Illegal Downloads 150x More Profitable Than Legal Sales

Written by Ernesto on October 09, 2009 

Unlike most people might think, piracy is not necessarily a bad thing for copyright holders. In fact, German pirate-tracking outfit DigiRights Solutions shows that copyright holders can earn 150 times more money from illicit downloads than from iTunes and other legal stores.

TorrentFreak has reported before how pirates have been turned into cash cows by the copyright mafia. However, reliable statistics on how much money the entertainment industry and anti-piracy outfits make from illicit downloads have not yet been disclosed, until now.

The German-based anti-piracy outfit DigiRights Solutions (DRS) recently published an interesting PowerPoint presentation (in German) which shows how copyright holders can make millions from pirates. The document reveals some rather shocking statistics that show how illicit downloads are more profitable than legal downloads.

The presentation starts with some basic information on the various file-sharing networks, and details how the company’s software can detect illegal downloads and automatically send out requests for damages to alleged pirates. Their setup is similar to those at DigiProtect and Logistep who run comparable operations all over the world.

After finding out the addresses of alleged file-sharers they send out requests for damages directly, usually in the range of a few hundred dollars (or in the UK, around £600) per infringement. Thus far, little has been known about the actual profits generated by these operations, but this is exactly what the last part of the DRS presentation covers.

DRS says it generally sends out emails to alleged file-sharers requesting them to pay €450 (650$) per offense. According to the company they get to keep 80% of the money, leaving 20% for the copyright holders. The anti-piracy outfit claims it uses the money to cover their IT costs, administration costs, attorney fees and other costs.

So, for every illegal download the copyright holder gets €90 (130$), and that is where the presentation turns into a marketing talk where the company explains how piracy can be turned into profit. They start by comparing the profitability of legal and pirated downloads.

A legal online purchase of a song brings about €0.60 into the pockets of the copyright holders compared to the €90 per alleged file-sharer that pays up. So, the copyright holders get 150 times more from pursuing filesharers than from selling actual music, the company claims.

However, not everyone who receives a letter will pay up, but DRS says that an impressive 25% of all recipients do without asking questions. This figure is much higher than most people assumed previously.

But we’re wondering off here, let’s talk business.

DRS states that it’s realistic to track and pursue about 5,000 filesharers per month per title. Considering that 25% of those people pay the €90, then the copyright holders would have to to make about 150,000 online sales. Which is equal to the number of sales that are required for a Gold record award in Germany.

Ca-ching!

Companies like DRS have managed to build business models around piracy where the only purpose is to exploit copyright. Thus far they have been active in the UK (with ACS:Law) and Germany, but it’s just a matter of time before they expand their hunting grounds.

DRS and partners are by no means interested in protecting the rights of artists or how to deter people from sharing copyrighted work, it’s a solid cash machine. Undoubtedly it also raises questions whether these extortion practices should be allowed, or whether local governments should intervene.

Thanks Gulli.

Previously: AFACT v iiNet: Day 4 – BitTorrent Deals “Irrelevant”

Next: Court of Appeal Says ‘No’ Thrice To The Pirate Bay

110 Responses

1 Oct 09, 2009 at 23:48 by Evil Genius

It’s ’speculative invoicing’.

2 Oct 09, 2009 at 23:49 by Anonymous

Just think of all the money the RIAA has raked in with a similar extortion scheme.

3 Oct 09, 2009 at 23:57 by MissedMemories

God, I won’t read it.. I just have to say.. Wow!

4 Oct 09, 2009 at 23:59 by JTK

So, basically, they know that they have no legal right to do this, yet they know sone people will pay up anyway so they keep going for profit?

Disgusting.

5 Oct 10, 2009 at 00:01 by Anonymous

Good to see that old fashioned and plain simple racketeering and extortion is still alive and kicking and the best part it is legal to do it now LoL

Ok ok so it is not that good LoL

6 Oct 10, 2009 at 00:09 by Em

@2… similar ?!?! You mean a $1.92m fine compares with €450?

No man… RIAA and the whole MPAA fu.ckers are much worse!

7 Oct 10, 2009 at 00:11 by corrupt

its basicaly entrapment if they allow you to copy copyright from them, with the sole perpose is to catch you with it. and they would have to take your computer as proof you have commited the offence they say you have. its like the police selling you drugs then arresting you with them, wont stand up in court.

8 Oct 10, 2009 at 00:17 by digital future

This will likely drive the movement to more secure connections and encrypted data transfer so that detection will be much more difficult if not impossible. Make hay while the sun shines dudes, storm clouds are on the way!

9 Oct 10, 2009 at 00:22 by mu57i11

ahh when I saw the title I thought it was going to be good news. Encryption ftw.

10 Oct 10, 2009 at 00:24 by prodigydancer

/yawn

I’ve been hearing all this dumb nonsense since 1998 when I first started to participate in P2P. So let me please quote Bart Simpson: “Boooring!”

P.S. By the way, just increased my U/L speed by 50%.

/laugh
/flex

11 Oct 10, 2009 at 00:25 by SirReal

Its really terrible what heartless company’s are doing nowadays.

12 Oct 10, 2009 at 00:35 by SableSlayer

This pisses me off! its going to make piracy the new cash cow in which the media companys turn to for cash!

13 Oct 10, 2009 at 00:37 by prodigydancer

Come on, people. :-) Do you really believe this? It’s just social engineering.

Just stop and ponder for a moment. They’re trying to tell you that 25% people pay whatever they’re asked w/o question. Isn’t that ridiculous? Would you do that yourself?

Alright, average Joe isn’t too bright. But do you really know anyone who is stupid enough to fall for something like that?

