Fox Targets Pirate Bay Proxies With Bogus DMCA Requests

Hollywood movie studio Fox has asked Google to remove dozens of allegedly infringing links to Pirate Bay proxy sites but forgot to check whether the links even exist. The result is a slew of bogus DMCA claims, some for TV-shows that have yet to be produced. Another prime example of how automated take-down procedures lead to abuse.

Like many other copyright holders Fox isn’t pleased that their content is being shared for free on The Pirate Bay.

To make pirated copies harder to find the Hollywood studio asks Google to removelinks to Fox movies and TV-shows from its search results.

But targeting The Pirate Bay alone is not enough. Fox also has to send the same notices for links to Pirate Bay proxies. After all, all content on TPB is mirrored on hundreds of proxies.

To streamline the process, someone in the company’s take-down department came up with the brilliant idea of making a huge list of Pirate Bay proxy site URLs appended with the presumed location of the content on The Pirate Bay.

In other words, copy thepiratebay.se/search/tpb and paste it after pirateproxy.netsearch/tpband the other proxy domains.

The end result is a removal request that looks like one of these which lists nearly 200 Pirate Bay proxies. After every proxy URL the same search string is added, in this case related to the TV-series Wilfred.

While this may seem a clever approach, the way Fox has carried it out has resulted in many faulty DMCA notices.

The first issue is that many proxies specifically ask Google not to index their site, since being listed on the search engine usually means receiving thousands of take-down notices.

The owner of the Pirate Bay proxy hosted at Offpeat.com told TorrentFreak that this is also the case for his site, but that Fox still asked Google to remove these non-existent links that can’t be found through Google.

“The proxy is not indexed by Google. I tell crawlers not to go there and they don’t. Still, I received a complaint regarding a URL deemed infringing by Fox,” the proxy operator says.

And that’s not all.

Upon closer inspection it appears that the mistakes run deeper since the format of the search strings is incorrect. We couldn’t find a single URL in the take-down request that actually points to (searches for) infringing material. They all include ?search= which produces no results.

The Offpeat.com owner confirms that none of the links listed for his site point to copyrighted material.

“Neither Fox or Google even bothered to check if these URLs even exist. In my case they don’t and never did,” he says.

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Copyright Trolls to Judge: Nope! We’re Not Coming to Scary Hearing

The copyright trolls of Prenda Law have kicked back against a judge who ordered them to appear before a Los Angeles court this coming Monday. The hearing has the potential to lead to prison for some of those involved but not if Prenda have their way. In a letter sent to the court, Prenda argues several points for canceling the hearing including that the judge lacks jurisdiction, they haven’t been given enough notice, and arrangements haven’t been made for them to get paid. The hole is getting bigger but they keep on digging.

As reported yesterday the copyright trolls of Prenda Law been attempting to bully the owners and users of anti-troll sites FightCopyrightTrolls (FCT) and DieTrollDie (DTD).

They ordered WordPress to hand over the IP addresses of everyone who has used both sites for the last two years. But, after a little panic, WordPress stepped in to calm the nerves.

“No cause for concern. As a matter of policy, we closely review all subpoenas, don’t respond to overly broad requests, and push back on fishing expeditions,” WordPress’s Paul Sieminski told DTD.

“Here – dietrolldie has already let us know that the subpoena will be challenged. In cases like this, we don’t turn over any information until the user’s legal challenge has played out.”

What is becoming apparent is that for every heavy-handed and/or suspect action taken by Prenda, even more adversaries come on board. Lawyer John Whitaker from the Whitaker Law Group deliberately ‘outed‘ himself as a DTD and FCT user yesterday, and BitTorrent defense lawyer Robert Cashman is more critical than ever before.

As yesterday’s article outlined, Monday will see Prenda hauled before a Los Angeles court on the orders of Judge Wright after he appeared to become somewhat tired of the firm’s apparent shenanigans.

