This problem has motivated people to start anti-piracy companies such as Rightscorp, a company that uses standard DMCA takedown requests to send settlement offers to alleged copyright infringers.
Rightscorp had big plans and went public last year on the NASDAQ exchange, aiming to help the biggest entertainment companies turn piracy into profit. Thus far, however, the results have been rather disappointing.
Despite teaming up with prominent names such as Warner Bros. and BMG, the company hasn’t been able to turn a profit.
In their latest SEC filing published earlier today the company reports a total loss of $2.2 million for the current year. This brings the total loss since its founding in 2011 to more than $6.5 million.
“The Company had a cumulative net loss from inception to September 30, 2014 of $6,540,194. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern,” the SEC filing reads.
For Rightscorp to remain in business it desperately needs extra investment. The current revenue stream of $250,000 per quarter from piracy settlements doesn’t come close to covering operating costs.
In a word of caution to investors, Rightscorp warns that without extra funding the company may have to cease its operations.
“If the Company is unable to obtain adequate capital it could be forced to cease operations. Accordingly, these factors raise substantial doubt as to the Company’s ability to continue as a going concern,” the filing reads.
Investors appear to have foreseen Rightcorp’s troubles as the companies stock price continues to nosedive, straight to the bottom. This week it reached a new low of 13 cents per share.
One of Rightscorp’s problems is that they can only reach a fraction of U.S. Internet subscribers. Most large ISPs, including Comcast, have thus far refused to forward their settlement demands.
Several smaller providers are not eager to forward the “settlement” DMCA notices either. In an attempt to force them to do so the company recently obtained several DMCA subpoenas against local ISPs, but these are also being protested.
Whether Rightscorp will be able to survive these setbacks has yet to be seen. One thing’s for sure though, profiting from piracy is not as easy as they had hoped.