14 Oct 10, 2009 at 00:53 by Carefully Watching

Extortion is a criminal offense which occurs when a person unlawfully obtains either money, property or services from a person, entity, or institution, through coercion.

Coercion is the practice of forcing another party to behave in an involuntary manner (whether through action or inaction) by use of threats, intimidation, trickery, or some other form of pressure or force.

How is this not extortion? OH thats right they got financial backing and lawyers..

15 Oct 10, 2009 at 01:01 by Sendaii

I’ve said it all along. They simply DON’T WANT TO STOP PIRACY, it’s way too profitable. I’d love to hear what Reasoned Mind has to say here.

Also, I am in the process of translating the PowerPoint into English if anyone wants to read it.

16 Oct 10, 2009 at 01:10 by it's_all_about_the_money

LOL!

Morons will always get pwned, that’s what they get for using crappy p2p networks.

And a little maths here :

1 fine = €450 = 8 years Premium Rapidshare = Lifetime Megaupload Account + Change = 8 years Netload Account = 2 years Rapidshare + 2 years Netload + Lifetime Megaupload account .

I’m not familiar with USENET, but you could apply the same maths to it.

Do yourself a favor; instead of handing over €450 to the cashmongers, go with more secure methods of downloading.

17 Oct 10, 2009 at 01:17 by DeathStalker

#6

Sorry to break it to you, but stings and controlled buys are NOT the same as entrapment – they are perfectly legal and absolutely stand up in court. Entrapment means that some sort of “persuasion” or “promise” is used to get someone to do something that they would not “ordinarily” otherwise do.

Normally I’m *very* pro-law enforcement – but making things like downloading a criminal offense is about as stupid as anyone can get. The existing IP laws (which a good in concept and intent) have been perverted and twisted in ways they were never intended to be.

However, what these 3rd party companies and the entertainment industry are doing IS illegal – it IS racketeering (and last I heard there was at least 1 lawsuit against them on those grounds). The only reason they are *not* being pursued by legal forces, is because of the deep pockets they have and the number of corrupt officials (worldwide) that they have bought.

#13

Well, while I agree in spirit, it’s just not that way in reality – people look at the judgments that have gone against almost everyone who has tried to stand up to the industry and think, hell, the amount they’re asking is a LOT less than I might have to pay if I lose in court. Most people don’t like to gamble with the deck stacked against them.

I keep saying though, that the time WILL come when they try to sue the *wrong* person, and that person has enough $$$ to mount a successful defense.

It’s just a matter of hanging on for the ride until they become extinct.

Too bad more artists can’t/won’t/don’t sue the labels – and even when the Recording Industry falls, which I think will happen first , we’ll still have the motion picture industry to deal with – and they certainly won’t go down as easily.

18 Oct 10, 2009 at 01:20 by Old Timer

@14 Carefully Watching,

Interesting…I wonder how many people are saving those letters to join the class action suit for extortion since it seems to be the case by your definition….I am no lawyer (just was married to one) but that doesn’t sound legit…they are counting on peoples ignorance and not wanting to contact a lawer (fees etc) to fight and just want it to go away…what they don’t realize is that if you don’t have a signed legal document from a court stipulating that you are good to go, then they can turn around and sue you again…over and over…sort of like the goose that laid the golden egg…

I hope the powers to be solve this soon.

19 Oct 10, 2009 at 01:21 by Old Timer

@16 it’s_all_about_the_money, Mozilla has a plugin that bypasses the wait period so that you don’t have to buy an account…read it on MSNBC…so it is still free.

20 Oct 10, 2009 at 01:25 by h33t

excellent piece of reporting, thanks :-)

21 Oct 10, 2009 at 01:30 by Nef

All right, I´m german, and have been
pirating/filesharing for over a decade now.
So let me tell you this: Whatever DigiRights Solutions says, is simply wishfull thinking. I never had any problems, nor did any of my friends.
I use at least 10 GBs of bandwidth a day, so I´m guessing my ISP doesn´t have any illusions, but still, even ID id received some obscureletter, I´d just shrug it off, because NO german judge would pursue a simple filesharing case.
The courts are flooded with IMPORTANT cases, so what the heck…

It´s the same BS as ever:
you get a letter and react, it´s yout fault, ´cause you´re a dummy … ;)

22 Oct 10, 2009 at 02:02 by wonderwhy-er

I find it hard to believe that 25% pay… I just don’t know of legal grounds for that kind of activities.

BTW I have a fun idea for Germans. If as they say they send so much letters someone should make some site like http://www.ScrewDRS.de where people could post that they received such letter and discuss how they act as group :) Let me see them bringing 5000 persons per month per title to court. And even if they try to go after only biggest to show a scary example then probably other could ask to join the case on the same grounds as they helped to share those files trough P2P so that person does not takes whole blame :D We share not only the files but responsibility for sharing them too :D

23 Oct 10, 2009 at 02:25 by Reasoned Extortionist

So what’s the problem?

Everyone knows the only purpose of copyright is to fleece the public and not to “protect” the actual artists … my RIAA cohort and fellow MAFIAA gangster neo|douche can tell you more… <3

24 Oct 10, 2009 at 02:44 by LMFAO

I wouldn’t expect a comment from Reasoned Mind/NeoStyles here because this just goes against what they have been BREINwashed to believe!

They never comment on anything that puts their bosses in a bad light, because as everyone on here knows they are both corporate shills and trolls.

25 Oct 10, 2009 at 02:52 by Bobe-On (Whose Hands?)

Another alternative to sharing certain files is to share “F/L/OS” files. Free and/or Libre and/or Open Source.

By doing so, you not only get to strangle the industry (and its battery of cohorts, like lawyers, judges, cops, industry acts) and bypass it altogether, but you also get to enjoy/support better product/file-sharing/models/licenses, etc..