Well, that was the plan. Unsurprisingly, Prenda have other ideas.

In an ex parte application for relief filed by John Steele, Paul Hansmeier, Paul Duffy and Angela Van Den Hemel, Prenda argue that they shouldn’t have to come to court on Monday. In their application, Prenda roll out a variety of excuses for not attending.

First, in a move that’s likely to further inflame an already irritated Judge Wright, Prenda claim that the Judge has no jurisdiction.

“Even where the court seeks to adjudicate issues between parties, it must have personal jurisdiction over them. Here, Steele, Hansmeier, Duffy, and Van Den Hemel are not parties and have not otherwise participated in this litigation. As such, the public policy behind the need to determine personal jurisdiction is arguably at an elevated level because, as individuals, they effectively have ‘no dog in this fight’,” the application reads.

Prenda go on to argue that since they’re not parties in the action they can only be witnesses. And since witnesses can only be required to appear if they are “resident within the state at the time of service” (and Prenda aren’t, apparently), then “the court lacks jurisdiction to order them to appear.”

Second, Prenda say that attending would be particularly inconvenient. They write that the court is being “fundamentally unreasonable” in giving short notice and that attending court could upset their clients.

Prenda go on to argue that they haven’t been told why they have to attend so cannot adequately prepare, a situation which deprives them of due process. They also complain that they are entitled to get paid for attending but the court order makes no mention of who will foot the bill.

“For these reasons, even if the court had jurisdiction over the parties, the notice would be unreasonable to them and the court would, at a minimum, have to withdraw the order and issue a new one for a future date that would afford Steele, Hansmeier, Duffy, and Van Den Hemel reasonable notice of the hearing, their rights, and the purpose for their appearance,” Prenda conclude.

Ken, a writer over at the respected legal blog Popehat, is not impressed.

“Considering they have had several days to put a brief together, I find this motion rather half-hearted and meager, particularly given the gravity of the situation and what they are trying to accomplish. If this is all they could pull together, I am surprised they didn’t file it sooner, like Wednesday,” he writes.

Ken adds that the record shows that jurisdiction is not an issue and Prenda are only making matters worse.

“The evidence clearly shows that Steele, Hansmeier, and Duffy have directed Prenda Law litigation activities in California. A federal judge has ordered them to appear here and explain those activities.

“By responding with a jurisdictional argument now, they have utterly eviscerated their credibility and the credibility of their enterprise permanently in every court in the United States of America,” he concludes.

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SXSW 2013 on BitTorrent: 7.39 GB of Free Music

The South by Southwest (SXSW) music festival is one of the largest and most popular in the United States. For the ninth year in a row SXSW is sharing DRM-free, RIAA-safe songs of performing artists, totaling 7.39GB so far. All the tracks can now be downloaded for free in one go, thanks to BitTorrent.

Since 2005 the SXSW musicfestival has published thousands of free tracks from participating artists.

For some of the first releases the festival organizers created the torrents for the artist showcases themselves, but since 2008 this task has been handed over to the public.

Luckily all of the SXSW showcase MP3s are still freely available on the festival’s site for sampling purposes, so it only takes one person to get a torrent up and running.

For the past four years Ben Stolt has taken the time and effort to put all the MP3s on BitTorrent, and this year two torrents containing 1,210 tracks have been released.

That’s 7.39 gigabytes of free music in total.

All the tracks released for the previous editions are also still available for those people who want to fill up their iPod without having to invest thousands of dollars. The 2005 – 2013 archives are now over 45 gigabytes.

Every year the SXSW torrents are a great success, with many thousands of music aficionados downloading the gigabytes of free music from both established acts and upcoming bands in virtually every music genre.

This year’s SXSW music festival takes place from March 12-17 in Austin Texas.

For those interested in even more free music to fill up their MP3-players, there’s alwaysJamendo with nearly 370,000 free-to-download tracks. That’s a few terabytes of free music, good for years of continuous play.

