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.

Article from: TorrentFreak, check out our new blog at FreakBits.

After its transformation into a pirate tracking outfit Nexicon launched its Getamnesty program which offers copyright holders a chance to turn piracy into profit. They cleverly circumvent privacy protection laws by using ISPs to forward settlement requests for various copyright holders to alleged infringers. One of their most successful partner programs is the Payartists website which is a misleading name to say the least.

The money collected through Payartists is not going to any artists at all. The only artist they collect ’settlements’ for on the site is Frank Zappa, and he passed away in 1993. All the settlement money collected now goes to The Zappa Family Trust which is headed by Zappa’s widow.

Most recently a new Nexicon franchise emerged, as the ‘Video Protection Alliance’ (VPA) has teamed up with several porn studios to track down and force settlements from alleged copyright infringers. The methods they use are very similar to Getamnesty and Payartists and are designed to get cash payments from illicit file-sharers without even having to first find out who they are.

The process is simple. Their software monitors BitTorrent swarms and other filesharing networks and records the IP-addresses of those people who share the work of their clients. It then automatically sends an email to the ISP linked to the IP-address with a request to forward it to the associated customer.

Thus far, this is very similar to the warning letters that the movie and music studios have been sending out for years. However, there is one big difference. The emails sent out by Nexicon to alleged infringers contain veiled threats of legal action if they don’t choose to settle within 10 days.

In their email they write that “it may be beneficial to settle this matter without the need of costly and time-consuming litigation.”

If you don’t settle they are “prepared to pursue every available remedy including damages, recovery of attorney’s fees, costs and any and all other claims that may be available to it in a lawsuit filed against you.” To make it even more scary, they point out that ISPs might cut your Internet connection if you don’t comply.

In the FAQ on the VPA website it is noted that consulting a lawyers is an option, but it would be a rather silly thing to do since it will cost more than the settlement itself. “It is likely that the cost incurred to retain a lawyer will exceed the settlement amount offered.”

Indeed, the settlements are rather cheap compared to the fine that was handed out to Jammie Thomas recently. The settlement offer for an adult movie is close to the retail price of a DVD and for a single Frank Zappa track you’ll pay $10. In comparison, Jammie Thomas was ordered to pay $80,000 per song.

However, because of these low fees and the use of threatening language we cannot help mentioning the word ‘extortion’ once more. Even if they handle with the best intentions they should adjust their tracking software to be more accurate. We confirmed at least one case where they sent a settlement offer to the wrong person, and we’re pretty sure that this is not the only mistake they’ve made (here’s another one).

Still, even people wrongfully accused of sharing [insert obscene porn title here] may be inclined to pay a few bucks rather than risk being taken to court. The threats are worrying enough for some people to pay for an offense they didn’t commit. But there might be an even easier way out.

Unsurprisingly, very little happens when the threats are ignored. A Manhattan College employee dealing with DMCA notices wrote recently. “We have not passed the settlement info on to the students linked with the allegedly infringing IP address and have not had any follow up notices from them.”

This aside, we are not aware of any legal action taken by any of Nexicon’s partners to back up their threats. To the best of our knowledge they don’t even have a proper license to act as private investigators which is a felony in several US states and renders the ‘evidence’ they have in their spreadsheets useless.

Our advice, if you get a settlement offer from one of Nexicon’s partners please forward it to your spam folder – after forwarding it to us first of course.

Article from: TorrentFreak, check out our new blog at FreakBits.

One business model in operation for some time now is the selling of otherwise free software to unsuspecting entrants to file-sharing and P2P. Unaware that everything they need can be legitimately acquired for free, they hand over payments for access to public sites such as Mininova or The Pirate Bay. Equally, they end up paying for uTorrent or other P2P clients via credit card or other methods.

Recently there has been an increase in sites offering these type of services, but utilizing premium rate SMS to collect revenue. One such site being complained about right now is Bittorrent-net.info. The site offers downloads of most of the popular P2P clients including uTorrent, Vuze/Azureus, LimeWire, eMule and Ares.

