was no clear proof that Apple had sent any DMCA notices to Reddit, despite news headlines blaming the tech company for going to war against jailbreakers. It now transpires that waiting for proof would’ve been a more prudent option.

As revealed by checkra1n development team member ‘qwertyoruiopz’, the notice that targeted his project was actually a fake.

Update: The DMCA takedown that took the checka1n post down is fake.

— qwertyoruiop (@qwertyoruiopz) December 12, 2019

<script async src="https://platform.twitter.com/widgets.js" charset="utf-8">

And, according to fellow developer ‘axi0mX’, the fake notice wasn’t particularly well constructed either.

“We reviewed it and confirmed that it was someone impersonating Apple. It was not sent from their law firm, which is Kilpatrick Townsend. There are issues with grammar and spelling,” he revealed.

“This notice was obviously not submitted in good faith, and it was not done by someone authorized to represent Apple. Not cool. They could be sued for damages or face criminal charges for perjury.”

Being sued for sending a fake notice sounds like a reasonable solution in practice but history tells us, one particularly notable case aside, that is unlikely to happen. However, it’s clear that more can be done to mitigate the effects of malicious takedowns, starting with more transparency from Reddit’s admins.

While the moderators of /r/jailbreak knew about the complaints early on, they were given no information about who sent them or on what basis. This meant that the people against whom the complaints were made weren’t in a position to counter them, at least with knowledge on their side.

“My personal take on all this is that this should provide plenty of food of thought about the state of copyright laws in the US. A site like Reddit risks losing legal safe harbor protections if they don’t immediately act on such notices,” qwertyoruiopz says.

“Not sharing the notices by default is however very bad policy on Reddit’s end; I would even call this a vulnerability. It allows for nefarious parties to create false-flag takedowns that spark can infighting and has chilling effects (albeit temporary) on non-infringing content.”

There can be little doubt that Reddit takes its DMCA obligations very seriously, so it could be argued that taking down the posts in response to a complaint was the safest legal option. However, if a cursory review of the notices by those targeted revealed clear fraud within minutes, there is a very good case for those notices being shared quickly to ensure that the fraudulent notices don’t have the desired effect.

While Reddit has shown no signs of sharing DMCA notices with the Lumen Database recently, quickly sharing them with those who have allegedly infringed would be a good first step.

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