As part of their war against the unauthorized sharing of copyrighted material online, entertainment industry groups and their affiliates commission reports to highlight how so-called ‘pirate’ sites operate.

In 2014, for example, research company NetNames published a report detailing the revenue streams for so-called ‘cyberlockers’. It was later used by a U.S. senator to pressure Visa and Mastercard to stop doing business with such sites.

With continued lobbying efforts in mind, a new report commissioned by the Motion Picture Association (MPA) has again been examining how so-called ‘pirate’ sites generate their income.

The study, carried out by UK-based Incopro, analyzes the revenue sources for the 250 most popular sites offering access to unlicensed content in Germany, Spain, France, Italy and United Kingdom. Due to some overlap in each country’s “most-popular 250″ list, 622 sites in three categories (hosting, linking only, P2P) were examined overall.

Advertising, cash – or both

The company looked at two key areas of revenue generation – monies received from companies who advertise on the sites (intentionally or otherwise) and monies received from users who either pay or donate via payment methods including Visa, MasterCard and Bitcoin.

In its analysis Incopro found that 550 of the 622 sites surveyed carried advertising and 142 offered at least one payment method. An overlap between the two groups meant that 122 sites carried advertising and also accepted payments. With just 52 sites out of 622 carrying no advertising and accepting no payments, a total of 570 sites (91.6%) had at least one source of revenue.

The sources of revenue for each of the three site categories were broken down revealing that ‘linking only’ and ‘P2P portal’ sites rely heavily on advertising. ‘Hosting’ sites tended to have both advertising and payments, with free users being shown advertising and premium users often paying to avoid them.

Key advertising intermediaries

Since advertising is viewed as the most important source of revenue for the majority of the sites in the report, Incopro has attempted to identify which advertising intermediaries are responsible. While several companies each served up to 55 sites in the report, three entities are highlighted as market leaders.

“Analysis found that AdCash, Propellerads/OnClickAds….and DirectREV were the top three intermediaries to serve adverts across all unique sites in this study,” Incopro reports.

Noting that the report concentrates on the intermediaries delivering adverts to the 622 sites, Incopro says that opportunities exist to disrupt the flow of ads.

“One possible approach to this would be to engage with the Content Delivery Networks (CDNs) which do not serve the adverts independently but cache the creative elements that are called by ad tags served by other intermediaries. Consideration should be given to approaching the leading CDNs and working with them to block adverts served to unauthorised sites,” the company writes.

Advertising categories

Incopro says that the adverts observed in the study were placed into standard categories such as entertainment (5%), tech (5.9%), retail (6.6%), business/finance (7.4%), games (10%), adult (10.4%) and gambling (18.1%).

However, due to the high number of deceptive ads appearing on ‘pirate’ sites the company had to create a new group (‘Trick button/Malware’) which accounted for 31.5% of the total, the biggest group by far.

“The Trick Button/Malware types of advert typically do not mention the advertiser in the initial ad, and thus they are a form of ‘bait-and-switch’,” the company says.

“Typically, the user is presented with a button that says ‘download’ and/or ‘play’. Believing that these will lead to the desired file, the user then clicks the button. Once clicked, the user is prompted to download an executable file containing a potentially unwanted program.

“These Trick Buttons are a common feature of unauthorized sites and are worth looking at in more detail given the potentially damaging financial and emotional effect on the user.”

Finding that two companies (RevenueHits and Matomy Market) were responsible for up to 89% of these kinds of ads to the sites they serve, Incopro advises that some kind of campaign could be effective in turning users away from the sites serving them.

“Given the likelihood that end users will encounter potentially harmful software from these types of adverts across all types of site, awareness and outreach campaigns around this issue could be reinforced to help to discourage use of unauthorized sites,” the company writes.

Top advertisers

Regular European visitors to file-sharing related sites will be well aware of the high number of ads served up from gambling companies. Unsurprisingly the Incopro report reaches the same conclusion, finding that four out of the top five most prolific advertisers (Trick button ads excluded) are gambling companies.

“These companies may not be aware that their adverts are appearing on these sites and should be considered for an approach in order to once again frustrate the ability of an unauthorised site to generate ad revenue,” the report reads.

“For this reason, Trick button/PUP adverts have been excluded from this section in order to concentrate on companies that are potentially approachable.”

Payment methods

As highlighted earlier, 142 out of the 622 sites studied accept payments from users. Of interest, however, is how many different payment methods are utilized by those sites – 83 in all. In total, four broad areas were identified, as detailed in the image below.

“Host sites were the primary location for payment methods and accounted for 91% of all payment methods detected. Payment to the host site was predominantly via a ‘premium’ subscription service whereas other site types were more likely to accept payment for donations,” the report notes.

Advising again on possible mitigation measures, the report suggests that pressure on payment companies of all kinds could limit the use of their systems on “infringing” sites.

“Visa and MasterCard, the most observed payment service providers in this study, have responded to notifications in the past. In the same way that the major global Brands would most likely not wish to be associated with infringing websites because it could affect their reputation, these companies may feel the same,” Incopro writes.

