Over two years since notorious cyberlocker Megaupload was shut down on January 19, 2012, Hollywood today has gone on the legal offensive. Disney, 20th Century Fox Film, Paramount Pictures, Universal, Columbia Pictures and Warner Bros. today filed a mega-lawsuit against the site and its principals in federal court in Virginia (read it here). Alleging that the site infringed upon “thousands of plaintiffs’ copyrighted works,” the studios and the MPAA are seeking million in damages from the profits Megaupload made off their copyrighted material or “the maximum statutory damages, in the amount of $150,000 per infringement,” as the 21-page complaint says. All of which means potential billions and billions.
“Infringing content on Megaupload.com and its affiliates was available in at least 20 languages, targeting a broad global audience. According to the government’s indictment, the site reported more than $175 million in criminal proceeds and cost U.S. copyright owners more than half a billion dollars,” said the MPAA’s SEVP and Global General Counsel Steven Fabrizio today. “Megaupload — and sites like it that are built on stolen works — damage the consumer experience online and undermine the creators who don’t get compensated for their work,” he added. This case starts up as the Department of Justice case against Megaupload and its New Zealand-based founder Kim DotCom, who is among the defendants here, languishes in the courts. Since … Read More »
Researchers from the Munich School of Management and the Copenhagen Business School have published a paper examining the effects on box office revenues of the shutdown of Megaupload. The notorious cyberlocker was closed on January 19, 2012 and the result, the study concludes, is that the move may have actually dented the theatrical performance of some films. The research team used weekly data from 10,272 movies in 50 countries over the period 2007-2013 and found that the box office for a majority of movies didn’t increase, while the effect on a mid-range of pics was negative. Only blockbuster titles benefited from the absence of Megaupload, among them: Harry Potter And The Half-Blood Prince, Ice Age: Dawn Of The Dinosaurs, The Avengers, and The Hobbit: An Unexpected Journey, in countries like Australia, Denmark, Italy, Israel, the Netherlands and the United Arab Emirates. The researchers argue that “smaller films” were impacted negatively because of “social network effects” whereby online piracy “acts as a mechanism to spread information about a good from consumers with low willingness to pay to consumers with high willingness to pay.” Word-of-mouth promotion, in other words, decreases when pirates aren’t there to share buzz. Without naming them, the researchers suggest these smaller films were affected negatively because they usually have limited marketing campaigns making word-of-mouth “a more important success driver.” Read More »
Notorious cyberlocker Megaupload was shuttered on January 19, 2012 and a pair of U.S. researchers says that in the 18 weeks following, there was a 6-10% increase in digital movie revenues across 12 countries. Using data from two anonymous Hollywood majors, the academics put together a just-released study titled: Gone In 60 Seconds: The Impact Of The Megaupload Shutdown On Movie Sales. The findings are based on online rentals and purchases in the U.S., the UK, Australia, New Zealand, Belgium, France, Germany, Spain, Mexico, Austria, Ireland and Canada. The researchers notably found that in those territories where pre-shutdown usage was higher – like Spain – there were larger increases in digital sales and rentals post-shutdown. They estimate that across the two studios, 18 weeks and 12 countries, weekly rental units increased by 13,700 to 24,000 due to the Megaupload shutdown and that weekly digital sales units jumped 10,500 to 15,300. “We conclude that shutting down Megaupload and [sister site] Megavideo caused some customers to shift from cyberlocker-based piracy to purchasing or renting through legal digital channels,” said Wellesley assistant professor of economics Brett Danaher and Carnegie Mellon professor of information technology and marketing Michael D. Smith, who conducted the study. Smith is also co-director of the Initiative for Digital Entertainment Analytics at Carnegie Mellon which was created late last year through an unrestricted gift from the MPAA. However, Smith tells me that no MPAA money was … Read More »
Jackie Chan Ridiculed In Hong Kong For Pro-China Stance
Hong Kong action icon Jackie Chan faces a backlash in his hometown for joining China’s top political advisory body. Hong Kong remains suspicious of the mainland and many believe Chan was selected to appear at the Chinese People’s Political Consultative Conference because of his visibility. Professor Sonny Ho, co-director at the Centre for Greater China Studies, describes the conference’s “united front” strategy as a campaign to promote a strong and peaceful homeland, unified with Taiwan. China’s growing clout has seen actors from Hong Kong and Macau drafted into patriotic movies that glorify the country’s past including the early Communist Party era. Chan’s appointment to the conference met derision online for his pro-Beijing stances such as calling for limits on the right to protest. Read More »
A New Zealand judge has ruled that search warrants used to seize evidence in the Megaupload case were illegally broad and vague. Megaupload founder Kim Dotcom still faces a battle to avoid extradition to the U.S. but the search warrant ruling likely weakened the case, legal experts told Reuters today. The invalidated warrants included those that permitted the search of Dotcom’s home and the seizure of computer hard drives. The court also ruled the FBI’s copying of evidence and sending it to the U.S. was unlawful. The case is the FBI’s highest profile action against global copyright theft. Regarding the extradition of Dotcom, an authority on New Zealand law said there may still be enough evidence to convince a court to allow extradition. Dotcom was one of four men arrested during a dramatic January raid on his estate outside Auckland. Prosecutors allege Dotcom is the ringleader of a global piracy ring that has illegally copied and distribed music, movies and other copyrighted content. Dotcom’s lawyers say Megaupload only provided online storage.