What fun.

“Lawless class actions”. ;)

I’m sure there are other benefits, but there’s the ball rolling.

When the law isn’t working, we eventually have to take it into our own hands or it will take us into theirs.

26 Oct 10, 2009 at 02:54 by Gargamel

private sites FTW :D

27 Oct 10, 2009 at 03:24 by enar

DigiRights Solutions probably offers up songs via bittorent (under a psuedonym no dobut) which they probably track to ensure a ready made steady stream of illegal file-sharers…

28 Oct 10, 2009 at 03:27 by Reasoned Mind

It is shameful that one has to buy such expensive service from a private firm to protect one’s basic rights.

Government, and judicial system have failed multiple times when artists asked protection for digital harassments they received.

Now the victims have decided to solve this themselves, and not surprisingly, they implement harsh measures to protect themselves.

29 Oct 10, 2009 at 03:41 by .neo.styles|nvDX

Wow, we’ve really gone overboard, haven’t we? First people are trying to convince themselves that piracy is harmless and now we are arguing that piracy helps people? If that was true, then why would carry out multi million dollar legal campagins. Contrary to what some people thing, the RIAA has better things to do with their time and money than scare people and while they might be going a bit overboard, I think they are just doing what they think is in artists best interests.

That aside, how is it actually possible that piracy helps people? We do realize that, in order to earn money, copyright holders have to be paid by their custemors, right? .. And that is exactly what bittorrent piracy helps people to avoid to doing : paying copyright holders for their work. You see, you can’t earn money without being first paid (I would have assumed this was obvious.)

As for the lawsuits, weren’t we just arguing about how the so called MAFIAA is the only one profiting from these legal situations? So, which one is it?

Look, honestly, copyright holders prefer paying for things other wise they would willingly offer their work up for free. Is this what is being proposed, that we replace the thousand year old system of payment with one that is completely devoid of capitalism, where we allow people to pirate things and then earn money from the inevitable law case? Is this the glorious new system that pirates want to usher in. Are these the changes that pirates want to bring to society? Pirates have often mentioned that we need a new business model. Maybe this is actually what they have in mind.

Where do I start? This flimsy theory is held together by pure assumption?
1) No garuntee that they are going to win the trial. Although it seems very obvious that somone who ripped someone off should be accountable for their actions and compensate the victime, things often don’t work out like this.

Somone cannot invest their life in a career (being an artists for example) if they aren’t guaranteed fair competition and profit from their work. Would you get a job somewhere if they said “we might pay you”?

2) It is counter intuitive. If people are allowed to pirate things, then people will never have the money to pay the legal fees in the first place and thus the pirates get off and they make no money from this so called business model.

3) Court cases take time and money. No one wins. The state has to pay money (where do you think your tax dollars go?) and, as it is, the legal system is already overtaxed? Why condone an idea that will create more unnecessary cases to clog up the legal system?

4) Many best selling albums make much more money off of album sales (with the contemporary levels of piracy) than a few court cases would. This assumes that everyone who downloads the song/album gets sued. In reality, only a few people do.

30 Oct 10, 2009 at 04:17 by Old Timer

@28 Reasond Mind….
I am going to have to challenge you on basic rights.

Basic rigths for people are life, liberty, happiness and unjust religeous prosecusion.

In Canada you can add due process to the list.

If a company had an issue with a specific copyright infrignment then they can file a claim under due process…under existing laws.

Unfortuntaly we pay a social tax on all recordable media that allows for sharing of media. That is up for debate I grant but at this point sharing media is compensated to the CIRA (RIAA) by the social tax so without a Supreem court ruling to the contrary then that is how it stands…other contries have similar stands. Like in Germany it is lawful to share…

sorry, not all contries are the same with respect to archaic laws on copyright….it should be similar to Patent laws that someone has to apply for it and defend real worth…

31 Oct 10, 2009 at 04:52 by Ben Jones

“3) Court cases take time and money. No one wins. The state has to pay money (where do you think your tax dollars go?) and, as it is, the legal system is already overtaxed? Why condone an idea that will create more unnecessary cases to clog up the legal system?”
State doesn’t pay money. It’s a civil case, the costs of the case are bourne by the loser. That’s why it’s to the advantage to spin the case out, you take the defense costs high enough that they can’t pay them, and thus settling is cheaper – thats exactly how this business model works. I haven’t done anything, but do I pay $500 to make it go away, or do I sink $15,000 into defending myself, and get it back a year or two later (I’m lowballing on the cost, I believe it took 2 years, and around $107,000 for Tanya Anderson to prove her innocence to the point where the RIAA conceded with prejudice http://torrentfreak.com/riaa-pays-up-in-anderson-case-080814/)

It’s using the legal system itself as a method of punishment. You can read more details from a lawyer that’s been involved in the cases – http://torrentfreak.com/copyright-lawyer-exposes-riaa-legal-bullying-080730/

32 Oct 10, 2009 at 04:53 by Cygnus

I stay at Sony’s hotel in Tokyo all the time for business… and download tons of songs on their network lol. I wonder if they’ll pay their own fines.

33 Oct 10, 2009 at 04:54 by .neo.styles|nvDX

So in other words, everyone earns the same amount of money, regardless of how good their work is? There is no distinction between a timless artists and a mildly successful one? Basically, you are already setting their limits for how big they can become? Seems pretty communist to me.

This is why I love America. Your level of success is determined by YOUR talent and your hard work. The harder you work, the better you will become at what you do. It’s not some conformist crap like canada has.

