Then another day passed. And another. And another. This was clearly more than a DDoS but Sony were keeping very quiet – almost too quiet. Eventually Sony admitted they had been subjected to some sort of attack.

Yesterday they made another announcement, informing their user base that the whole system will be offline indefinitely. No further information from Sony but there is a man who thinks he knows what causing the extended downtime.

‘Chesh’ is a staff member from psx-scene.com, a site dedicated to hacking and modding Playstations. Together with various developers in the scene he’s been putting all the pieces together and if his theory holds, Sony has been battling their biggest crisis yet.

Chesh believes that the problem stems from the availability of a new CFW (custom firmware) for the Playstation 3. CFW’s give hardware modified functionality and REBUG, as it’s known, turns a standard PS3 into a machine which provides access to some of the PSN’s features usually reserved for developers.

REBUG, which was released on the last day of March, apparently has a trick up its sleeve in that it is able to get previously hacked Playstation 3 consoles back online after they’d been excluded by Sony. It’s not a feature built in by design, but one that users have learned how to exploit. Chesh reports that some REBUG users were initially using it to play Call of Duty on the dev networks around April 3rd. Neat enough in itself but there was a monster in the shadows.

Since REBUG allowed users to connect to a previously secure and private developer network, certain information provided by users wasn’t security checked by Sony. According to Chesh, one of the items whose authenticity was never checked was – unbelievably – credit card numbers. People could apparently make them up and get access to whatever content they wanted.

“What happened next was extreme piracy of PSN content,” Chesh explained. He said that over on PSX-Scene he learned of people downloading free Sony content from the dev networks on April 7th.

As we know, Sony shut down the entire PSN on April 20th and it remains down today. Since Sony have told their customers next to nothing about the problems it has faced – including whether or not credit card information is safe – it’s a safe bet that none of the above will be confirmed or denied.

Chesh himself admits that while the above information is true, he can’t verify 100% if it’s the absolute reason why Sony pulled the PSN offline. That said, it’s a big enough problem for them to do so and if Sony has pulled the plug for another unknown reason, their problems only go deeper. And it’s hard to imagine a situation worse than this.

Update: Sony posted an update on the shut down.

Source: Playstation Network Shut Down To End Piracy Free-For-All

Then, a little later, Lynton hit back at his critics. He pointed to the leak of an unfinished copy of Wolverine, which appeared on the Internet (from a movie studio source who has never been identified) a month before its official release. As Techdirt pointed out, none of this hurt the movie.

Despite terrible reviews and this “devastating” leak, Wolverine still did very well at the box office, taking $35 million on its first day, beating both X:Men ($20.8m) and X2: X-Men United ($31.2m).

In a guest piece in The Times today, Lynton is complaining again. “Internet piracy means less money to make movies,” warns the headline.

Lynton begins by plugging Sony’s launch tomorrow of Michael Jackson’s This Is It, noting the importance of releasing it simultaneously worldwide.

“If Sony released it only in the US on Wednesday, by late Thursday it would be camcorded, uploaded on to the internet and available free to anyone with a broadband connection,” he said.

While absolutely correct, everyone also knows that the following is also true. The quality would be absolutely dire, Jackson’s singing would be punctuated by the rattling of candy packets and accompanied by a myriad of noisy cinema-goers singing their own version of his songs, probably all in D-Minor. The video would undoubtedly bring a whole new dimension to Black or White. People download this garbage but no-one enjoys it, and for good movies sales are not affected – but I digress.

“Online theft siphons billions of dollars out of the marketplace. That means less money to make movies. Projects get scaled back and others dropped. Some potential blockbusters won’t get made. Some new writers, actors and film-makers won’t get discovered,” writes Lynton, adding;

“Last year the leading Hollywood studios made 162 films — more than 40 fewer than in 2006, and the lowest number in a decade.”

But of course, just counting the “leading” studios doesn’t give the full picture. Even the MPAA’s own stats reveal a slightly different picture;

“The total number of films released domestically in 2008 was up 1.8%, to 610 films.”

So, if one casts the net slightly wider (yes, there is a world outside Universal, Warner, Paramount, Sony and Twentieth Century Fox), things look slightly different.

