Hotfile Researcher Discredits MPAA-Funded Piracy Study

The MPAA and file-hosting service Hotfile are ramping up their battle in court. To back up the claim that Hotfile is a piracy haven, the MPAA recently commissioned a study which stated that over 90% of all downloads through the site are infringing. However, in a confidential report obtained by TorrentFreak, a researcher hired by Hotfile points out that the MPAA's report is both "unreliable" and "unscientific".

hotfileLast year the MPAA started a lawsuit against Hotfile, one of the Internet’s most popular cyberlocker services.

The site’s popularity is “a direct result of the massive digital theft that Hotfile promotes,” the movie industry group said.

In an effort to back up this claim, the movie studios hired statistician Richard Waterman to discover what percentage of the downloads that occur on the file-hoster are copyright-infringing. Waterman previously conducted similar studies for the RIAA’s lawsuit against LimeWire and that of the MPAA against isoHunt.

Dr. Waterman’s report ultimately concluded that 90.2% of all daily downloads on Hotfile are infringing, opposed to 5.3% that are clearly non-infringing.

Hotfile, however, felt that this report painted an inaccurate description of their daily activities and went on to hire an expert of their own to look into the validity of the report.

The file-hoster commissioned Daniel Levy, Managing Director and founder of Advanced Analytical Consulting Group. His job was to evaluate how representative the MPAA-funded report is for the alleged infringements on Hotfile from the site’s inception up to the start of the lawsuit in January 2011.

TorrentFreak managed to obtain a copy of this confidential report which tears the MPAA-funded study apart. The main conclusion of Dr. Levy is that the Waterman report gives “no scientifically reliable estimate of the incidence of allegedly infringing behavior through the Hotfile website.”

According to Levy the 90.2% is based on a sample of downloads that is not representative for the total number of downloads that occur at Hotfile.

Among other things the Waterman report excludes downloads from nearly half of the world’s Internet users. Downloads via so-called Hotlinks are also omitted, and downloads of files that were submitted by anonymous users were not counted either.

“Dr. Waterman has provided no reliable scientific evidence about the overall population of downloads from the Hotfile website during any time period,” is Levy’s conclusion.

Aside from the claim that the evidence is unreliable, Levy also notes that the Waterman report overlooks the fact that Hotfile is also used for purposes other than downloading alone. As is common for all storage services, a large percentage of files are used for backup and are never downloaded by the public.

“Dr. Waterman has investigated only one aspect of how users employ Hotfile. He has not investigated the storage, file security and backup or single users’ file transfer across locations or devices for self use. Dr. Waterman has not investigated the alleged infringement behavior across the uses of Hotfile,” Levy writes.

Based on the same downloads source as the MPAA used, 54 percent of all files uploaded to Hotfile are never downloaded at all. This is indeed an important distinction to make, but not a flaw in Dr. Waterman’s report as that only looked into actual downloads.

In sum, the Hotfile funded report clearly reveals some issues in the MPAA study which may overestimate the actual infringement on Hotfile. However, whether the “real” percentage of infringing downloads will be lower is impossible to tell.

The MPAA and Dr. Waterman have let the court know that they still stand behind the report, and it’s now up to the judge to decide how to use it.

To be continued.

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