MediaDefender Stock Plunges Due to Leaked Emails
Written by Ernesto on December 22, 2007It has been a rough year for MediaDefender and their parent company ArtistDirect. This September nearly 700mb of MediaDefender’s emails leaked to the public. Initially it didn’t seem to affect the stock price much, but after the financial consequences became apparent, their net worth plunged.
With still a few days to go it is probably safe to say that MediaDefender is one of the biggest losers of 2007. The leaked emails, published by the notorious “MediaDefender-Defenders“, gave away a lot of sensitive information and details about how MediaDefender sabotaged BitTorrent trackers and other file-sharing networks. Despite the fact that their decoy and spoofing operations were hugely ineffective on most BitTorrent sites, the company collected millions of dollars from the entertainment industry for protecting their content.
Unfortunately for them, one of their employees was stupid enough to forward all his work email to his Gmail account, without using a proper password. To make it even worse, more sensitive information started to leak as the email leak was soon followed by a p2p tracking database, a phone call and a collection of anti-piracy tools they used for their daily operations.
Soon after this sensitive information became public, the Pirate Bay launched a counterattack. They decided to use the information from the emails to file charges against some of MediaDefenders customers including Paramount Home Entertainment, Twentieth Century Fox and Universal Music Group for corrupting and sabotaging their BitTorrent tracker.
The leak did not have any effect on the stock price initially, but after the company announced that it had cost them $825,000, it started to drop hard. It turned out that MediaDefender’s parent company ArtistDirect spent $600,000 to compensate their customers and the rest of the money was used to cover legal expenses. The investors weren’t too happy about this news as can be seen from the picture below.
So what will happen now, will the company walk the plank to bankruptcy? Many people think it will, but MediaDefender still sees a future in the anti-piracy business. Sure, they were devastated by the leaks, but remarkably, they believe that it didn’t hurt the goodwill of the company. Makes you wonder what is needed to hurt this then, because it can’t get any worse if you ask me.
I’m sure we will hear from them again in 2008.
Previously: Japanese File-Sharing Population Explodes
Next: Piracy, Morals and The Need for Change
87 Responses (Add yours or TrackBack)
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SHORT the shit out of the Mediadefender stock and get rich while p2p wins! It’s a win-win :D
MD is heading to bankruptcy sooner or later anyways ;)
ahahahahahahahahahahaha
just awesoome
hahahaha
BURN! BURN! BURN!
wow, I can’t believe these comments. You can’t blame media defender for trying to prevent people from stealing. Yes I said stealing, not sharing. Sure there are legit uses for bittorrent (linux distros come to mind), but most of you are thieves. If you’re not, then you wouldnt worry about MD. I can’t believe you’re rejoicing over this news. It’s disgraceful. This is not justice.
BAHAHAHAHHAHAH!! OH PRECIOUS! Randy Saaf? What have you done with our money or your employees privacy?
> wow, I can’t believe these comments. You can’t blame media defender for
> trying to prevent people from stealing.
Read this then repost: http://en.wikipedia.org/wiki/Hollywood_accounting
@jd - Go spam another site you anti-p2p stooge.
“Oh, its soooo sad that the people are getting back a little control over their media. They should continue to pay top dollar for the crap that is shoved down their throats because they are all drones.”
I still go to movies, I still buy music and I still buy software. The difference is now that I can choose wisely and not get duped by these companies who have more money than god.
Good! LOL.
I was just wondering, doesn’t the MPAA lose out to stuff available at blockbuster? I spend $6 to rent a movie and watch it, and lets say each dvd there is watched at least 75 times, now doesn’t the MPAA lose alot from that while Blockbuster rolls in the cash?
The most devastating aspect of the internal leaks demonstrated that MediaDefender was screwing over their customers. They lied and deceived their clients into believing that MD was highly effective, while at the same time MD employees privately admitted among themselves that their efforts were all but useless against the most popular torrent sites like The Pirate Bay, Mininova and Torrentspy - sites which employed administrators to actively seek out and removed fake content as well as block their IP addresses.
The leaked emails showed that Mediadefender went to great lengths to keep their customers from learning the truth. To add insult to injury, MD openly mocked their client’s naivety behind their backs. “take a moment to laugh to yourselves”, one of their emails snickered.