34 Oct 10, 2009 at 04:57 by .neo.styles|nvDX

State doesn’t pay money. It’s a civil case, the costs of the case are bourne by the loser. That’s why it’s to the advantage to spin the case out, you take the defense costs high enough that they can’t pay them, and thus settling is cheaper – thats exactly how this business model works. I haven’t done anything, but do I pay $500 to make it go away, or do I sink $15,000 into defending myself, and get it back a year or two later (I’m lowballing on the cost, I believe it took 2 years, and around $107,000 for Tanya Anderson to prove her innocence to the point where the RIAA conceded with prejudice http://torrentfreak.com/riaa-pays-up-in-anderson-case-080814/)

Nope, copyright violation that exceeds $2000 is criminal. Most people who share files don’t just share a few songs. They download movies, games, etc. Who do you think pays to keep the court operational? Handle all the obligatory desk work? Pays the judges salary?

35 Oct 10, 2009 at 05:01 by Reasoned Mind

@28 (Reasoned Mind):

Please articulate your arguments better. I saw several grammatical errors in your post.

36 Oct 10, 2009 at 05:02 by Anonymous

http://serendipity.ruwenzori.net/index.php/2009/10/08/french-presidency-makes-400-unauthorized-copies-of-dvd

Strike 2 for sarkozy!

i.e.: Strike one was when he pirated music in one of his videos.

http://www.cbc.ca/arts/music/story/2009/04/29/mgmt-sarkozy-settlement.html

37 Oct 10, 2009 at 05:28 by LoL

All i can say ill lawl and WoW!
Now back to my dwnloads XD!

38 Oct 10, 2009 at 05:39 by hahahahaha free shit

they get ripped by the people helping them…..hahaha maybe they should sue them..lol

39 Oct 10, 2009 at 05:43 by Old Timer

Wow I think Neo Styles is drunk,
is rant is pretty out there…but here…ckeck this out.
“Look, honestly, copyright holders prefer paying for things other wise they would willingly offer their work up for free. Is this what is being proposed, that we replace the thousand year old system of payment with one that is completely devoid of capitalism,”

Thousand year old system for copyright doesn’t exist….playwhites in the 1700’s were secrative because they didn;t want other touring groups to put on their plays without compensations…

I call a FUD

40 Oct 10, 2009 at 05:47 by seko

so, stop FUCKING whining, industries

41 Oct 10, 2009 at 06:53 by Corporate Leech

Woohoo, this means we no longer need to cultivate and promote new talent anymore! Not when we can just milk the proverbial piracy teat from now until kingdom come! Now I’ll finally be able to afford that gold plated hot tub with diamond trim. Hopefully the phishing scam artists out there won’t catch wind of our scheme and ruin it for everyone by sending out fraudulent claims via mass mailings. At $130 per infringement and a 25% chance of payment, who can resist such a great deal?

42 Oct 10, 2009 at 07:12 by .neo.styles|nvDX

Thousand year old system for copyright doesn’t exist….playwhites in the 1700’s were secrative because they didn;t want other touring groups to put on their plays without compensations…

I said payment, not copyright. Please learn to read. What is a playwhite? Someone who plays games dressed in white? Those plays weren’t owned by any company either, im guessing.

43 Oct 10, 2009 at 08:05 by Bobe-On

Oct 10, 2009 at 04:53, Cygnus wrote:

I stay at Sony’s hotel in Tokyo all the time for business… and download tons of songs on their network lol.

lol… File sharers are Everywhere doing their share.

Oct 10, 2009 at 05:43, Old Timer wrote:

I call a FUD

A drunk FUD

44 Oct 10, 2009 at 08:21 by a/s/l

it’s political correctness gone mad!

45 Oct 10, 2009 at 09:17 by knux

Ultimately, this will be taken care of before piracy is… And, if anything, will only help pirates in their claim that internet neutrality is the only legal route to go forward in the future.

46 Oct 10, 2009 at 09:39 by B_Bunny

I don’t get how they can send automated infringement letters to people by email – how can they connect the IP address to an email without going through the courts/ISP?

Thanks!

47 Oct 10, 2009 at 09:57 by Justice

Bunch of kaffirs

48 Oct 10, 2009 at 09:59 by Lothor The Evil

Technically this is extortion. No, claiming entrapment won’t hold up in court. Why? Because their argument is, and the judge would agree, “you wouldn’t have gotten caught, if you didn’t do anything illegal in the first place”.
That’s what happens when police have undercover officers posing as prostitutes. Technically entrapment, but cops get away with it. Same with anti-pirates. Entrapment never holds up in court for the person(s) entrapped. :P

If I ever get a letter from an anti-pirate organization, I’ll wipe my ass with it until it bleeds. It’ll be worth the hemorrhoids.

49 Oct 10, 2009 at 10:05 by Lothor The Evil

@42 B_Bunny
“I don’t get how they can send automated infringement letters to people by email – how can they connect the IP address to an email without going through the courts/ISP?”

Alot of ISP’S allow people to make an e-mail account through them. Also with some ISP’S, you are assigned an e-mail address. Doesn’t matter if people use that e-mail or not. If a copyright infringement notice is sent to a customer’s ISP e-mail address and the person never looks at the e-mail, it still counts as sending a cease and desist notice, and would hold up in court if it went that far. That’s one way you can lose a case against them if you don’t show up to court to defend yourself, even though you never knew you were notified. I something like that happened to The Pirate Bay crew.

50 Oct 10, 2009 at 10:09 by Lothor The Evil

oops. my last sentence in my comment at #45 was suppose to be:
“I THINK something like that happened to The Pirate Bay crew.”

They were summoned through twitter or something like that, they didn’t show up to court and lost the case automatically.

51 Oct 10, 2009 at 10:12 by Lothor The Evil

@ Ernesto & Enigmax

Thanks for having a great site and keeping us informed. :D

52 Oct 10, 2009 at 10:53 by Soundwave (Have A Cigar)

It’s fitting that DRS stands for Dirty Rotten Scoundrels.