“In the same way that the payment card providers can be asked to take action, payment processors can also be asked to take similar action to prevent transactions on those merchant accounts where they are facilitating the revenue generation of unauthorized sites.”

Despite best efforts so far, the image below reveals that the usual big names are still servicing the top “infringing” sites.

Conclusions

Overall, Incopro concludes that advertising is far and away the biggest source of revenue for the sites in their study.

“Given this reliance on advertising, concerted effort should be made by brands, agencies, and where possible, the authorities, to work together to persuade the various intermediaries to undermine these revenue streams,” the company says.

“Regarding payment methods, analysis has shown that the payment methods observed broadly consist of four transaction types on the unauthorized websites studied. These are the payment service providers like Visa and MasterCard, payment processors such as Liqpay and Dalpay, virtual wallets such as Google Wallet, RoboKassa and PayPal and resellers such as VIPKeys. Engagement with the first three
is recommended. Resellers should be examined as a separate issue,” the company concludes.

Just like the NetNames report before it, this MPA-commissioned report will be cited by entertainment industry companies during the months to come to put yet more pressure on advertisers and payment companies alike. Whether that will be enough to stifle the revenue arms race will remain to be seen.

The full report can be downloaded here (pdf)

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

As dozens of headlines relayed, last week was the final chapter in the Grooveshark story.

A fly in the major recording labels’ ointment for almost a decade, Grooveshark eventually collapsed under lawsuit that could have seen it liable for more than $736 million in damages. Instead, the company settled with its rivals for a reported $50 million.

Part of the deal saw the streaming music upstart hand over just about everything to the labels, including its website, mobile apps and intellectual property such as patents and copyrights. Without offering any warning to its millions of users (including many who paid to use the service), on April 30 Grooveshark closed its doors. And that was that.

Well, not quite.

Yesterday, in a surprise twist to the tale, someone claiming connections with the now-defunct Grooveshark site sent out a number of emails to news sites (this one included) announcing that the famous streaming service was being brought back online.

“Well, I started backing up all the content on the website when I started suspecting that Grooveshark’s demise is close and my suspicion was confirmed a few days later when they closed,” ‘Shark’ wrote.

“By the time they closed I have already backed up 90% of the content on the site and I’m now working on getting the remaining 10%.”

The purpose of this back-up bonanza was to bring Grooveshark back online through a brand new Grooveshark.io domain.

Considering the profile of the original Grooveshark and its recent demise at the hands of an aggressive RIAA, the story is definitely exciting, hence the dozens of reports doing the rounds today in the tech press. That being said, the story would have been even better had it passed the sniff-test.

At first glance the site shown above does look a bit like Grooveshark, no doubt about that, but anyone familiar with the original service knows that the similarities end there.

All the community features that made Grooveshark so popular are absent and searches for content show that the .IO variant has nowhere near the depth of library. Admittedly the site’s operators say they are working on bringing those back to life, but the issues run deeper than that.

Sensing a similarity with other sites already exploiting the unofficial, unlicensed MP3 market, we decided to find out the truth behind this supposed Grooveshark replacement. Armed with Google and few clips of the site’s terms and conditions, it didn’t take long to find a very similar site indeed.

In fact, every other text section on MP3Juices.se (not to be confused with MP3Juices.com which was previously seized by UK police only to return under MP3Juices.to) matches up with the corresponding section on Grooveshark.io.

Of course, the Grooveshark.io people may have cut-and-paste that site’s text to save time, so we wanted some proof of dynamic similarities. They were easy to find.

A search for any term, any artist or any song, returns exactly the same results – in exactly the same order – on both sites. On that basis it’s probably safe to presume that they are either (i) the same sites behind the scenes or that (ii) they use the same search engine and/or the same source content, wherever that may be hosted.

We concede that to some the idea of a reincarnated Grooveshark will be a somewhat romantic one but as we highlighted at the weekend, the practice of passing one site off as another is now really getting out of hand.

Only time will tell if Grooveshark.io will magically transform into a proper replacement for the now defunct site, complete with playlist and community features for example, but it seems unlikely.

As things stand Grooveshark.io appears to be just a re-badged/re-skinned clone of MP3Juices.se, a low-traffic clone of the original MP3Juices. In the scheme of things it’s hardly likely to be an important target for the RIAA, except for one small detail. The labels now own all of Grooveshark’s intellectual property – brand names and trademarks included…..

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

Due to complicated licensing agreements Netflix is only available in a few dozen countries, all of which have a different content library.

The same is true for many other media services such as BBC iPlayer, Amazon Instant Video, and even YouTube.

These geo-blocking practices have been a thorn in the side of the European Commission, who now plan to abolish these restrictions altogether.

Today the EU’s governing body adopted the new Digital Single Market Strategy. One of the main pillars of the new strategy is to provide consumers and businesses with better access to digital goods and services.

Among other things the Commission plans “to end unjustified geo-blocking,” which it describes as “a discriminatory practice used for commercial reasons.”

“I want to see every consumer getting the best deals and every business accessing the widest market – wherever they are in Europe,” Commission President Jean-Claude Juncker says.

Another key element on the new strategy is a modern and more European copyright law. The Commission notes that the legislative proposals to achieve this will follow before the end of the year.