However, the downloads have a sting in the tail. Once downloaded and the installer is run, the software package requires the user to SMS a provided number via cellphone to get codes to ‘activate’ the software. The site has sections for users around the world, but for UK users this sequence of events ends up costing individuals around £9 in call charges. Spot the deliberately obscure gray-on-gray prices in the screenshot below, written in letters instead of numbers so they don’t attract the eye.

On closer inspection of the rarely viewed ‘Legal Terms‘ section of the site which is buried away in the usual legalese, it does indeed say that that the ’service’ will cost £9. Unfortunately for the site this just isn’t enough to give it legality under regulations just introduced in the UK.

Under new rules from premium-rate phone regulator PhonepayPlus, hiding away charges as BitTorrent-net.info has done is strictly disallowed. In effect now is this rule:

Clearer pricing – No matter where you see a mobile phone-paid service advertised (whether it’s in a magazine or newspaper, on TV, on the internet or somewhere else), the pricing of the service must be given just as much space and attention as the rest of the advert – the cost shouldn’t be hidden in small print. Also, providers must not say a service or download is ‘free’ unless there really are no other costs involved.

The number that people have to SMS to obtain ‘activation codes’ is 78881, which is currently operated by mBlox Ltd. Touting itself as “The world’s largest mobile transaction network” and the company behind delivering the ‘Crazy Frog’ ringtone, mBlox does not provide the content or schemes behind such SMS’s, merely the infrastructure.

In a response to rising complaints as outlined in this article, mBlox provides an online tool to find the companies behind these numbers. Unfortunately our searches using this method drew a blank, but two company names kept cropping up linked to these operations – Netlink Network Corp. and Panama-based Soletto Group SA.

TorrentFreak’s calls for comment from mBlox have so far gone unanswered but we did managed to discuss the situation with SMS regulator PhonepayPlus, who gave us this statement:

Following intervention from PhonepayPlus, as a result of public complaints and its own internal monitoring, this service has been suspended from operation. Readers [in the UK] affected by this service should contact PhonepayPlus on 0800 500 212 (Mon-Fri, 8am-6pm), or at www.phonepayplus.org.uk

We are unable to confirm at this stage if people affected will be able to get a refund, but it certainly looks like the chances of people getting scammed by this method in the future are diminishing.

On other sites using the same business model the software BitComet, BitSpirit, Frostwire and Kceasy feature, but unfortunately this scheme doesn’t stop at P2P clients. Messenger Plus! Live, WinAce, WinZip, 7Zip, DirectX, CDex, and Adobe Acrobat have all appeared with similar installers.

Article from: TorrentFreak, check out our new blog at FreakBits.

In addition, the company ran banner campaigns on several websites that were never paid for – TorrentFreak included. Myka’s Dan Lovy contacted us last year to ask if we were interested in promoting Myka through a banner campaign. After several emails back and forth we agreed on a good rate, and put the banner up in the sidebar. The campaign ran for over a month, but we had no choice but to remove it when Dan went silent.

We never received any money for the banner campaign, and we were not the only site Myka scammed into advertising their ‘product’ for free. From then on all emails remained unanswered, until May 2008 when Dan emailed us to say that they had received a round of funding, and that he would pay up soon. That was the last time we heard from him.

Around the same time, a discussion on DigitalSpy got quite heated when someone seemed keen to promote the device and was confronted by users who were concerned at the lack of a real company name, amateur website, no real-world address and no contact details other than an email address. Indeed, even the Myka.tv domain details are protected. Not exactly confidence inspiring.

Then the whole project seemed to die. Customers who had ordered the device never heard from the company again, and the website was never updated. Only a month ago NewTeeVee reported that they were still promising to ship the pre-orders in the Summer of 2008, while through neglect the Myka forums were taken over by spammers.