2004 Total Movies Released: 567 Total Combined Gross: $9,327,315,935
2005 Total Movies Released: 594 Total Combined Gross: $8,825,324,278
2006 Total Movies Released: 808 Total Combined Gross: $9,225,689,414
2007 Total Movies Released: 1022 Total Combined Gross: $9,665,661,126
2008 Total Movies Released: 1037 Total Combined Gross: $9,705,677,862
2009 Total Movies Released: 1177 Total Combined Gross: $7,596,626,766
(2009 figures incomplete, total movies scheduled to be released, gross to date)

Admittedly less money seems to be being made per movie, but that hasn’t resulted in less being made – movie releases are set to almost double from 2004 to 2009.

But in the end, Lynton is arguing that more piracy means that less money goes into the studios’ pockets. But in an Ars Technica piece ‘What piracy crisis? MPAA touts record box office for 2007‘, the stats speak for themselves;

“..data that shows the US box office doing its biggest year of business ever in 2007, growing 5.4 percent over 2006 and bringing in $9.63 billion.”

So maybe 2008 was a disaster? Not quite. In another Ars piece ‘What piracy? Movie biz sees record box office in 2008‘, the stats also speak loud and clear;

“Domestic film box offices broke multiple records this year [2008], grossing an estimated $9.78 billion.”

Even the MPAA’s own stats reveal that the “Worldwide box office reached another all-time high in 2008 at $28.1 billion, an increase of 5.2% over 2007.”

I’m absolutely no statistician, but I simply find Lynton’s claims confusing. I can’t imagine that I’m on my own.

Source: Sony CEO Pleads Poverty But The Movie Industry is Loaded

Once one of these legitimately purchased music CDs was put into the PC drive of a Sony customer it automatically installed software on Windows computers which changed the way the operating system played files, installing a rootkit on the host PC.

Adding insult to injury it was discovered that Sony had used code created by Jon Lech Johansen (DVD Jon), violating its GPL license.

Following these frankly unforgivable actions by Sony, the company was forced to recall all affected CDs and was subjected to various lawsuits. One such legal action has just come to an end.

According to Germany’s Heise, a district court has just ruled in a case where an individual claimed that the presence of the Sony rootkit caused him financial losses.

After purchasing an Anastacia CD, the plaintiff played it in his computer but his anti-virus software set off an alert saying the disc was infected with a rootkit. He went on to test the CD on three other computers. As a result, the plaintiff ended up losing valuable data.

Claiming for his losses, the plaintiff demanded 200 euros for 20 hours wasted dealing with the virus alerts and another 100 euros for 10 hours spent restoring lost data. Since the plaintiff was self-employed, he also claimed for loss of profits and in addition claimed 800 euros which he paid to a computer expert to repair his network after the infection. Added to this was 185 euros in legal costs making a total claim of around 1,500 euros.

The judge’s assessment was that the CD sold to the plaintiff was faulty, since he should be able to expect that the CD could play on his system without interfering with it.

The court ordered the retailer of the CD to pay damages of 1,200 euros.

Source: Retailer Must Compensate Sony Anti-Piracy Rootkit Victim

Sony’s PSP Product Manager John Koller told Multiplayer recently “[There] certainly has been some piracy on the PSP. We’ve seen that as a significant issue — it’s trending down right now, we’ve seen the piracy not be as such prevalent in the last month to two months”

According to Koller, more and more PSP users are joining the “good side” and standing up for the intellectual property rights of the company. “We’ve noticed there’s kind of a ‘good vs. evil’ battle that we track on many of the forums and many of the pirated web sites,” he said. “There are certainly people that are standing up and fighting for what we consider the good side, the rights of developers and publishers to make money on their IP.”

To verify this assesment, we decided to take a look at the piracy rate of PSP games. This data, based on direct monitoring of BitTorrent trackers seems to contradict Sony’s statements. From our statistics, there seems to be an increase instead of a decrease in the past months, which is true for all content. There is a steady increase in downloads for PSP games throughout 2008, and an even steeper one over the last three months.