Under the revamped copyright law it should be easier for consumers to access and enjoy content online. This means that consumers will have the right to access content they purchased at home in other European countries.

According to the Commission various industries need to adapt to the new realities of the digital age, indirectly hinting at the restrictive and conservative movie industry.

“Europe has strengths to build on, but also homework to do, in particular to make sure its industries adapt, and its citizens make full use of the potential of new digital services and goods, Commissioner for the Digital Economy and Society Günther Oettinger says.

“We have to prepare for a modern society and will table proposals balancing the interests of consumers and industry,” he adds.

The new Digital Single Market Strategy doesn’t come as a surprise. Previously, several insiders called for the lifting of many unnecessary copyright restrictions. With the plans now being official it will be interesting to see what concrete proposals will follow and how the copyright industries respond.

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

During the first quarter of 2014, cloud-storage service Mega.co.nz announced its intention to hit the New Zealand stock exchange.

After being launched by Megaupload founder Kim Dotcom just a year earlier, the news was well received. However, in keeping with the complex life of the entrepreneur, the mission would not be straightforward.

In a process that began last March, Mega said it would aim for a backdoor listing on the New Zealand stock exchange via a reverse takeover of an existing company, TRS Investments.

In tandem, TRS said it had reached agreement to buy Mega Ltd through a share issue to Mega shareholders. Documents filed with the stock exchange put Mega’s value at NZ$210 million (US$155.7m).

Once the acquisition had been completed TRS planned to change its name to Mega but after several delays in previous months it became evident this morning that the deal would not be going ahead.

“As previously advised to the market, the proposed acquisition of Mega was conditional upon shareholder approval being obtained on or before 29 May 2015. It has become evident that this condition will not be satisfied within this time frame,” TRS said in a notice to the market.

“TRS has been advised overnight by Mega that the shareholders of Mega will not agree to an extension of the conditional date. As a consequence it will be the case that on 29 May, the conditions to the acquisition will not be satisfied, the share sale deed entered into between TRS and the Mega shareholders will terminate, and the proposed acquisition of Mega will not proceed.”

Speaking with TorrentFreak, Mega CEO Graham Gaylard acknowledged the development as a disappointment but insisted that the company had not been disadvantaged as a result.

“It’s disappointing that we could not make it work, given the amount of time and effort that Mega put into the transaction, but it is not seen as a setback for Mega. The company continues on as a private company,” Gaylard said.

The Mega CEO also confirmed that the company wouldn’t give up on its stock market aspirations.

“An exchange listing is definitely still on the horizon, but plans for this have not been worked on,” he said.

In the meantime Mega continues to grow. Gaylard informs TF that the company now has 18 million registered users, with an additional one million users signing up every month. The majority are on the company’s extremely generous free tier, so the challenge moving forward will be to upgrade as many as possible to premium subscription status.

That has not been without difficulty, however. While feedback from Mega’s customers is generally positive, action taken against the site in the United States has proved somewhat of a hindrance.

According to Mega, Senator Patrick Leahy put payment processors under pressure to stop providing services to certain file-hosting companies listed in a Netnames report published last year.

Following Leahy’s intervention, Visa and MasterCard then pressured PayPal to cease providing payment processing services to Mega, ostensibly on the basis that since content on Mega is encrypted, no one can confirm whether it is legitimate or not.

Following a period in which Mega could accept no payments, it is now able to do so through resellers. It’s a less than ideal situation but considering the levels of service offered by the company, it will be one that it hopes customers will take in their stride.

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

A few weeks ago the Popcorn-Time.se fork surprised friend and foe by releasing a hack that allows anyone with an iPhone or iPad to install the iOS version of the popular app.

Popcorn Time was already available on jailbroken iOS devices. However, the developers say that the app really took off when they released the Windows installer for non-jailbreak iOS devices.

“On April 8th, the day of the release, Popcorn Time broke all previous records and was installed on more than 100,000 iOS devices in one day,” the Popcorn Time teams informs us.

“None of the other releases we had since we picked up Popcorn Time evoked such a reaction. We literally stared at the numbers for hours,” they add.

Today comes another big push as the Mac version of the installer has just been released. It works in a similar manner to the Windows version and allows people to install the Popcorn Time app in just a few clicks.

With a Mac installer the Popcorn Time team soon hopes to welcome their millionth download for iOS.

Despite the iOS surge Android remains the most popular platform for the fork at the moment. For a brief moment iOS was in second place, but it’s now back in third after Windows.

The Popcorn Time developers think that after the iOSInstaller becomes public, so it can also be used for other apps, the popularity will rise again.

“Now it’s #3 but we expect this figure to change once again when the iosinstaller.com team officially launches their app store which will be a ‘must use’ for all iOS users out there,” the Popcorn Time team says.

With the iOS installers Popcorn Time is becoming an even bigger target. For Apple, but mostly for the movie studios who don’t want people to watch their content without paying for it.

Last week the UK High Court ordered local ISPs to block the websites of several Popcorn Time forks including popcorn-time.se. This renders the application useless locally, at least for those who haven’t found a workaround yet.

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