Six months later after being informed of the mess on their forums, someone claiming to be Dan Lovy posted on CrunchGear yesterday, saying “I’m Dan Lovy, chief cook and bottle washer at Myka. Just spent a lovely evening cleaning out the forum. YES, the factory is springing to life.”

But what inspired this reappearance by Mr Lovy? In an unforeseen turn of events, Myka has announced it is ready to ship their set-top box in the coming weeks. The news was picked up by Engadget and the previously-mentioned Crunchgear, with Dan Lovy himself encouraging people to order a box, saying “Have you ordered your MYKA today?”

No thanks. When building a business and embracing partners and customers alike, you have to build trust. Our advice; don’t buy on their promises, they break them. Time and again.

Update: Only a few minutes after we published this article Dan Lovy contacted us to say [insert all possible excuses here].

So, he is alive, and we have no doubt that he’s a real person. We did find out that he never got the funding he told us about a while back. Last week he wrote this at the Small Business Ideas Forum: “Most recently I launched www.myka.tv We generated hundreds of news articles and orders (alas, in this economic climate we have been unable to raise the money needed).”

Article from: TorrentFreak, check out our new blog at FreakBits.

A ’scam’ file-sharing site can operate in numerous ways, but in the end the aims tend to be the same. They either try to offload malware or, more commonly, try to part the site visitor from his cash by getting him to sign up to access the site with his credit card. Usually, users pay a relatively small amount in the first instance, say $5-$10 per month. However, it’s not unusual for additional charges to start appearing on the victim’s card at a later date. Canceling the agreement with the scammers can be a nightmare.

In return for the money paid, the user usually gains access to a basic meta-search site, which simply searches and offers results from completely free sites such as Mininova or The Pirate Bay. Millions of unsuspecting people are signing up for these scam sites (often advertised by ‘legitimate’ BitTorrent sites), and have done for some years now.

One of the most famous scam sites is FullReleases.com, which has been in operation for a few years now and has generated a fortune for its owners and a whole lot of misery for its ‘customers’. Today, those victims have reason to celebrate since the owners of the site have had their identities revealed and, related or not, most of the sites they operated are parked and not longer operational.

M. Dylewski and J. Dylewski are reportedly the sons of Polish immigrants who settled in Surrey, BC, Canada. After their successes running a pair of warez sites, in 2005 they created FullReleases.com and set about making their millions with false claims and misleading operations which targeted naive entrants to the file-sharing phenomenon. The site went on to become one of the world’s most famous scam sites, parting untold people from their cash and prompting thousands of complaints.

However, rumor has that the brothers didn’t stop with one site, and started to build an empire. Dozens more appeared, with some deliberately named to trade on the successes of established genuine sites, with domains such as adultreactor, bitdig, releases.ws and rapidsharereactor.

Right now, many of these sites have been taken down, including FullReleases.com, and although this in itself won’t get refunds for those that have been scammed already, it will certainly give them a boost. It is not 100% sure why all the scam sites are suddenly parked or offline, but it is likely that the brothers are enjoying an early retirement.

So how can people avoid getting sucked in by these scammers and others like them? It’s amazingly simple – NEVER pay to download torrents since they are always available for free, and for God’s sake, Google!

Article from: TorrentFreak, check out our new blog at FreakBits.

Although most scams can be avoided easily when a few simple rules are followed, they still manage to trick thousands of novices every day – and this is not going to end anytime soon. Since BitTorrent has become more or less mainstream, with millions of users worldwide, it also proves an interesting target for email spammers.

The latest scam, unlike the others we have reported on before, is one that is sent by email. The email is disguised as a message from the anti-piracy company MediaDefender (using their logo etc.), and warns the recipient that his or her download behavior has been logged. The email has a report attached with more details about the infringed material, which turns out to be a virus (A Mytob worm which installs a trojan, and allows outsiders to gain access to your computer).

Dear User!

