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Page last updated at 11:30 GMT, Monday, 24 August 2009 12:30 UK

Pirates look forward to business

By Marc Cieslak
Reporter, BBC Click

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Gary Fung, Isohunt's founder, hopes indexing sites can work with content owners

Following several high-profile court cases, more and more previously illegal file-sharing services are trying to reinvent themselves as legitimate businesses.

However, it is not just the threat of legal action that has caused the change of heart, say some industry watchers.

"They have realised they can make money out of it," said Eddy Leviten of the UK's Federation Against Copyright Theft (Fact).

"They have advertising on their sites and, as those sites attract more eyeballs, they are getting more advertising income."

Popular sites include Isohunt, Mininova and The Pirate Bay. These indexing sites act as search engines for "torrents" files - links to TV, film and music files held on its users' computers.

Peer-to-peer (p2p) software connects users to one another and shares files through means such as so-called bit torrent, which chops up files into manageable bits.

No copyright content is hosted on the websites themselves - they simply do the indexing of the available content.

'Criminal actions'

However, the p2p scene has recently featured in several court rooms.

For example. in 2008 TorrentSpy was told to pay $111m (£67m) in damages for copyright infringement, one of the largest fines ever handed down for copyright theft.

Eddy Leviten, from Fact, on going after the people profiting from stolen content

And recently a Swedish court sentenced four men behind the Pirate Bay site to a year in prison and ordered them to pay 30m Swedish kronor (£2.6m) in damages to entertainment companies such as Columbia Pictures, Warner Brothers, EMI and Sony Music Entertainment.

Following the verdict, the site was purchased for 60m kronor (£5m) by Swedish software firm Global Gaming Factory.

The gaming company is planning to create a legal business model and to pay copyright fees for movies, music and games linked to via the site.

"I think there is a realisation amongst some of these services that they have to go legal and they have to develop ways of working with content owners," said Mr Leviten.

"They are scared that they are going to be targeted by law enforcement, and that's not just Fact, that's law enforcement across the globe as well," he added.

'Free fight'

Another torrent site currently under legal pressure is Isohunt. It was set up by Gary Fung while he was at university and it has become one the most popular indexing sites online.

CD being placed in computer, Eyewire
Popular p2p sites are now starting to change due to the threat of legal action

Organisations such as the Motion Picture Association of America (MPAA) are pressuring it to remove copyright content such as blockbuster movies.

Mr Fung said he has tried to work with copyright owners since the start of the site.

"Anything copyright infringing that they see for distribution online, they ask us and we will take it down, and that is pursuant to copyright laws in the United States.

"The legal challenge is certainly gigantic - we are up against both the MPAA and Hollywood in the States," he admitted.

However, he believes that the law favours copyright owners disproportionately and this makes internet users apathetic.

Isohunt is developing a project called Hexagon which aims to blend bit torrent with social networking and to rationalise the content being shared.

"We are hoping with Hexagon that we can bring in copyright owners in the sense YouTube is doing, in adding advertisements to videos for example, so content owners can use the system to advertise directly off what is being shared," Mr Fung explained.

He believes people file-share because it is a convenient way to access content.

"The question of how do you fight free is by offering something more compelling, more convenient, higher quality and more legal - I think people would embrace it or open up if they do that," said Mr Fung.

YOUR COMMENTS

I think if iTunes were able to offer their films for £1.99 a film, around £0.99 for a TV episode, and £0.29 for a song - so many more people would be encouraged to use the iTunes Store because of its quality, quantity and price. As well as knowing they are not breaking the law.

People think they will make less money by reducing the price, but in reality a lower price will attract more customers, and could even make more money overall.
Dean Calliafas

Until the recording industry and Hollywood completely embrace the idea of online, instant access, and cheap content - people will always find ways of getting what they want for less.

If the fat-cats at the top stopped taking so much money out of the industry and lowered the price of items, people would be more inclined to buy original copies.