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Pirate Bay ‘Advert’ Appears on Hacked Billboard

A group of hackers have managed to gain access to a prominently placed advertising billboard located in the crowded Republic Square in the center of Belgrade, Serbia. For a while the billboard displayed the Pirate Bay logo alongside Ghandi’s quote “first they ignore you, then they laugh at you, then they fight you, then you win.” The people responsible for the stunt claim the hack was done to demonstrate how little attention people pay to IT security.

The Pirate Bay is known for its technical ‘playfulness’, as was demonstrated earlier this week with a hack which led many to believe that the site had moved to the dictatorial waters of North Korea.

In the same tradition some computer science students took over a prominently placed billboard at the Republic Square in the center of Belgrade, Serbia.

Dressed in an appropriate “Keep Calm and Seed” shirt, one of the guys used his smartphone to play a game of Space Invaders on the meters-wide screen with a fellow student. After that, they displayed several other messages on the billboard including a “hacking4fun” banner.

What caught our eye, however, is the massive Pirate Bay logo that was displayed. The iconic ship appeared alongside a quote The Pirate Bay has borrowed from Mahatma Gandhi on few occasions: “First they ignore you, then they laugh at you, then they fight you, then you win.”

Hacked

Initially the Serbian media attributed the hack to “Anonymous” but the students explain to TorrentFreak that they are in no way affiliated with any known hacker groups.

“When we started with this hobby, we noticed that a large number of computer systems are very poorly protected or even have no protection at all from some very common attacks that hackers usually use,” one of the students told TorrentFreak.

“In a world where information is freely available, it is easy to learn just about anything, including “how to hack.” We therefore feel that awareness needs to be raised about this general disregard for computer security,” he adds.

In the process, the students decided to give The Pirate Bay a bit of support.

“We strongly believe in the right of free speech and are against any form of censorship. The Pirate Bay is the closest we have to a free, apolitical independent worldwide organization that supports these values and we simply felt the need to support it in some way,” we were told.

The student says that they merely wanted to demonstrate how vulnerable IT systems can be. Nothing was ‘broken’ and the company that operates the billboard has been informed about the holes in their system.

Whether The Pirate Bay received a local visitor boost after this display is unknown. Not that it’s needed, as the BitTorrent site already is the 21st most visited website in Serbia. However, the Pirate Bay team did appreciate the hack from their Serbian friends.

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Top 10 Most Pirated Movies of the Week

The top 10 most downloaded movies on BitTorrent are in again, ‘Jack Reacher’ tops the chart this week, followed by ‘The Hobbit: An Unexpected Journey’. This is 40′ completes the top three.

This week we have four newcomers in our chart.

Jack Reacher is the most downloaded movie.

The data for our weekly download chart is collected by TorrentFreak, and is for informational and educational reference only. All the movies in the list are BD/DVDrips unless stated otherwise.

RSS feed for the weekly movie download chart.

Week ending March 10, 2013

Ranking	(last week)	Movie	IMDb Rating / Trailer
torrentfreak.com
1	(…)	Jack Reacher (R6)	7.2 / trailer
2	(2)	The Hobbit: An Unexpected Journey	8.2 / trailer
3	(…)	This is 40	6.3 / trailer
4	(…)	Les Miserables	7.9 / trailer
5	(5)	Identity Thief	8.2 / trailer
6	(1)	Silver Linings Playbook	7.4 / trailer
7	(…)	Java Heat	?.? / trailer
8	(9)	Lincoln (DVDscr/BrRip)	8.2 / trailer
9	(4)	Argo (DVDscr)	8.2 / trailer
10	(6)	Red Dawn	5.3 / trailer

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“Six Strikes” Boosts Demand For BitTorrent VPNs and Proxies

The launch of the six strikes anti-piracy scheme in the United States has boosted demand for VPN services and BitTorrent proxies. Data from Google reveals a big surge in searches for terms such as “BitTorrent VPN” and “BitTorrent proxy” over the past two weeks. Some VPN providers see the scheme as a clear invasion of privacy and are encouraging people to protect themselves.