Your recent internet activity was logged on the following sites:

* Btjunkie
* SumoTorrent
* isoHunt
* Btscene
* Mininova
* Fenopy
* Monova
* Yotoshi
* GetInvites
* Btmon

We have attached a report about the copyrighted movies, music, softwares you
downloaded or searched on these webpages. We strongly advise you to stop any
future activities regarding the downloading of illegal content or you can
expect prosecution by 17 U.S.C. §§ 512, 1201?1205, 1301?1332; 28 U.S.C. §
4001 laws.

Sincerely,

MediaDefender Inc.

To the more experienced and BitTorrent savvy users it is clear that the email is a scam. First of all, MediaDefender has never been involved in anti-piracy enforcement. The only thing they do is spoofing, flood BitTorrent sites with fake files, and the occasional DDoS attack on Revision3.

In addition, the email claims to have data on what the user searched for on the sites, which is irrelevant and practically impossible. It seems that the spammers should have done some more research on the topic. A good spammer would have included The Pirate Bay in the list of sites instead of Getinvites, which is a BitTorrent invite trading site, and not a search engine

A related scam email, sent out by the same group of people judging by the style and format, is also targeted at filesharers and threatens to suspend their Internet connection. The email claims to be sent by the Internet service provider consortium, and again includes an infected attachment with a report.

The email is a clever scam that shows how mainstream BitTorrent has become. The emails are sent out randomly, but many recipients, scared by be cut off by their ISP, or sued for downloading copyrighted material, might open the infected attachment without realizing that it is a scam.

Article from: TorrentFreak, check out our new blog at FreakBits.

Today, sadly, we have to report on a new ring of BitTorrent scam sites. This particular brand notifies people who try to play a video file they’ve just downloaded that they need to download a codec if they want to play the file. The site they are redirected to is of course a scam, most of them are filled with annoying ads.

Thousands of downloaders have already fallen for this scam, and new reports keep coming in. The downloaded files are simply huge uncompressed videos, named after a popular release. This is what the message looks like: “Warning: HD Codec not detected. Please get the correct codec from [insert site here].”

The following sites have been related to these scams, but there are probably a few more.

http://www.torrentm8.com/
http://www.rapid-torrent.com/
http://www.torrent-movie-host.com/
http://www.thepiilotbay.org/
http://torrentrnate.com/
http://moviehost.rapid-torrent.com/
http://www.everybodyshappytorrents.com/
http://hdmi2.com
http://codec.uploadvid.net

Although we dispute the claim that your PC will be filled with spyware and viruses when you use BitTorrent, there are some basic steps people should know in order to avoid running into them. Below are two examples, for a detailed overview and more tips and tricks, check our tutorial on how to avoid fake torrents and other scams.

1. Read Comments

This is a simple but effective way to find out if the .torrent is legit or not. It only takes a few seconds but it’s time well spent. Very often there are requests from previous downloaders for a password to access the file or some might be asking where to download a special video player to view it.

2. Verify the Source

A good way to find out if a .torrent is real or not is to find out who uploaded the file. There are several well known users that always release torrents on a regular basis, EZTV is a good example.

Happy torrenting..

Article from: TorrentFreak, check out our new blog at FreakBits.

“As of December 20th, “Shareaza.com” is mirroring “Shareazaweb.com” – A known scam site. While we are working to resolve the matter, any help to contain this would be appreciated.”

The site looks convincing enough, labelled as it is “The Official Home of Shareaza” with the new operators of the site having seen fit to steal some of the original Shareaza artwork (originally created by ‘RocketX and Kid’) to complete the look. So who has taken over the domain?

According to Skinvista, a developer from the ‘real’ Shareaza, the situation is as follows:

“At this time the Shareaza.com destination is now controlled by iMesh/MusicLab LLC, an unauthorized Madison Avenue (New York) based company, with servers in Israel. MusicLab LLC previously acquired iMesh.com and Bearshare/Bearflix.com following lawsuits. It now appears the known scamsite Shareazaweb.com was a placeholder for the planned takeover of Shareaza, relating to another ongoing lawsuit.