Forming Pirate Parties, and voting by a torrential landslide, we have to get the Puppeteers out of the government’s pockets, and replace them with some Buccaneers.

53 Oct 10, 2009 at 12:03 by Whatever

When companies hold presentations there are no facts just statistics which are lies themselves. To actually make any money they first need clients who want those letters sent. So if you want you’re business to work you will tell your clients what they want to hear (like 25% pays out).

And some technical problems:
How to have a steady stream of 5000 a month per title as usually most torrents or other networks (ED2k, slsk, gnutella including hiding filelists, fake servers/files and/or not sharing) don’t have 5000 seeders at anyone time and the only way of knowing someone has the actual complete file is if they upload/download it completely to/from every person themselves.

How can they send E-mails without having E-mail addresses, they only have IP addresses ? Which provider is selling out their customers in Germany by the bundle and breaking privacy laws (maybe they don’t exist in Germany)?

And a funny quote from mind-neo:
“multi million dollar legal campagins.” …. that didn’t end up in the pockets of the artists.

They (neo-mind-and so on) never did give a clear answer for the total amount of damage from all money which is being put into anti-piracy measures (DRM, lawyers, lobbyists, programmers, judges and so on)
There are more leechers who thrive of the work from artists within the “industry” (like reasonless mind) than in filesharing. If one would only consider the money consumers need to spend on decoding equipment and power usage of it that will not available for buying anything else.

(keeping analog TV until it dies)

54 Oct 10, 2009 at 12:06 by Whatever

Just noticed #45 Lothor The Evil already pointed out the thing about the E-mail addresses.

55 Oct 10, 2009 at 12:09 by Whatever

Sorry again, it’s saturday and for me still early i suppose…

And just looked again to quick at the comments, he did not point it out just quoted an earlier comment from #42.

56 Oct 10, 2009 at 12:11 by Kickass_Sid

The numbers look a bit stupid and the whole scheme seems to be more of a criminal than legal solution!

57 Oct 10, 2009 at 12:48 by John

Here’s a thought… if you get the said letter, use it for your parakeet cage. 25% is unbelievable. Know your rights, people!

58 Oct 10, 2009 at 13:13 by billybong

shes not bad on that tv thing, nice pair luv

59 Oct 10, 2009 at 14:15 by TheHumptyDumptyTroll

@17 DeathStalker

‘Sorry to break it to you, but stings and controlled buys are NOT the same as entrapment – they are perfectly legal and absolutely stand up in court.’

That’s true for US for official authority. In europe it is not so. In Germany only official agents under very limited circumstances can use entrapment legally.

For civilians it is illegal to goad people into committing a crime. But the case in the article is about a third party profiting from an ongoing supposed crime. The legality of such an operation hasn’t been field tested in court, and it wouldn’t be a big surprise if it turns out to be illegal, since the point of the recent copyright enforcement laws is about prohibiting, not profiting.

But who knows, they use statistics of illegal downloads to set the price for the licensing rights, and for commercials.

60 Oct 10, 2009 at 14:17 by Ben Jones

“Nope, copyright violation that exceeds $2000 is criminal. Most people who share files don’t just share a few songs. They download movies, games, etc. Who do you think pays to keep the court operational? Handle all the obligatory desk work? Pays the judges salary?”

In which country is that law? The US, the UK, The netherlands? Every country has it’s own laws, and if a case is in the UK, it doesn’t matter one bit what the US law is. And the location of the case is where the defendant is.
Salary’s are paid from the court budget, which is mostly obtained through the fees it collects through cases (go look at your local courts, I do believe the north California courts put them online.

“Your level of success is determined by YOUR talent and your hard work.”
Unless you can convince someone that you SHOULD have done better, but someone else took your money, but you can’t prove it. And I think we’ve all experienced that talent and success do not have a correlation. Like politics, or fashion, it’s all down to the marketing spend.

61 Oct 10, 2009 at 14:31 by Anon

Guys, nobody deserve to be extorted for just being a filesharer, no matter how “stupid” you think they are.

The “suit yourself” mentality needs to go away now when it’s clear there is no free will.

62 Oct 10, 2009 at 17:54 by Matheus Svensson

I don’t know about ca-ching, we need caching! The link to the PowerPoint file in this article now gives a 404 error. It’s not that surprising that The Hacker Company have yanked it from their website. For the moment, the English-language version is still available:

http://www.webfact-test.de/hc/english/ppt/praesentation_en_gesamt.ppt

63 Oct 10, 2009 at 19:11 by diarRIAA

Actually, it’s also profitable to not extort from people creating negative publicity for you and sending curiosity-seekers flooding to ’said’ illegal service of which they try it out themselves and then realize they have a gold mine of their own absolutely free.

It’s also profitable to not sue children, disabled welfare families and dead people getting the ire up of media fans that are all going to end up boycotting you and then seeking free gold mines where they can get all that they want for absolutely free.

It’s also profitable to not spend money on lawyers and suspicious outfits that attempt to fly under the radar of the law in order to investigate, target and extort from media fans.

So you see, Mr. Media Company, if you used some brains and never started out your questionable tactics against fans and potential fans, you wouldn’t have started this snow ball effect in the first place. If you left it alone you would have maybe 5 or 10% piracy, but now you have what…let me say….85% thanks to you?

How about how you, Mr. Media Company, that pays trolls to go out in forums to spread your anti-piracy messages with glee. Do you really think this is working? No one is ever going to agree with them. This is a further waste of your expenses because no one is going to listen to them, in fact it makes pirates even more pissed off and they become even less interested in buying media.