Last year a study in Sweden showedthat many people respond to tough copyright enforcement measures by signing up for VPNs and other privacy services.

Instead of stopping their defiant habit, these file-sharers take measures to hide their IP-addresses and bypass the monitoring. The researchers predicted that this would also happen with the launch of the six-strikes system in the United States.

“Some people may stop or share less when they receive warnings, but there will also be a group that will respond to the warnings by becoming more anonymous. A third group will try to find other means to share files than BitTorrent, since these are not monitored,” researcher Stefan Larsson told TorrentFreak at the time.

Looking at Google’s search trends we see that this prediction has become reality. The volume of searches for “BitTorrent VPN” and “BitTorrent proxy” spiked when the copyright alert system launched.

BitTorrent VPN / Proxy searches over the past 90 days

TorrentFreak talked to several VPN providers who confirm that interest in their services has increased. Some even reference the strikes scheme in their “marketing”, such as BeeVPN who highlighted in a blog post that people may want to protect themselves from being wrongfully accused.

“To prevent yourself from being caught in this endless loop of strikes and invasion of privacy use BeeVPN whenever you’re online and defend yourself against others seeing your real IP,” the company writes.

PrivateInternetAccess is not supportive of the six-strikes initiative either.

“The Copyright Alert System has similarities to some of the most draconian systems of control that were implemented by heavy-handed rulers during some of the darkest ages in the history of mankind. Big Brother would be proud,” PIA’s Andrew Lee told TorrentFreak.

Among other things Lee points out that the possibility of people being wrongfully accused is high, and that the system lacks any rights to due process. “As a result of CAS, we have seen an increased amount of discussion regarding VPNs around the social realm,” he says.

Criticism aside, the increased demand in anonymizer services does not mean that the six-strikes scheme has failed.

The Center for Copyright Information (CCI) and their partners don’t see these workarounds as a major problem. Right from the start they’ve made it clear that the program aims to educate the public, in particular the more casual file-sharer.

How many file-sharers stop pirating, and how many choose to hide instead is anyone’s guess at this point. However, recent trends suggest that encryption is becoming more mainstream, whether it’s for privacy protection, anti-piracy circumvention or freedom of speech.

That is, until anonymous VPNs are outlawed, as they appear to have been in Iran last week.

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EVE Online Prepares 500,000 Subscribers For BitTorrent Upgrade

The popular game EVE Online is set to enjoy a boost from the world’s favorite file-sharing protocol. Developer CCP Games has announced that work is underway to improve the EVE Launcher so that EVE client updates may be rolled out more frequently and reliably. In future, more than 500,000 EVE Online subscribers will have BitTorrent under the hood.

When BitTorrent was invented it solved a problem, that of shifting large amounts of data round the Internet in a speedy, efficient and reliable manner.

For more than a decade it has achieved that task admirably but due to its great potential it still manages to feel somewhat under utilized at times.

BitTorrent Inc. is certainly doing its part to open up fresh avenues and applications for the protocol and today we learn of another company making use of BitTorrent to improve efficiencies and enhance end-user experience.

CCP Games is the Icelandic studio behind EVE Online, the space-based MMORPG game that first appeared in 2003. While BitTorrent enjoyed its 10th birthday a couple of years ago, EVE Online will celebrate its first decade this May, but not before a few changes have been made.

EVE Online currently has around 500,000 subscribers who are each required to run the EVE Launcher, a tool which installs, patches and repairs the EVE client. However, the company reports that they are not happy with aspects of the Launcher and how it behaves in certain situations.

“It is at times a bit cumbersome when it comes to updating the EVE client – how many of you had to download a full client install because the EVE Launcher patching failed? Quite a few according to our statistics,” CCP begins.

