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  1. A pair of Internet providers who defied TV company demands to switch off their VPN services will be sued in the coming days. CallPlus and Bypass Network Services face legal action from media giants including Sky and TVNZ for allowing their customers to use a VPN to buy geo-restricted content. As Internet users demand more freedom online alongside an ability to consume media in a manner of their choosing, tools allowing them to do so are gaining in popularity. Notable has been the rise of VPN services, which not only provide an increased level of privacy but also allow users to appear in any country they choose. This opens up a whole new world of content availability – such as better service from Netflix – often at better prices than those offered on home turf. While popular with consumers, this behavior is frowned upon by distribution companies that spend huge sums of money on content licensing deals specific to their regions of coverage. Losing customers to overseas providers isn’t part of their plan and now some are doing something about it. Earlier this month media companies SKY, TVNZ, Lightbox and MediaWorks told several Kiwi ISPs that if they don’t stop providing VPN services to their subscribers, legal trouble would be on the horizon. Within days one of their targets, Unlimited Internet, pulled its VPN service after receiving a letter from a lawfirm claiming breaches of the Copyright Act. However, CallPlus and Bypass Network Services have no intention of caving in to the media giants’ demands. “To receive without warning a grossly threatening legal letter like that from four of the largest companies in New Zealand is not something we are used to,†wrote Bypass CEO Patrick Jordan-Smith in a letter to the media companies. “It smacks of bullying to be honest, especially since your letter doesn’t actually say why you think we are breaching copyright.†Pulling no punches and describing his adversaries as a “gangâ€, Jordan-Smith likens the threats to those employed by copyright trolls in the United States. “Your letter gets pretty close to the speculative invoicing type letters that lawyers for copyright owners sometimes send in the US ‘pay up or shutdown or else were are going to sue you’! Not fair,†he writes. “We have been providing the Global Mode facility for 2 years. In all that time, none of your Big Media Gang have ever written to us. We assumed they were OK with Global Mode and we continued to spend money innovating the facility and providing innovative NZ ISPs with a service that their customers were telling them they wanted – a service that lets people pay for content rather than pirate it.†The response from Bypass hasn’t been well received by the media companies who now say they will carry through with their threats to sue over breaches of copyright. “Our position has not changed and unless they remove the unlawful service we will begin court action in the next few days,†says TVNZ chief executive, Kevin Kenrick. “Each of our businesses invests significant sums of money into the rights to screen content sourced legitimately from the creators and owners of that copyrighted material. This is being undermined by the companies who profit from promoting illegitimate ways to access that content.†Claiming that the action is aimed at defending the value of content rights in the digital world, Kenrick says that the legal action is not consumer focused. “This is not about taking action against individual consumers or restricting choice, indeed each of our businesses are investing heavily in more choice so New Zealanders can have legitimate access to the latest TV shows and movies,†the CEO concludes. While the commercial position of the TVNZ chief is understandable, his claim that this legal action isn’t aimed at reducing choice simply doesn’t stack up. Kiwis using Netflix locally get access to around 220 TV series and 900 movies, while those using a VPN to tunnel into the United States enjoy around 940 TV series and 6,170 movies, something which Bypass Networks believes is completely legal. “[We provide our service] on our understanding that geo-unblocking to allow people to digitally import content purchased overseas is perfectly legal. If you say it is not, then we are going to need a lot more detail from you to understand why,†Jordan-Smith informs his adversaries. “Simply sending us a threatening letter, as frightening as that may be, does not get us there and is not a fair reason for us to shut down our whole business.†