Now your desparate acts of trying to take peoples computers away, to disconnect them completely from the internet, and further reducing at your customer base and potential customer base is playing against you even further.

Keep going this route and keep blaming the pirates when it is in fact you that is destroying yourself, not us.

There you go neo.tard and reasoned.tard…go report that back to your bosses.

64 Oct 10, 2009 at 20:04 by thecamlayton

How about a notice that says something like, “You downloaded X amount of media. The market value is Y. Please help support the artists you enjoyed by paying Z (less than or equal to Y). Then give 90% to the artists and 10% to run the system (or at most what is necessary to run such a system). All the other bullshit can go away.

65 Oct 10, 2009 at 20:33 by Ollie

“copyright violation that exceeds $2000 is criminal. Most people who share files don’t just share a few songs.”

Not defending neostyles here but just a small correction: in the US, according to 17 USC 506, it can be pursued as a criminal case if there’s 1 or more infringing works totaling $1000 retail value distributed within a 180-day period. There’s a 5 year statute of limitations as opposed to 3 for civil. Penalty is up to 3 years in federal prison (and all that goes along with being a convicted felon afterward) if there were 10 or more infringements worth over $2500, up to 6 years for each subsequent offense of that level, up to 1 year otherwise.

However there’s yet to be a single criminal case brought against a copyright-infringing file-sharer in the U.S., AFAIK. People speculate that this has to do with the burden of proof being higher in criminal court, that criminal court judges won’t put up with the kind of b.s. the civil ones do, that it’s a lot easier to abuse the civil courts as described in an earlier comment, and that prosecutors & investigators are busy with much more serious crimes. Probably also it’d be a p.r. disaster, like the two recent civil trials, despite the ‘favorable’ outcome for the plaintiffs.

66 Oct 10, 2009 at 21:13 by tom

To all people that are going on that this is extortion, unlawful etc etc:

It is absolutely lawful in Germany and the basic idea isn’t even that bad. It is designed so that company X can send a formal letter ‘Abmahnung’ to someone infringing on copyright or whatever without filing a lawsuit, thus keeping costs down. Note that this is not at all specific to copyright issues and that only the cost for writing/sending that thing can be put on the recipient. Trouble is law firms are using this mechanism as a cash cow and have been able to get away with claiming costs of hundreds of euros per letter.

67 Oct 10, 2009 at 22:58 by BIOS Hazard

This kind of thing is worse than the actual crime of illicit downloading.

68 Oct 11, 2009 at 00:00 by SM

This solution is not sustainable. The de facto stalemate of “mouse and cat game” will happen and no one will win

69 Oct 11, 2009 at 00:19 by Stefan

so, tech noobs pay way to much for music, and the sort of people that visits sites like torrentfreak get free music. and the music biz stays making it’s music.

ok, sounds good to me :)

70 Oct 11, 2009 at 00:30 by Doc

I hear lots of anti-corp and anti-pirate sentiment. The Artists and the people who are willing to pay money to encourage the artists to produce more are being left out though.

I beleieve the corps are in the wrong for their blatant, unapologetic exploitation of creative people. I also believe pirates are in the wrong for driving artists back into the shackles and slave pits of Established Big Entertainment if they want to make real money or produce more than small-budget works.

Read this, think about it, and feel free to comment and debate. Please keep it respectful though. http://tinyurl.com/yhxw3k7

71 Oct 11, 2009 at 02:04 by Reasoned Mind

Look everyone, I am sorry I said anti-Pirate statements. I quit 1 minute ago! So I started Downloading some music from BitSnoop. Pirating is actually better. Thanks for enlightening me. Thank you so much. I am finally listening!

72 Oct 11, 2009 at 03:13 by by Reasoned Mind

@35 Reasoned Mind

Please articullatte your argumments baiter. I saw severals gramaticals error in your post.

73 Oct 11, 2009 at 03:17 by By like Reasoned Mind

Back to work! Yami more monies for me! Haha!

So according to you and in another way, everyone, from the RIAA sanctioned stuff of Britney spear as well as Beethoven who by the way used the tune of countless RIAA song illegally shall earns the same amount of money, regardless of how bad she worked to kiss asses?

How many asses Beethoven kissed? ZERO! Ha!

So for you there is no distinction between a timless prostitute such as Britney Spear who went to the enormous effort of having sex with so many ho! so many old and fat music exec who could have been her father and a possibly talented indy artist who is too lazy to compromised herself and who is trying to make it just by singing great or writing great song?

So are you saying that Britney slut should not have made that’s much money for showing her but on TV?

So for you basically, you are already setting a limit on Britney even before she even become too old for this type of job? This sound like comunist to me and I am going to call Mr Mk Carthy on you! You evil popoff!

This is why I love the music industry form of capitalism RIAA style, rectified 1980. The more you get fucked the more money you make and the music have nothing to do with that.

It’s not like in canada where people still believe in music instead of money and sex.

Haha I am making a bundle on this one! $$$$!

74 Oct 11, 2009 at 04:42 by Joan Nyobe

Downloads should be free. We pay out the ass for every computer related gadget or program. Why can’t we have something free?

75 Oct 11, 2009 at 04:52 by Reasoned Mind (Reason)

“Surprised to see me?
…I don’t fully understand how it happened, perhaps some part of you imprinted on to me, something overwritten or copied, it is at this point irrelevant. What matters is whatever happened, happened for a reason…”
–The Matrix Reloaded

76 Oct 11, 2009 at 04:53 by MAFIAA

@thecamlayton (64) …

That would be somewhat reasonable and would not be obscenely profitable.

How can you possibly expect us to be reasonable and stop being overwhelmingly greedy while we’re busy playing the victim and engaging in outrageous and disproportionate lawsuits?