“Combined with our own desire to be able to push out EVE client updates more frequently and reliably, we have decided to go back to the drawing board and rethink some of the things we are doing; trying to find ways on how to improve the overall user experience,” they add.

To do so CCP are working on improving the Launcher’s self-update mechanism and its ability to download and update the EVE client. For this they will rely on an old friend.

“After careful investigation of a lot of different distribution and update mechanisms we have decided to base the EVE Launcher’s future download mechanism on the widely used and battle-tested BitTorrent protocol,” CCP reveal.

“The main reason why we are doing this is that BitTorrent itself can utilize a number of different transport channels at the same time and is thus less prone to failing on that level. Our current mechanism is built on HTTP 1.1 only, which is a protocol that was not designed for transferring large amounts of data.”

Due to this design shortcoming, HTTP transfers – especially partial ones – are prone to errors which can corrupt the EVE client. With Bram Cohen‘s baby, this isn’t an issue.

“With BitTorrent we do not have this problem as it can run on top of a number of different protocols. Furthermore the protocol does a double validation of transferred data, ensuring that it is actually what we wanted to download and not some digital garbage,” CCP explain.

“Eventually it is also possible to prioritize files over others when downloading which opens up a whole lot of possible future improvements to the user experience – for instance the ability to create your character while the game is still installing.”

While the BitTorrent implementation will be transparent, there are bound to be plenty of EVE users who understand the protocol and how it functions, and might therefore be worried about it greedily eating up available upload bandwidth as it seeds the client to other users. CCP say they have that covered.

“By default the new EVE Launcher will only make you share the data required for installing the client while you are downloading; once your download is complete you will not be distributing it to others, unless you explicitly enable this in the options – after all it might be useful for sharing the installation across your local network. We are also, by default, limiting the upload rate so that it should not affect your normal internet usage. This can be adjusted within the settings, should you wish to do so,” CCP conclude.

Facebook and Twitter previously revealed that BitTorrent is doing wonders for them too, so it’s great to hear of another successful application taking place outside the regular file-sharing space.

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“Six Strikes” Evidence Still Waiting for Impartial Re-review

Last year it was revealed that the “independent and impartial expert” that reviewed the six-strikes scheme evidence was a former RIAA lobbying firm. To restore the public’s faith in the BitTorrent monitoring scheme, CCI promised to promptly appoint a new independent expert. However, TorrentFreak has learned that after several months the group is still to decide who will carry out the review of the evidence review.

Last week the six-strikes anti-piracy system was launched by the Center for Copyright Information (CCI) and since then thousands of Internet subscribers have received so-called copyright alerts.

The evidence at the base of the accusations is provided by the copyright holders who hired a company called MarkMonitor (DtecNet) to snoop on BitTorrent users.

This information then goes to the Internet providers, who forward it to their customers in the form of a “copyright alert”.

To guarantee the accuracy of the evidence behind the accusations the parties agreed to hire an impartial and independent technology expert, but October last year their commitment to this promise was questioned when the expert turned out to be Stroz Friedberg, a former RIAA lobbying group.

The CCI realized that this was an unfortunate pick and the group quickly announced that a new expert would re-review the evidence. With this re-examination CCI hoped to restore the public’s faith in the six-strikes scheme.

“We are sensitive to any appearance that Stroz lacks independence, and so CCI has decided to have another expert review Stroz’s initial evaluation of the content community’s processes. We will be selecting the additional expert promptly and will make that information available,” CCI’s Executive Director Jill Lesser said last October.

Nearly five months have passed since that announcement, and with the six-strikes scheme in full effect we wondered what the status on the re-examination is. Quite surprisingly, there appears to have been very little progress.

The CCI informed TorrentFreak that a new independent expert is yet to be picked. The group could give no further details but it’s safe to assume that it will take at least a few more months before the re-review is completed. By that time, millions of subscribers may have already received their alerts.