I for one don't want to go out and spend a lot of money for something which could turn out to be bad. In the end it all comes down to greed.
Matt Silvester, Birmingham

I think that instead of suing the indexing sites or taking down the file sharing software, multi-millionaire companies should invest money on developing some kind of technology to protect their content more efficiently.

Perhaps they should develop some kind of tracking code that could be used to find out from where a particular file originated instead of investing money on lawsuits.
Ash, Devon

Typically imaginary numbers for a copyright-protection group - industry loses £500m, pirates gain £200m - this is nonsense, there are far more people downloading for personal use than for profit.

The majority of people who download or buy films from pirates do so because they are unwilling or unable to pay the excessive prices charged by the industry, and don't believe their entertainment options should be restricted by how much money they earn.

They are ordinary people suffering in a recession and a country where everything costs too much. Stop branding them as malevolent thieves and criminals.
RF, UK

The fact is that the current model of copyright just does not account for the digital age. It's now possible to take just about any content and copy / transfer it an infinite number of times, with no loss to the original (and no cost other than bandwidth).

Once a film or song is 'out in the wild' (i.e. the public have access to it), that's it. Game over. There's an army of amateur software developers ready and waiting to crack any attempts at DRM.

Short of shutting down the entire internet (which itself is the most efficient content distribution network ever created), you can't stop people sharing files any more than you can stop them e-mailing each other.
Michael Stannard, Retford

Why is everyone so fond of calculating the losses of the cinema industry now? These sites and p2p technology has been there for over 10 years now and nobody cared.

Suddenly this is causing every one so many losses that we are witnessing charges against owner of web servers that do nothing more then adding ads to their web sites.

Yes partially I agree that to some extent this is illegal, but why stop the web servers? Stop the people who enter the cinema with a camcorder.
Mo, Varna, Bulgaria

It has taken the media giants too long to realise that online piracy can only be overcome by providing a better, more reliable service at a small cost. People have always been willing to pay for entertainment - as long as it's high quality! That will never change.
Sebastian Matcham, Bermuda

P2p used to be the best way of finding new music, particularly of underground styles. The music industry has been very slow to capitalise on this new technology. But has also has historically marginalised these styles because they have not been profitable releasing them on to formats such as CD and vinyl.

Now that there is a more cost effective delivery platform for these less prevalent styles - websites like Juno and Beatport are beginning to establish themselves, but they are going to have to wean all of those who have been file sharing free music for many years.
CJ, Sheffield

I would like to see more streaming content or p2p files freely available without the worry that you will be prosecuted for it. A bit of advertising is tolerable and would not put me off watching my favourite shows like Top Gear and others I can't get to see here in Germany.

It is certainly time that somebody got some sort of format sorted out where people can watch whatever they want without persecution and the copyright owners also get their share of the ad profits.
B Grant, Freiburg, Germany

Piracy has been around since before file sharing or indeed the internet was around so I believe online piracy will never become 100% legitimate. It will always be a game of cat and mouse.

As for going forward, the entertainment industry as a whole needs to reduce what it charges to really impact online piracy. When you see stars earning millions during a recession, more and more common people will turn to piracy rather then spend £10-£20 on watching their movie or buying their CD etc.

But I doubt the fat cats would agree to that.
Jason King, London

The problem of piracy will exist until content becomes free. It boils down to the simple issue of why pay for something when you can get it free? Other factors such as ease are merely positive externalities.

For the industry to move forward, content providers must find a way to make their products either free or very cheap and take profit elsewhere.
Alex L, Swindon



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SEE ALSO
US file-sharer refuses donations
03 Aug 09 |  Technology
Pirate Bay site sold to game firm
30 Jun 09 |  Technology
Seven million 'use illegal files'
28 May 09 |  Technology
Call to 'disconnect file-sharers'
12 May 09 |  Technology
TorrentSpy ordered to pay $110m
08 May 08 |  Technology

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