Online Piracy: A Solution for Providers

Thomas Hein
In recent years, the advent of bit-torrent has changed the playing field in regards to online piracy of large media files such as movies, adult videos, and electronic games. The entertainment media industry faces an issue that requires an immediate solution that is both reliable and financially-reasonable.

The music industry faced similar issues almost a decade ago with the widespread use of P2P networks, causing drastic changes to the revenue model of music studios and even the artists themselves. Until the late 90's, record studios earned up to 90 percent of their revenue from retail sales of albums and singles. At that time, bands and artists toured the world primarily to boost CD sales. Over the past decade, however, that model has changed drastically. Studios now stay afloat from revenue generated through sales of concert tickets and licensed merchandise, due in large part to the rampant piracy of their content by consumers around the world.

Providers of other types of media, including games and adult videos, are unable to adopt a similar revenue model and must therefore battle online piracy head-on.

Bit-torrent servers provide a range of content options that no individual publisher can possibly offer. This content is provided at no-cost to consumers and allows recipients to remain almost completely anonymous. Piracy is illegal regardless of content classification, but an even more concerning use of bit-torrent is for the sharing of media that is illegal due to the nature of its' content (e.g. child pornography). And while law-enforcement does their part to identify and prosecute purveyors of illegal content, their resource limitations prevent a solution for legal medial distributed over illegal channels.

"At DigiProtect, we fully support the efforts of law-enforcement agencies in identification and prosecution of individuals distributing illegal content. We work with many of these agencies pro-bono to provide information used to apprehend and prosecute the criminals behind child pornography networks, etc.," General Manager of DigiProtect mbH, Andreas Walter, said. "We also believe that the infrastructure used to arrest child pornographers can and should be utilized to enforce copyrights, even when the content itself is not criminal in nature."

Throughout all developed countries around the world, governments have created an environment in which media publishers are left on their own to enforce their copyrights. The causes of this implicit policy, repeated by many of the world's governments, are lack of resources and apathy, and often hide behind a stated concern for personal privacy that exists only when it's convenient.

Government policy creates a number of natural barriers that make it difficult for smaller media companies to efficiently enforce their copyrights. This limitation is true even for market leaders like Vivid, Wicked Pictures and Hustler, for whom it is not economically feasible to take on this task internally. The substantial legal cost associated with a multi national enforcement and prosecution program are simply more than most companies can bear.

All things considered and no change in policy forthcoming it is up to publishers to find their own solution. Many publishers have taken on the task to fight online piracy by investing a fair amount of time and money on the issue. I have been a member of various Anti Piracy Panels organized by different industry groups. The goal is common but the strategy still varies greatly.

One workable solution for mainstream content provider is the approach that Digiprotect has taken. The company monitors all common p2p networks for its client's recordings and instigates civil litigation against perpetrators uploading or downloading this content. The company offers this service in countries where their actions are both legally and financially feasible, such as Germany and the U.K. It might sound surreal but the service is completely free of charge for the rights holder. Digiprotect finances the operation and generates its income as a percentage of the amounts recovered from violators. Thus, the company can not only finance itself, but also be profitable because of the amount of lawsuits instigated on its customer's behalf. Court costs, legal costs, administration costs etc. are all spread over a substantial customer base.

The company meanwhile cooperates with several Anti Piracy Organizations worldwide in order to get its system approved in those countries where piracy is an imminent threat to traditional content distribution; with the main focus being on Japan and the U.S.A, which besides Germany are the most important markets for digital media.

Time will tell if a for-profit organization will be able to successfully battle piracy on a global scale, but the approach generates some income to compensate for financial losses Digiprotect's customers have suffered due to file sharing; and will deter some potential thieves from stealing content online.

Litigation might not seem to be a nice way of doing business, but dramatic circumstances sometimes require drastic action.