Fortunately, the initial evidence gathering review by the ‘tainted’ Stroz Friedberg seemed solid. Nonetheless, considering the sensitivities and the fact that millions of people are affected, the wise choice would have been to get the re-examination done as soon as possible.

It will be interesting to see how many reports of wrongful accusations, if any, will surface during the coming months. If MarkMonitor’s track record of DMCA notices sent to Google is any indication, there might be a few mistakes here and there.

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Copyright Trolls Order WordPress To Hand Over Critics’ IP Addresses

In what is becoming one of the strangest, most unbelievable and over-broad farces in the history of United States copyright trolling, the ante has just been upped yet again. In a direct attack on the troll defense blogs FightCopyrightTrolls and DieTrollDie, Prenda Law has just ordered WordPress to hand over all IP addresses of users who accessed either site in the last two years. Just to be clear, that’s everyone’s details.

Copyright trolls, wherever they try to do business in the world, meet resistance.

Their work is appreciated by few outside of their inner circle and often frowned upon by fellow law firms, copyright owners and the public, who see their work as one step away from outright extortion.

While they have enemies everywhere, some of the trolls’ greatest adversaries are their victims. Once you’ve threatened to turn someone’s life upside down with a claim for thousands of dollars, pounds or euros, relationships aren’t really the same ever again. And an enemy empowered by the Internet, one of the greatest game levelers today, soon gets momentum.

In the United States some of the most motivated troll fighters are to be found on two sites,FightCopyrightTrolls and DieTrollDie. Their aims are simple. To keep the public and fellow victims informed and to ensure that through activism, trolls make as little money as possible.

Needless to say, trolls do not like this kind of opposition. It hurts their bottom line. And now, in the middle of what is probably the most bizarre case there has ever been in troll history, one outfit is coming out fighting – possibly for its life.

Prenda Law is in the middle of a mess so massive that to adequately describe the case in enough detail one needs to write many thousands of words. Fortunately, for those who want to catch up, the sites mentioned above have been keeping up to date, complimented brilliantly by Techdirt’s Mike Masnick and Ken’s excellent summary over at Popehat.

The TL;DR is that there is going to be an unprecedented showdown in a Los Angeles court on Monday that could lead to someone associated with Prenda going to prison.

“Based on the evidence presented at the March 11, 2013 hearing, the Court will consider whether sanctions [for Prenda Law] are appropriate, and if so, determine the proper punishment. This may include a monetary fine, incarceration, or other sanctions sufficient to deter future misconduct,” Judge Wright explained.

But while the blood of trolls may indeed flow on Monday, in the last few days Prenda have been going on the offensive.

Earlier this week FightCopyrightTrolls and DieTrollDie had a nasty surprise. Prenda decided to file three defamation lawsuits which according to FCT’s SophisticatedJaneDoe are “designed to chill free speech by burying [Prenda's] critics in massive legal fees.”

Two of the targets in the lawsuit are people involved in the proceedings due to go ahead on Monday, but also listed were a total of 10 John Does. So who are these mysterious characters?

Well, none other than the operators of DieTrollDie (DTD), FightCopyrightTrolls (FCT) and commenters on their sites. The beef? Seems Prenda don’t like criticism, or ‘defamation’ as they prefer to frame it.

On Wednesday, one of the cases – John Steele v. Paul Godfread, Alan Cooper and Does 1-10, FLSD 13-cv-20744 – was dismissed without prejudice by John Steele. The other two remain. Then yesterday, more surprising news.

It transpires that Prenda Law have sought information about DTD’s and FCT’s readers and commenters from WordPress, and not just the odd detail either.

“Dear Custodian of Records,” the Prenda subpoena to WordPress begins.

“Enclosed, please find a subpoena issued in the above-referenced matter, which is currently pending in the Circuit Court of the Twentieth Judicial St. Clair Couty, Illinois.