The federal criminal copyright case against Megaupload founder Kim DotCom in the United States may never go to trial because although DotCom has been served with court papers, his file-sharing company hasn’t, according to a New Zealand newspaper’s coverage of the case in the U.S. Federal judge Liam O’Grady said he didn’t know if “we are ever going to have a trial in this matter” after he was informed Megaupload had not been served with criminal papers. Dotcom’s U.S.-based attorneyIra Rothken said “We don’t believe Megaupload can be served in a criminal matter because it is not located within the jurisdiction of the United States.” Prosecutor Jay Prabhu told the Virginia court hearing that might not matter because Dotcom owned 68% of the company. Instead of a corporation that might show up for a trial, Prabu suggested it was a case “seven people who actually don’t want to show up.” Dotcom faces a court hearing for extradition to the United States after a warrant was issued for him and six others on criminal copyright charges relating to music and movies on its computer servers. O’Grady raised the possible lack of a trial during arguments over FBI applications to wipe Megaupload’s vast database of members’ files. O’Grady said those motions to erase the data on 1100 computer servers seized from Megaupload could be “premature” and requested more information on why Megaupload … Read More »
New Zealand authorities may be forced to return millions of dollars in personal property of MegaUpload founder Kim DotCom that was seized in connection with his January arrest because of a procedural error in court documents, according to the New Zealand Herald. Luxury cars, cash and other property were seized under a specific type of court order which should never have been granted, a judge ruled late last week, declaring the order “null and void” and having “no legal effect.” Police arrested DotCom on January 19 at his mansion outside Auckland at the request of the United States government. U.S officials allege he is the mastermind of a criminal enterprise designed to facilitate massive theft of movies, TV shows and music. Police and government officials acknowledge making the embarrassing “procedural error” in documents filed to authorize seizure of DotCom’s assets. Unless his attorneys can prove authorities acted in bad faith, however, Dotcom isn’t necessarily guaranteed to get his property back. Seizure of those assets have crippled DotCom’s financial ability to fight the charges and his extradition to the U.S., but he was released on bail about a month after his arrest.
Related: MPAA Cheers Federal Assault on MegaUpload
CEO Chris Dodd calls the site — shuttered today by the Justice Department — “the largest and most active criminally operated website targeting creative content in the world.” Here’s the MPAA statement:
WASHINGTON — The U.S. Justice Department and the Federal Bureau of Investigation (FBI) today announced one of the largest criminal copyright cases in U.S. history. Seven individuals responsible for operating Megaupload.com and their associated companies, Megaupload Limited and Vestor Limited, have been charged in the United States with engaging in a racketeering conspiracy, conspiring to commit copyright infringement, conspiring to commit money laundering and two substantive counts of criminal copyright infringement. The following is a comment from Chris Dodd, Chairman and CEO of the Motion Picture Association of America, Inc.(MPAA):
“By all estimates, Megaupload.com is the largest and most active criminally operated website targeting creative content in the world. This criminal case, more than two years in development, shows that law enforcement can take strong action to protect American intellectual property stolen through sites housed in the United States. Similar tools are needed to go after foreign-based websites that threaten the livelihoods of the 2.2 million hardworking Americans whose jobs depend on the motion picture and television industry, and the millions of others who produce creative content in this country.
We applaud the U.S. Justice Department, the FBI and the National Intellectual Property Rights Coordination Center and the U.S. Immigration and Customs Enforcement’s Agency at the Department of Homeland
… Read More »
The Obama administration may not like the Hollywood-supported anti-piracy bills pending in Congress — but it showed today that it’s prepared to crack down on the pirates themselves. The Justice Department calls its attack on Megaupload — said to be the world’s largest file-sharing site — “among the largest criminal copyright cases ever brought by the United States.” Megaupload allegedly made $175M in criminal proceeds and cost content owners, including music and movie companies, $500M in lost revenue. Officials say that seven people and two corporations were involved in “racketeering conspiracy, conspiring to commit copyright infringement, conspiring to commit money laundering and two substantive counts of criminal copyright infringement.” New Zealand officials today arrested four Megaupload execs: founder Kim Dotcom (also known as Kim Schmitz and Kim Tim Jim Vestor), marketing chief Finn Batato, CTO Mathias Ortmann, and programmer Bram van der Kolk.
It will be interesting to see the ripple effect: Hong Kong-based Megaupload had been endorsed by celebrities including Kim Kardashian, Alicia Keys and Kanye West. The ad-supported site served as a locker for files considered too big to be emailed; the MPAA says that most of the content there was pirated. But prior to today Megaupload denied the charge: “The fact is that the vast majority of Mega’s Internet traffic is legitimate, and we are here to stay,” it said in a statement that had been posted on the site. “If the content industry would like to take advantage of our popularity, we are happy to enter into a dialogue. We have some good ideas. Please get in touch.” Here’s the Justice Department’s release: Read More »