  2. After a Spanish court ordered local ISPs to implement a nationwide ban against The Pirate Bay last Friday, several local media outlets published articles listing alternatives to the infamous site. As a result they're now under fire from entertainment industry companies including Paramount Pictures, with some even suggesting an advertising boycott. After being blocked by ISPs in more than a dozen European territories, The Pirate Bay has now been rendered inaccessible in Spain following orders from a local court. On Friday, Madrid’s Central Administrative Litigation Court No. 5 gave local service providers just 72 hours to stop providing access to the infamous site, with several responding much more quickly. It soon became evident that the ‘ban’ was easily circumvented by Internet users savvy enough to change their DNS settings, but access to ‘pirate’ content isn’t only available through The Pirate Bay. As a result ‘Pirate Bay Alternatives’ articles began appearing in local media, much as they have done in other countries subjected to ISP blocks. But while these popular lists are usually met with industry silence, in Spain they appear to have touched a nerve. Founded in 1903, daily newspaper ABC published an online article titled “Other Options After Closing The Pirate Bayâ€. It drew an immediate response from Jaume Ripoll Vaquer, co-founder of legal video streaming site “I see @ abc_es also continues the fashion of publicizing [sites that send traffic] to unauthorized content. Congratulations guys,†he wrote on Twitter. While that criticism seems to have done the trick (ABC withdrew the article, Google cache here), others weren’t so easily deterred. Published by El Confidencial, “Alternatives to The Pirate Bay: Where You Can Download Torrents in Spanish†provoked direct criticism from Paramount Pictures. In comments to ElDiario, Paramount Pictures’ promotions manager Laura Ruiz Andrino said that financially supporting publications that direct their readers to places where illegal content can be obtained is not something that should be entertained. And in a message to media managers at Universal Pictures and Sony Pictures, Andrino suggested that if sites like El Confidencial and ABC choose to support “illegal downloadingâ€, perhaps companies opposed to that stance should consider an advertising boycott. Another Filmin co-founder agreed. “When buying advertising one should also look at ethics, not only the audience,†he wrote. Fighting back, Alfredo Pascual, chief editor of the technology section of El Confidencial told HojaDeRouter that the withdrawal of advertising could be viewed as an attack on the media’s right to inform. “They end up attacking freedom of expression,†Pascual said. “My intention with this article is simply to show that the closure of sites is not a way to solve the problem. For every website that is closed there will be other ten, and this will be the never ending story until there is [a legal] offer that can meet the demand.†Noting that threats had been made to withdraw press passes from his publication’s culture section, Pascual remains defiant. “With each closing [of a website] I intend to publish another list [of alternative sites],†the editor concludes.
  3. A new study into IP litigation over the past 20 years has revealed that file-sharing has transformed copyright litigation in the United States. In particular, attacks against anonymous file-sharers dominated the landscape of the past decade, with just three companies now responsible for 93% of all John Doe lawsuits. Thanks to the development of advanced file-sharing systems and fast Internet connections, lawsuits aimed at alleged Internet pirates have become commonplace over the past decade and are showing no signs of disappearing anytime soon. The statistics behind the threats have been documented periodically but now a detailed study of IP litigation as a whole has painted a clearer picture of trends during the past 10 years. Published by Matthew Sag, Professor of Law at Loyola University Chicago School of Law, IP Litigation in United States District Courts: 1994 to 2014 provides a review of all IP litigation in U.S. district courts over the past two decades to include copyright, patent and trademark lawsuits over 190,000 case filings. Perhaps unsurprisingly one of the paper’s key findings is that Internet file-sharing has transformed copyright litigation in the United States, in one area in particular. “To the extent that the rate of copyright litigation has increased over the last two decades, that increase appears to be entirely attributable to lawsuits against anonymous Internet file sharers,†the paper reads. In broad terms the paper places lawsuits against alleged pirates into two categories – those with an aim of discouraging illegal file-sharing and those that exist to monetize online infringement. Category one is dominated by lawsuits filed by the RIAA against users of software such as Kazaa and LimeWire who downloaded and shared tracks without permission. Announced in 2003, the wave seriously got underway during 2004 and persisted until 2008, straggling cases aside. Category two is dominated by the so-called copyright trolls that have plagued file-sharing networks since 2010. These companies, largely from the adult movie sector, track down alleged file-sharers with the aim of extracting cash settlements. As illustrated by the chart below, so-called ‘John Doe’ lawsuits witnessed their first big boost during 2004, the year the RIAA began its high-profile anti-P2P scare campaign. The second big wave can be seen from 2011 onwards. “John Doe litigation in the second wave appears to be aimed primarily, if not exclusively, at monetizing infringement—i.e., creating an independent litigation revenue stream that is unrelated to compensation for the harms of infringement and unconcerned with deterrence,†the paper reads. “The availability of statutory damages is essential to the infringement monetization strategy. United States copyright law allows a plaintiff to elect statutory damages ranging from $750 to $150,000 for willful copyright infringement, regardless of the extent of the copyright owner’s actual damage.†Needless to say, this situation has encouraged some companies to file more and more lawsuits over the past several years in pursuit of profit. However, they have been required to adapt along the way. Between 2010 and 2012 lawsuits were typically filed against hundreds or even thousands of John Doe defendants at once, but due to increased scrutiny from District Court judges the average number of Does per suit has declined dramatically. “[in] 2010 the average number of John Doe defendants per suit was over 560; by 2014 it was just over 3,†the paper notes. “2014 still witnessed the occasional mass-joinder suit, but by this time the model had almost entirely shifted to suits against individual unnamed defendants.†Also under the spotlight are the types of content being targeted by trolls. Pornographic titles were behind the lion’s share of lawsuits since 2010 and in 2014 accounted for 88% of all ‘John Doe’ actions. What is also startling about this second category is how it has become increasingly dominated by a tiny number of plaintiffs. Back in 2010 the top three plaintiffs accounted for less than 25% of John Doe lawsuits but it wouldn’t stay that way for long. “In 2011 and 2012, the top three plaintiffs accounted for just under 50% of John Doe cases. In 2013, Malibu Media, alone accounted for 64% of John Doe cases and the top three in that year accounted for more than 75% of such cases. The top three plaintiffs in 2014 account for more than 93% of John Doe litigation filings in copyright,†the paper adds. Conclusion Despite the large number of lawsuits being filed against John Doe defendants, the paper dismisses the notion that litigation since 2010 is a broad-based phenomenon. In fact, it draws quite the opposite conclusion, noting that a tiny number of plaintiffs are effectively making a huge noise. “The trend from 2012 to 2014 is one of increasing concentration of plaintiff activity. In fact, the pornography producer Malibu Media is such a prolific litigant that in 2014 it was the plaintiff in over 41.5% of all copyright suits nationwide,†the paper notes. Finally, in respect of the activities of the plaintiffs listed above, Matthew Sag’s studyarrives at an opinion long held by many ‘troll’ critics. “John Doe litigation is not a general response to Internet piracy; it is a niche entrepreneurial activity in and of itself,†Sag concludes. Torrentfreak
  4. A new report released by Tru Optik shows that there are hundreds of millions of active BitTorrent users who together shared 18 billion files last year. The data is being used to show media companies the scale of the "unmonetized" demand for their products while offering a tool to target pirates with the right offerings. When major movie and TV companies discuss piracy they often mention the massive losses incurred as a result of unauthorized downloads and streams. However, this unofficial market also offers a valuable pool of publicly available data on the media consumption habits of a relatively young generation. Many believe that piracy is in part a market signal showing rightsholders what consumers want. This makes piracy statistics key business intelligence, which many large companies already actively use. Netflix Vice President of Content Acquisition Kelly Merryman, for example, previously said that their offering is partly based on what shows do well on BitTorrent networks and other pirate sites. One of the companies very active on the business intelligence side is Tru Optik. Unlike other monitoring outfits the company does not collect info on torrent users for legal campaigns or other enforcement purposes. “[Tracking users for lawsuits] is a worthless business model and we feel there is more value in helping content owners better understand consumers so they can monetize their attention than suing them,†Tru Optik CEO Andre Swanston tells TF. After tracking BitTorrent downloads for several years, today the company released a partial summary of the 2014 piracy landscape. According to its statistics torrent users shared 18 billion files last year, with movies and TV-shows accounting for half of them. The results offer insight into what’s popular on BitTorrent and where downloaders are based. Game