It is urgent that people understand the software on these iMesh/MusicLab sites is suspicious, misrepresented, and illegal -breaking GPL and DMCA among other laws.”

As if this strange case needed any more twists in the plot, consider this. On October 26th 2007, the main Shareaza site went down due to unknown “personal matters”.

TorrentFreak asked ‘Wildcard’ a ‘real’ Shareaza developer what happened to the site. He explained: “That’s one of the mysteries. The main hosting server went offline, it had the Shareaza site, wiki and forums on it. The only information that made it this far, was that it was down due to personal problems with the owner of the server machines. what those personal problems were, medical or legal, we don’t know.”

Luckily the Sourceforge site was restored from an earlier backup.

However, the hijacked Shareaza.com domain now points to a server where it is hosted along with some other questionable sites, including bandoo.com, bearflix.com, bearshare.com, daemonsearch.com, imesh.com, imesh.net and musiclab-llc.com.

Apparently, there are lawyers involved now but the loose-knit Shareaza team are advising that it may be prudent to move forward on the basis that the domain won’t be recovered. A source close to this case has told TorrentFreak that Jonathan Nilson, the owner of the Shareaza.com domain has been contacted and he has confirmed that he has sold the domain to the scammers. It looks like the domain is lost forever, a big impact following the loss of the main site in October.

‘Wildcard’ explained that the software on offer from the hijacked site although labeled “ShareazaV4.exe”, is not Shareaza at all but likely a clone of the new malware infested iMesh/Bearshare client and should not be downloaded under any circumstances. Once installed, the software wants to install a search bar and make contact with a central server. Unlike Shareaza – which is abslutely free and has a reputation for being non-profit and shunning involvement with money – the hijackers are touting a subscription based product.

Indeed, the operators of iMesh even tried to trick people into thinking that the reputable GRC site endorsed the iMesh client – an assertion which is completely untrue.

Anyone wishing to find the real Shareaza client should head over to the project’s SourceForge page.

Developing story

Update: A contact of Jonathan Nilson is reporting that Nilson can neither confirm nor deny that he sold the domain to the scammers.

Article from: TorrentFreak, check out our new blog at FreakBits.

Last week we discovered that Media Defender actively tried to lure people into downloading blockbuster movies from their fake download site, Miivi.com. As expected, only a few hours after we made the news public the site was taken offline.

Media Defender later told Ars Technica that Miivi was an internal project to test out an online video project, but we know better. We’re convinced that they will try this, or a similar trick again in the near future.

Media Defender is hired by companies like the MPAA, BSA and RIAA to track down people who try to download copyrighted content. They record IP-addresses from BitTorrent trackers and other P2P networks. But they also utilize more proactive methods such as uploading fake .torrent files and setting up fake video download sites.

Luckily most BitTorrent site admins are aware of their shady practices and remove these fake files from their sites before they can do any harm. Pirate Bay admin Brokep offered his help to other BitTorrent admins to help them identifying and removing these fake files, he told TorrentFreak:

“Since the Miivi-incident we can’t keep quiet about them anymore. We want their employers to stop using them so they go bankrupt”

To our friends at Media Defender from all of us here at TorrentFreak… We’re watching you…

Update: Media Defender decided to redirect P2P.net to this article, thanks guys.

Whois Info P2P.net

Article from: TorrentFreak, check out our new blog at FreakBits.

Some time after we started mininova there were a few people that thought that uploading spam torrents would be a good idea to advertise their “GET A FREE XBOX 360″ links (or PSP, or HDTV, or well you get the point ;)).

At this time we banned 3651 people (some of which are people who received multiple bans). To see if some country has more (persistant) spammers than others, I decided to compare some statistics.

If you take a look at the stats you’ll see that Germany has some hard-core spammers.

Article from: TorrentFreak, check out our new blog at FreakBits.