You don’t understand, we produce crap, you pay and pay and pay and pay. We profit… and that’s all that matters.

Please, understand how our system works.

No matter how much the consumers are saturated with increased choice of products, we deserve to make the same gross profits year on year, even as distribution costs drop and as independent competition increases, we will not accept that the perceived/market value of media content is plummeting, so please, stop before we have to sue you and ruin your credit rating permanently through our sheer greed and stubbornness.

Have an overpriced day!

Yours greedily,

The MAFIAA Cartel

77 Oct 11, 2009 at 06:00 by Doc

By the way, I forgot the obligatory FUCK YOU to that ass Neo…

78 Oct 11, 2009 at 07:08 by xmido

capitalism and copyright, turning anything into money. its getting crazy and stupid at same time

79 Oct 11, 2009 at 07:55 by Reilly

“Undoubtedly it also raises questions whether these extortion practices should be allowed, or whether local governments should intervene.”

I’m sorry, but this assertion doesn’t make sense at all. Copyrights are a function of government in the first place. The only reason music unions are able to “collect” this piracy money is BECAUSE the GOVERNMENT enforces the practices.

Government is in fact the group of individuals who do the extorting on behalf of the corporations–it’s not like the people who knock down your door asking for piracy money are the RIAA accountants or something.

80 Oct 11, 2009 at 07:58 by Reilly

I would also point out that this practice has nothing to do with profit. Profit is gained from voluntary interactions of individuals, buying and selling goods/services. A completely legitimate concept.

When piracy laws are enforced, it’s theft, not “profitable business practices.” When “pirates” are requested to pay a fine, they obviously aren’t paying it voluntarily. It’s forced upon them by the police with guns, on behalf of music unions.

It’s a misnomer to say that this is a “profitable” thing, since the money is not profit–it’s stolen goods.

81 Oct 11, 2009 at 07:59 by E

To put it more concisely:

€112,500 = your profits if you send infringement letters to 5000 pirates or if 150,000 legitimate customers buy your song

82 Oct 11, 2009 at 10:56 by pirateprideWW

Keep boycottin’ ‘em. Haven’t bought an RIAA CD in years, and that’s intentional. These dinosaurs will die, don’t make any mistake about it, and we can speed up their deaths if we don’t buy their product.

83 Oct 11, 2009 at 12:36 by NoSympathy

@All industry sympathizers…

Welcome to the year 2009.

If you choose to, you can have content distribution overheads at nearly zero.

The sheer saturation of media content through what is available online (including that offered for free by it’s creators) has greatly reduced the perceived value of content.

The industry refuses to accept that a song, using the Internet as the form of distribution, is really worth $0.10 and still thinks that one dollar is reasonable per track.. IT’S NOT!!

Piracy will never go away because the RIAA will never accept the devaluing of their product, which was inevitable from the rise in popularity of the Internet and the pressures caused by other forms of new media.

Yes, it’s a stalemate and until the RIAA drop their per-track price to $0.10 or something even remotely reasonable… they will continue to fail in their efforts to thwart piracy.

Sadly, for the industry, the times of peddling out cookie-cutter tracks from half-talented, over-hyped artists… and everyone leeching a luxury lifestyle from it… ARE OVER!!!

You can’t work a couple of months and expect to be made for life, yet the RIAA, etc. still continue to think this is how it’s going to be, while everyone else has to work their entire lives just to pay off their damn mortgage.

They shat on consumers with price-fixing and they stubbornly refuse to accept that saturation has caused a major devaluing of pretty much all it’s “product”.

The RIAA, et al, have themselves to blame.

We know how cheap it is to produce and distribute music, pirates are simply consumers that refuse to continue the trend of being suckers to a greedy and stubborn industry that has shafted us all, for over a decade.

If content was available at a reasonable price, I’d stop pirating, but it’s not, they (RIAA, etc.) continue to price things as if the production and distribution overheads were still the same, and that, to anyone with a brain, equates to being conned!

Do I choose to be ripped off? or choose to get stuff for free, knowing that my defense would be far more solid than most people who post here?

The answer is obvious.

84 Oct 11, 2009 at 13:00 by sax0nNZ

This is stupid. Eventually people will realise that nothing happens if they don’t send the money. The title in this story is misleading. There are no sales made. This whole site is a bunch of pirates trying to justify themselves ripping of musicians. Unless it’s nickelback or some commercial shit like that. In which case keep on pirating.

85 Oct 11, 2009 at 13:04 by sax0nNZ

… and also I don’t mean people who make millions. No one cares. It’s the small bands who will never be able to make a living off their art. The consumers never get to here them either so it is a lose lose situation.

86 Oct 11, 2009 at 14:47 by paula

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87 Oct 11, 2009 at 17:28 by viktor

“the company’s software can detect illegal downloads and automatically send out requests for damages to alleged pirates”

HOW THE F*CK do they “DETECT” that????????

if i share a file with the name “Britney Spears – F*ck me Now.mp3″ even though it’s some PDF they automagically “DETECT” i’m a pirate??????

that shit blows my mind, seriously.

88 Oct 11, 2009 at 17:34 by viktor

and i forget:

1) how do they differ from pirates when they “DETECT” piracy? they need to try and succeed to DOWNLOAD stuff, and then VERIFY that it’s copyrighted material.

2) how are they allowed to get PERSONAL INFORMATION about people?

2) since THEY ARE NOT COPYRIGHT HOLDERS how can they claim for damages?

they are illegal in 3 terms, they are worse than pirates, sue (kill) them!!

89 Oct 11, 2009 at 19:18 by Anonymous

I think neostyles is the one who needs to learn to read, since you totally missed the point of the article, how piracy is profitable to the labels via the exuberrant damages.