MediaDefender’s clients were certainly stupid to rely on MD to provide the testing parameters to them that would allow their clients to “independently” judge MD’s effectiveness. These should have been immediately recognized as sham tests from the start. For instance, MD insisted that their clients use MD’s own list of fake Edonkey servers for their tests - which naturally would show zero copyrighted files being available on the network - instead of the real edonkey serverlists that most edonkey users were using.
It seems obvious that the $600 thousand in credits MD doled out was needed to keep their clients from walking out the door en mass after learning they’d been cheated. (obviously, P2P’ers, torrent site admins and copyright pirates were not the only ones reading MD’s leaked emails!)
The business that Mediadefender operates is virtually 100% based on trust. These clients have really no way of knowing how effective MD has been at preventing copyright infringement in the internet universe - other than what MD tells them. MediaDefender had always hyped itself as the premier expert at defeating internet piracy, but the mail leaks burst this bubble, exposing them as a modern-day version of the Keystone Cops.
MediaDefender’s utter incompetence might be forgiven, but once the truth slipped out that MD had built their business on feeding their clients a pack of lies — it’s all over. MediaDefender will never be trusted again.
Why did my last comment not get posted and instead say “Your response is awaiting moderation” ?
this reminds me of the titanic except they hit the iceberg head on full throttle so now they’re royally fucked. doesn’t Christmas bring out the best in us all turns out their best was damn ugly
Just wondering - Do I need to break up long posts into several small parts so they can be posted without having to wait for approval?
(feel free to delete post after being answered)
[quote]Yes I said stealing, not sharing.[/quote]
Sorry, but you’re mistaken - we are not stealing by sharing data on the internet. Theft implies that I have taken something from them, which I’m sure you will agree is physically impossible as I’ve never been to hollywood to take anything from any movie studio.
[quote comment="245725"][quote]Yes I said stealing, not sharing.[/quote]
Sorry, but you’re mistaken - we are not stealing by sharing data on the internet. Theft implies that I have taken something from them, which I’m sure you will agree is physically impossible as I’ve never been to hollywood to take anything from any movie studio.[/quote]
As much as I would love to agree with you, different rules are applied to what is known as intellectual property.
That graph is quite deceiving. The Y-axis is oddly distorted and starts quite high in numbers.
And a happy new-year!
It couldn’t have happened to a nicer buncha guys…
BWAHAHAHAHAHAetc…
Merry Christmas, MediaDefender Assholes. Let’s hope you’re all laid off by the New Year…
(Ain’t schadenfreude grand…?)
[quote comment="245765"]That graph is quite deceiving. The Y-axis is oddly distorted and starts quite high in numbers.[/quote]
That’s the way stock graphs are represented. Imagine the size a graph would have to be if a stock went through the roof. Therefore, they’re artificially ’squashed’ through the vertical plane.
HTH
what nobody has mentioned on here yet is while the MD stocks are sooo low we ALL should buy them take a controlling share of the company and close the fcukers down or use MD to change the law
oh and btw nave its not deceiving at all basically every time they take a small trophy the stock price almost hits $2.50 once they take a hit they are down 2 basically nothing
and it is SHARING not stealing stealing means that everyone who ever downloaded it would have gone to see it at the movies most of the people who download it will go and see it at the movies anyway but want to see if its worth there money and dont start about IP laws they are diff state 2 state and country 2 country and usually it doesnt stand up in court anyway
@jd
Die.
@MD
Die.
@uNoWho
If we buy stocks, not only will they get money, but their stock price will go up and they will actually look good. Besides, unless you buy a significant portion of the company, you’re gonna have as much a say as a janitor in congress.
They will end up bankrupting, after the leak every company with any common sense knows that they can’t trust MD with shit. They’re probably selling their stocks, just like Enron CEO’s, before they declare bankruptcy.
And as far as the stealing-sharing conflict, jd, any software worth playing is worth buying. Same with movies, series, music, etc. Not the best place to flame people who use bittorrent, considering the domain and all.
Tis the season to be jolly….unless you’re in Randy Saaf’s house where it’s the night before xmas and not even a mouse was heard….cept the creaking of the rope from where the cunt hung himself….
100 Media Defender employees at the bottom of the ocean = A GOOD START.
#47, I agree. As far as media defender goes, I have only one question. You like that hard cock inside you mother fuckers?
@ 31 Billion Dollar Turkey,
I’d not heard of Hollywood Accounting before. Thanks for the info. Seems everyone’s screwing everyone else in the entertainment industry. My heart bleeds…NOT.
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