Mega Aftermath: Upheaval In Pirate Warez Land

While last week's shutdown of MegaUpload is of huge interest in itself, but a wave of aftershocks and side-effects are proving equally fascinating to watch. In addition to causing all sorts of problems for legitimate users of file-sharing services, there is no avoiding the fact that certain elements of the piracy scene are in a mess. But amazingly, still the beat goes on.

Despite its “rogue site” status and various other warnings, when MegaUpload went down last week it still came as a shock.

But what came next was unprecedented, a dramatic reaction in cyberlocker land that took out vast libraries of digital content and capacity. The perception of the established ground rules had been changed, without the passing of a single new law.

FBI, arrests by huge numbers of police, enormous cash and asset seizures overseas, reward program scrutiny, knowledge of payouts to persistent uploaders of infringing content. Extradition. These are things that changed the game.

“If the US government can come for Kim Dotcom it can happen to almost anyone,” a file-hosting operator told TorrentFreak on condition of anonymity. “I’m trying to think of everything I did possibly wrong in the last 3 years and worrying about that and the next 3 years also, if we even have that long.”

For many hosting sites it was time to react – quickly.

Earlier this week we documented the drastic actions taken by services such as Filesonic and Fileserve who shut down all 3rd party sharing and, like many others, closed down their affiliate payout programs. Later we showed how file-hosting competitors such as 4shared, Rapidshare and Hotfile had grown as users hunted for spare capacity.

In the space of a week and the MegaUpload shutdown aside, huge libraries of both legitimate and pirated material were wiped out as filehost after filehost deleted an impossible-to-calculate number of files and closed down thousands of suspected infringing accounts.

And this is where it gets quite interesting.

For more than half a decade Hollywood and the recording industry have spent millions of dollars not so much on actually eliminating illegal content, but getting rid of links to content such as those found on BitTorrent.

But this week, without a single cease and desist being sent, cyberlockers across the globe not only self-deleted vast quantities of files, but in doing so made millions of links across thousands of ‘linking sites’ completely useless too.

For the operators of these linking sites and their uploaders, this week has been very hard work indeed. For some sites it was all too much and the shutters have simply come down.

The problem, it seems, is money. While there is money to be made in torrent sites, the content sharers there are largely altruistic. The cyberlocker scene is more complex and incestuous, with revenue being generated in a handful of basic ways on both legal and illegal content.

Through reward programs, uploaders get paid on the number of times people subsequently download content. Equally, ‘release’ sites can upload the content themselves and get paid like a regular uploader when people download. Reward programs are important for cyberlockers too since they attract customers away from competitors and also give them an incentive to supply content.

Release sites and warez forums send users to cyberlockers to get content and when they get there they are faced with a choice. Download a little, relatively slowly but for free, or pay for a premium account and get lots as quickly as possible. In many cases choosing the first option means that cyberlockers also make more money from advertising.

When various sites shut their rewards programs this week, those uploading purely for the money were hit hard. In fact, many who had cash mounting up in their accounts lost it all – some cyberlockers simply kept the accrued money. While the ‘victims’ were livid, those who hate financially motivated ‘sharing’ commented that justice had been served.

But while it’s clear that some uploaders, often young and in less well-off countries, are ‘sharing’ small time for a few bucks, for some the reward payouts are more important. For many release sites, those rewards pay the server bills.

“We needed the payout and when [filehost name redacted on request] shut down sharing we were all but finished,” one admin of a release site told TorrentFreak. “90% of our content was hosted there. Then they deleted all our files and closed the account. They won’t even speak with us about it. A whole year’s work gone. We shut at the end of the month.”

But like worker ants whose nest has just been smashed apart by angry humans, others are utterly unfazed and just want to know which hosts are still paying out. Despite the climate of fear, quite a few hosts say they are and it’s evident from the links being posted on release blogs that the upload-for-cash crew have noticed them quickly.

Things, however, are still in a state of flux. Some of the filehosts still paying out appear to be offering tiered reward systems with just about every country in the world getting a reasonable deal but with the United States right at the very bottom.

Another interesting rumor, which at the time of writing we have been unable to confirm, is that one of the filehosts who banned 3rd party downloads earlier this week is now re-enabling them. This is something to look out for. Without 3rd party links being operational users are extremely unlikely to sign up for a premium account and this is where the cyberlockers can make good money.

So finally, one has to ask whether the MegaUpload shutdown has damaged the Internet piracy infrastructure. Providing an answer is not easy.

The amount of material coming online has not really reduced – content feeding from ‘The Scene’ is business as usual. Torrent sites are watching on closely, but the public ones tend not to host content, their users do. Cyberlockers are in a mess, but already recovering. Release sites are continuing, albeit with a reduced number of multiple links to the same content.

Perhaps the best test is whether it’s now very hard or impossible to find and download popular content. Not even close.

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