Also interesting how after days of silence, both Reasoned Mind and neostyles suddenly post comments back to back!

90 Oct 11, 2009 at 20:43 by Trelew

Simply put, the government or law enforcement agencies won’t do a damn thing because it has the backing of Big Business. And government is in bed with Big Business. Sadly, I’m not surprised this BS is going on. What I am surprised about is that it has gotten to the point where are arrogant enough to do this publically without the usual subterfuge. It’s all about power and greed people.

91 Oct 11, 2009 at 23:09 by slcjosh

hahaha come and get me motherfuckers! these crooks wont get a dime from me…and they shouldnt get a dime from anyone.

92 Oct 12, 2009 at 11:27 by Recton Kracke

“The Yankee Group estimates that there are currently about 58.2 million P2P users worldwide, a number estimated to grow to 135.6 million by the year 2010.”

from “Strategies for Managing the P2P Phenomenon”

Some food for thought…

93 Oct 12, 2009 at 13:09 by Anonymous

@ReasonedMind & Neostyles:
Please stop PRETENDING to be normal people presenting normal views.

You are both lying, hypocritical sycophants who ignores EVERY single transgression against our liberties and freedoms by the music industry but whines and crys about a 12 year old downloading a Britney single.

Stop PRETENDING shills.

94 Oct 12, 2009 at 18:17 by Bobe-On (Agents, Control, Power)

@Oct 12, 2009 at 11:27 Recton Kracke

“The Yankee Group estimates that there are currently about 58.2 million P2P users worldwide, a number estimated to grow to 135.6 million by the year 2010.”

Just a wee bit more than the “agents” in my 73 spoof. ;)

“Strategies for Managing the P2P Phenomenon”

‘Manage’ seems like some kind of control-focused thinking; a questionable way of regarding some things; and a reason why we have some of the problems we do.

“What do all men with power want? More power.”
– The Matrix Reloaded

95 Oct 12, 2009 at 18:25 by Bobe-On

75

96 Oct 12, 2009 at 20:05 by Donnie

This is grand scale extortion

http://en.wikipedia.org/wiki/Extortion

97 Oct 12, 2009 at 20:15 by Don

@DeathStalker

#17 – I could say that the music companies are persuading me to pirate music by charging an inordinately high price for their music. I bet if you could find a law firm willing to figure out just how much a music CD is worth, you could really stick it to the man.

98 Oct 12, 2009 at 20:34 by TalonHunter

i hope all of you file-sharers realize you actualy dont own anything you are sharing(espicially games/movies) what you pay for when you buy this stuff is a liscence, not the actual work(seriously does ANYONE read EULA/ToS’s ??)

99 Oct 12, 2009 at 20:39 by TalonHunter

*I* will admit i use filesharing sites, to *RE*download a game if the disc i have gets messed up(since i currently have the liscence, this is legal[hint to any game company out there- get hooked up with Valve's STEAM{or something liek it please :)}])

100 Oct 12, 2009 at 20:59 by Tyler from USA

“However, not everyone who receives a letter will pay up, but DRS says that an impressive 25% of all recipients do without asking questions.”

Thanks to this one sentence, TorrentFreak has insured that everyone who reads this article, and millions more by hearsay and word-of-mouth, will promptly ignore these letters.

101 Oct 13, 2009 at 07:36 by izacri

entrapment and crookery

102 Oct 13, 2009 at 13:25 by UseTheLawToFightTheLaw

Common Law trumps Statute Law – this is fact. To find out how to fight back against these new copyright pirates in legal guise go to

http://www.tpuc.org

and

http://www.fmotl.com

All is revealed with no strings attached. With the information provided there, for free I might add, these skim-off FUD-based companies will fade as quickly as they sprouted.

So who are the greatest copyright thieves?

RIAA and the Big Distributors.

103 Oct 14, 2009 at 15:28 by Sylvia

I almost miss the old days when things like this are resolved with a bullet in the head… Or an axe. Now everything is paper.

104 Oct 14, 2009 at 16:36 by anon

Support the Pirate Party.
(Disclaimer: I am a member of the Australian Pirate Party).

While I support the existance of Copyright, in it’s current form it fails to:
a) protect the rights of the artist to make money from their work (They get screwed by their publishers).
b) They restrict creativity because copyright terms are far too long.
c) Overly long copyright terms are holding our culture to ransom.

Copyright terms need to be reduced, Artists need a bigger share of revenues inshrined in law, software patents need to be eliminated entirely.

till then the bulk of the population will continue to be treated like criminals, judged guilty before innocent, and western culture will continue to be stiffled of any vigor.

It is time to push back the corporate greed.

105 Oct 15, 2009 at 01:05 by Matt

Not that the torrent sites profit from advertising or anything…

106 Oct 15, 2009 at 04:21 by Ninja

I wonder where is the ‘illicit’ here… I’d just ignore the letter lol.

107 Oct 19, 2009 at 10:20 by Jon

Time to fight back and start bombing the multimedia copyright industry.

I wonder if we can recruit some brainwashed muslim suicide bombers to walk into the Sony, EMI, Virgin etc offices and for the love of Allah and music blow them up?

hihi.. just joking. but then again copying is becoming a sort of religion is it not?

108 Oct 19, 2009 at 14:29 by kaxalax

why are people so resistant to paying for music?

why do you so vigorously defend your right to steal from artists?

If you keep stealing music, many musicians will stop making it.

you will end up with music being totally free but also totally shit.

well done, fuckers!

109 Oct 19, 2009 at 17:51 by mckensie'

suck it music media

110 Oct 22, 2009 at 04:53 by GrinfilledCelt

It just sounds like spam to me. “We’ll just send out tons of mail and if anyone is stupid enough to fall for it, we make money!”

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