To give an example of the piracy rate of PSP games, Dissidia: Final Fantasy was downloaded 200,000 times via BitTorrent over the past 5 days, which is pretty significant for a PSP game. The two most pirated games for the PSP in 2008 were Final Fantasy VII and GTA Vice City Stories, with an estimated 650,000 and 550,000 downloads. As a comparison, the average PSP game sells 133,000 copies. We’re curious where Sony got their statistics, perhaps it was just a PR stunt, to give pirates a guilty conscience.

Despite the increase in pirated downloads, for other types of games, more units were sold November this year compared to the same month in 2007, adding up to an impressive $4 billion in sales.

Source: PSP Piracy is Trending Up, Despite Sony’s Claims

Thus far, these attempts haven’t been particularly successful. ISPs worldwide are refusing to cooperate, mainly because they feel such actions violate the privacy of their customers. In addition, last week the Belgian ISP Scarlet – previously ordered to stop illegal file-sharing on its network – told the court that it is simply impossible for it to do so.

Nevertheless, Sony’s John McMahon said in his keynote speech at the Broadband World Forum, that he would like ISPs and copyright owners to cooperate in order to reduce piracy. According to McMahon, the entertainment industry is losing more than two billion dollars a year because of piracy, but he believes this number can be reduced significantly with the help of ISPs.

Interestingly, McMahon also said that customer frustration with DRM is one of the main reasons why people turn to file-sharing networks, instead of legal alternatives. Sony recognizes, but at the same time ignores these signals from their customers, as they are not planning to get rid of DRM. Instead, they are investing in a new and improved DRM, the Digital Entertainment Content Ecosystem (DECE).

Source: Sony Urges ISPs to Cooperate Against Piracy

EMI offered a deadline – either the IFPI reduced the costs associated with membership by 31st March 2008 – or EMI would leave. Now, after a few months of negotiations, it seems some sort of deal has been struck enabling EMI to stay as a member.

An IFPI spokesman said the organisation had been able to a agree a “sensible, appropriate and reasonable reduction in our budget.”

It won’t be just EMI that gets reduced rates either. The other major members – Universal, Sony and Warner will all benefit, says Jean-Francois Cecillon, president of EMI International:

“We undertook to work with our colleagues in the other major labels and with (IFPI boss) John Kennedy on a cost saving plan for the IFPI. Together we have been able to find solutions which we believe are achievable whilst maintaining what the IFPI does best in representing our industry.”

Separately, the IFPI just announced it has successfully shutdown a Direct Connect hub in Chile, specializing in metal. If they feel that this type of action is the most effective way of spending EMI’s money, no surprise they wanted to leave.

Source: EMI Stays With IFPI On Condition it Pays Less to Chase Pirates

For now Grouper will keep its current management, but they will be working closely with a team at Sony Pictures. Lynton stated:

“Consumers are spending more and more time on sites like Grouper, and as one of the world’s largest creators of entertainment, we want to be where the audiences are. This acquisition demonstrates the breadth of involvement of Sony Corporation in the field of digital online entertainment. Many people in the Grouper community use Sony cameras to create videos and Sony VAIO computers and mobile devices to store and view them. It makes sense to complete the circle by having Grouper be a part of Sony Pictures Entertainment, which itself creates so much content for people around the world.”

There are no concrete plans to offer Sony Pictures on Grouper at this point (rather the opposite), but this might change in the future. At least Sony now has a foot-in-the-door at this 21st century media outlet.

press release

Source: Sony Buys Video Sharing site

He said:

“The version of Gangs Of London that you have brought our attention to here is a pre-production ‘preview’ version,” he revealed. “It is not the complete game and it has anomalies in the code since it hasn’t been through our QA process yet.”

This reaction makes you wonder.. Is this some new form of a advertising? Piracy or promotion? What’s wrong with the good old “trial/preview version”.

The full version is scheduled to appear by the end of 2006.

Source: Gangs of London Leaks on BitTorrent

Paid downloads will cost $0.99 per song. Mashboxx offers a “try before you buy” mechanism to check out songs before you decide to buy. You have the option to preview the full song 5 times, after that previewing is limited to 30 seconds.

And the DRM? If you decide to buy/download a song, you have the right to copy it to 5 other pc’s, and burned onto CD up to seven times. Copying the songs to windows media compatible portable players is unlimited.

Mashboxx

Source: MashBoxx: Authorized P2P Downloads