Our client is requesting all Internet Protocol addresses (including the date and time of that access in Universal Coordinated Time) that accessed the blogs located at diretrolldie.com and fightcopyrighttrolls.com between January 1, 2011 through the present.

Please provide this information in an Excel spreadsheet.”

That’s right, somehow Prenda want *everyone’s details*, whether they are involved in the lawsuit or not. DTD hope that WordPress won’t comply but are preparing their readers for the worst.

“As there is a possibility that a release could occur, the public IP address (date/time stamp) could fall into the hands of Prenda. I would expect that they would then try to cross-reference the IP address with their list of alleged BitTorrent infringement IP addresses,” DTD warn.

“If you have ever gone to this site or Fightcopyrighttrolls.com since 1 January 2011, you may want to contact WordPress and tell them you want them to refuse this overly broad request and at least wait until the issue of the case being removed to the Federal court is answered, before releasing ANY information,” DTD concludes.

So, faced with organized opposition from DTD and FightCopyrightTrolls, Prenda now appear to want to shut them down and quieten the critics. History tells us it won’t work.

This attack against all readers of those sites will only add fuel to the fire and serve to make the possibility of a terrible outcome for Prenda on Monday an even more delicious prospect.

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Megaupload Shutdown Boosted Digital Movie Revenues

A new paper suggests that revenues from digital movie sales and rentals were positively impacted after the shutdown of Megaupload. Researchers from Wellesley College and Carnegie Mellon University compared the income from 12 countries with varying Megaupload usage. They conclude that the shutdown caused a 6-10% increase in digital movie revenues for two major Hollywood studios.

It is no secret that the MPAA was one of the instigators of the Megaupload investigation, which ultimately led to the shutdown of the company January last year.

According to the Hollywood studios the file-hosting site kept people away from legal movie stores, and they now have some data to back this claim up.

This week researchers from Wellesley College and Carnegie Mellon University released a comprehensive study that evaluates the impact of Megaupload’s shutdown on digital movie revenues.

Titled “Gone in 60 Seconds: The Impact of the Megaupload Shutdown on Movie Sales,” the paper compared digital movie revenues across 12 countries. These countries vary in the relative number of Megaupload users, allowing the researchers to estimate the effect of the cyberlocker’s demise on movie sales.

“We were interested in studying the effect of a major piracy site shutdown on demand for digital movie sales since we’ve seen the argument that such efforts could be like a game of whack-a-mole, with a new file-sharing site springing up as soon as one is closed,” assistant professor of Economics Brett Danaher tells TorrentFreak.

“We saw the logic of this argument, but could also imagine a world where shutting down such a large site could change the behavior of some types of consumers,” he adds.

After controlling for a wide range of country-specific trends and other variables the researchers conclude that the latter is the case, Megaupload’s shutdown had a significant effect on digital revenues. The data suggest that the income of two major Hollywood studios was boosted by up to 10 percent.

“Our analysis across 12 countries suggests that, in the 18 weeks following the shutdown, digital revenues for these two studio’s movies were 6-10% higher than they would have been if not for the shutdown,” the researchers write in their paper.

“Thus our findings show that the closing of a major online piracy site can increase digital media sales, and by extension we provide evidence that Internet movie piracy displaces digital film sales,” they add.

Megaupload penetration per country

The table above shows that Megaupload “penetration” was relatively high in Spain and France, where 17% and 11% of Internet subscribers used the site. With less than 2% it was least popular in the United States.

The researchers used these differences for their statistical model and found that movie revenues were affected positively in countries with a high Megaupload penetration.

“For each additional 1% pre-shutdown Megaupload penetration, the post-shutdown sales unit change was 2.5% to 3.8% higher, suggesting that these increases are a causal effect of the shutdown,” they write.

The shutdown of Megaupload caused a 7-10% increase in the number of digital sales and a 4-7% increase in digital rentals.