of Thrones is listed as the most downloaded TV-show, for example, and Minecraft tops the gaming list. The United States harbors the most pirates according to the data, followed by Brazil and the UK. Tru Optik is using this pirate consumption data to help media companies make better business decisions. Piracy signals demand for a product and this data can be used to optimize legal offerings. “P2P users are some of the most important and influential consumers in the world. P2P consumption is also the best leading indicator of demand for media. If no one torrents your content that means pretty much it’s irrelevant to consumers between age 18 and 40,†Swanston says. “At the end of the day young P2P users trend more educated, more affluent, more likely to have a child and spend far more of their disposable income on media and entertainment than non P2P users,†he adds. The gathered data also allows the company to direct tailored ads at P2P users based on their IP-addresses. Hypothetically, this means that a Game of Thrones downloader can be targeted with an ad for a discounted HBO subscription the week before a new season starts. This positive approach is working well, according to the company. Swanston says that several of the top studios are already on board with the program, and no client has ever asked about enforcement options. “Several of the world’s top producers of original television and movie content have already started using our audience insight and measurement to drive strategic decisions on millennial facing content production, international licensing of content and evaluating new ways to distribute their content,†Swanston notes. Tru Optik believes that their approach is much more effective than traditional cookie and social media-based methods. Data comes from real people and allows the company to analyze interest across various titles and content categories. While not mentioned in the report, there are also downsides to the approach. An IP-address says very little about a person’s age, gender and other demographic variables, for example. On top of that, IP-addresses can be shared with multiple people, and single users can have multiple IPs. In total there were 970 million unique IP-addresses identified in 2014. However, it is likely that the number of downloaders is lower. In Australia there were more than 30 million torrenting IP-addresses, which is more than the country’s entire population. That said, the relative popularity of content in various countries and various intercorrelations can prove to be an important marketing tool for media companies. They can cater better to the “pirate†audience and convert people to paying customers. That could very well be a win-win for all involved. According to Swanston, it’s a must. “Any millennial focused media company, agency or brand that isn’t preparing for a massive shift to OTT and utilizing P2P audience insight in 2015 risks being left behind by their competitors by 2016,†he says.
  5. Canadian developer sells 61 percent stake to a pair of Chinese firms. WarframeDigital Extremes, the Canadian developer that worked with Epic Games on various Unreal Tournamentgames and the multiplayer mode for BioShock 2, has been sold to a pair of Chinese companies. Most recently, Digital Extremes launched free-to-play shooter Warframe for PC, Xbox One, and PlayStation 4. Multi Dynamic Games Group Inc. and Perfect Online Holding Limited (a subsidiary of Neverwinter studio Perfect World Co.) have acquired a 61 percent stake in Digital Extremes. Multi Dynamic has acquired the lion's share (58 percent), while Perfect Online bought 3 percent. The Darkness IIIf you're worried that decisions about where Warframe might go in the future will no longer be in Digital Extremes' hands, there's no need to fret, according to CEO James Schmalz. "We are thrilled with the potential to work with partners who share our philosophy on the future of gaming and how we're approaching it," Schmalz said in a statement. "This partnership will further empower us to continue making Warframe bigger and better with full control over its destiny." The acquisition has not yet closed, and is subject to several conditions. One of the conditions is the granting of exclusive rights to Perfect Online to publish Warframe in mainland China. That country recently lifted its 14-year ban on consoles, and the Xbox One went on sale in the region just last month, becoming the first console legally sold in China since 2000. Digital Extremes is not the first North American company to have sold to a controlling interest to a Chinese firm. In 2011, Chinese Internet company Tencent acquired a majority stake in League of Legends developer Riot Games. A year later, Tencent bought a 40 percent stake in Gears of War creator Epic Games. Digital Extremes also developed Star Trek, The Darkness II, and the PC version of Homefront. Add Rep and Leave a feedback Reputation is the green button in the down right corner on my post