The results are based on sales numbers reported by two major Hollywood studios, and the researchers suggest that the effect will be similar for other film companies. Whether the effect will remain over time has yet to be seen though.

The large effect of Megaupload’s shutdown is quite surprising considering the fact that there are still hundreds of other sites offering the same content. According to researcher Michael Smith, Professor of Information Technology and Marketing, for some people “going legal” is the easiest option.

“Not everyone is as sophisticated [to find alternatives] and our results suggest that at least some people decided they were willing to pay a little bit more not to have to go through the “trouble” of finding the content on these other sites,” he told us.

Adding to this, professor Danaher says that the Megaupload shutdown was not an isolated event and also affected the policies and availability of pirated content through other cyberlockers.

In their paper the researchers explain that these results can help policy makers to assess the effectiveness of such interventions. That said, whether Megaupload has violated any laws is still something for the court to decide.

Interestingly, the findings do in part contrast with an earlier study. Last year researchers from Munich School of Management and Copenhagen Business School found that for smaller films box-office revenues decreased after the Megaupload shutdown. The same study found that box-office revenues for blockbuster movies increased in the same time frame.

Update: The study above was condicted as part of Carnegie Mellon University’s Initiative for Digital Entertainment Analytics (IDEA). IDEA’s creation was funded by the MPAA.

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Dotcom Given Green Light to Sue Kiwi Spies, But Evidence to be Withheld

Kim Dotcom and his associates have chalked up another win in their New Zealand extradition battle. Last year High Court judge Justice Helen Winkelmann gave Dotcom permission to sue GCSB, the Kiwi spy agency, for illegally spying on him on behalf of the FBI. The ruling was challenged by the Attorney-General but today the Court of Appeal announced that compensation can indeed be sought from GCSB. The downside is that access to evidence will again be restricted.

In June 2012 the police search and seizure raids against Kim Dotcom and other alleged members of the so-called ‘Mega Conspiracy’ were deemed to have been carried out illegally.

Two months later in August it came to light that a Kiwi spy agency, the Government Communications Security Bureau, had been spying on both Kim Dotcom and co-defendant Bram Van der Kolk. GCSB is not allowed to spy on New Zealand residents and was later forced to concede that it had unlawfully intercepted communications.

In December 2012 Justice Helen Winklemann ordered GCSB to be joined as a defendant to
Dotcom’s lawsuit against New Zealand’s Attorney-General over the illegal January raid and ordered GCSB to reveal details of their secret surveillance.

This High Court ruling was subsequently challenged by the Attorney-General and this morning the result of the appeal was made public. It’s a mixed bag, but with Dotcom and friends coming out on top.

The Court of Appeal said that although it is not usually appropriate for judicial reviews to include compensation claims, it would rubber stamp the request for GCSB to be added to the case. This means that Dotcom will be able to pursue compensation claims against the state during an upcoming hearing in April.

Going some way to balancing the success on both sides, the Court handed a win to the Attorney-General in respect of the earlier discovery ruling.

Previously the High Court said that GCSB must hand over all of the documents related to the secret surveillance operation carried out against Kim Dotcom and co-defendant Bram Van der Kolk. But the Court of Appeal ruled that discovery will now only stretch as far as revealing that information exists and where it was sent. Access to the actual content of the documents will not be permitted.

“We look forward to holding GCSB spy org accountable,” said Dotcom’s lawyer Ira Rothken this morning. “Doing so will not only protect @KimDotcom’s rights but the rights of all NZ residents.”

Following the Court of Appeal ruling, Kim Dotcom pondered whether the Kiwi government will continue to press the case against him.

“How much longer will the New Zealand government hurt its reputation on a global scale by supporting a malicious U.S. contract prosecution?” he said.

In closing the Court of Appeal urged all parties to “co-operate to ensure that the pleadings are brought into proper order and that the issues before the High Court are determined as expeditiously as possible,” but considering the complexity of the case, that won’t be anytime soon.

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