
The case against Kim Dotcom, finally revealed - shawndumas
http://arstechnica.com/tech-policy/2013/12/us-unveils-the-case-against-kim-dotcom-revealing-e-mails-and-financial-data/
======
JunkDNA
What's interesting to me about all of this is that there's this caricature of
movie pirates as not wanting to pay for anything and just being general
freeloaders. Yet this makes it clear that people _were_ willing to pay for
this stuff. The entertainment industry has just never really been able to get
their heads around how to best develop a new, sustainable business model when
it's so easy to replicate content.

~~~
dangrossman
> The entertainment industry has just never really been able to get their
> heads around how to best develop a new, sustainable business model

The entertainment industry seems to be doing better than ever. Did piracy
actually reverse growth at any point in their history?

Today you can buy new-release movies from your PC, smartphone, tablet, set-top
box or smart TV and either download or stream them instantly. You can buy
combo-packs in store that come with both physical discs you own and a digital
download license. The download-only rights for new releases cost substantially
less than discs; charging the same was a common complaint of pirates on
messages boards for years (e.g. today you can buy Elysium on Amazon at $3.99
to rent, $12.99 for digital purchase, $19.99 for DVD or $27.99 for
BR+Download). The digital versions are available as soon as, or even earlier
than, the disc versions. Tens of thousands of movies that few would want to
purchase are available on a dozen streaming services for less dollars a month
than buying a single movie outright.

Almost every objection to legal purchases made by pirates over the years has
been answered; the studios gave us what we asked for. Their content is
available at reasonable prices virtually wherever and whenever you want it, at
least within their own countries (international licensing is still a mess).
BitTorrent's share of US internet traffic went from 33% in 2006 to 21% in 2011
to less than 7% in 2013. I don't think that's coincidental.

~~~
superuser2
A large amount of content is available, but it's mostly the second string.
Movies I actually _want_ to watch are unavailable on Netflix and Amazon
because the studios won't license them for streaming.

Earlier analysis of this phenomenon on HN explained it by saying that once
something is on Netflix, all hopes of making money on DVD sales are gone.
Hollywood wants to sell physical media because that is what it knows how to do
and has always done.

Therefore, movies will only be released to Netflix, Amazon, etc. if the studio
is particularly forward-leaning or (more likely) evidence suggests that it's
made all the money it's going to make in physical media distribution so
there's no harm in offering it up for streaming.

If I recall correctly, Netflix's catalog improved substantially for a good
while, but then large portions of it were retracted. That's another thing that
has to stop before legitimate digital distribution is "good enough" \- studios
need to stop pulling movies every time they feel like it. It pretty clearly
demonstrates an attitude that digital distribution channels are toys to be put
away at any time rather than a core component of their business.

~~~
cylinder
Do you remember how new releases were $5 at Blockbuster? In the 1990s? I don't
see why you expect unlimited new releases to now stream to you for $8/month.
If you want to stream a new movie, you have to pay for it. The physical DVD
wasn't the expensive part of the $5, it was the content.

~~~
CamperBob2
_If you want to stream a new movie, you have to pay for it._

How exactly do I do that?

~~~
res0nat0r
By paying more for it than all you can eat for $8/month on Netflix. Want a
brand new movie that just came out on DVD via streaming tonight? Pony up and
pay $15 to buy it digitally, or $8 to rent it via on demand etc.

IE: Brand new content is more expensive and always will be.

~~~
alextingle
He didn't say _why_ , he said _how_. Do you know somewhere I can pay $15 to
download or stream new release movies?

~~~
res0nat0r
[http://xfinitytv.comcast.net/ondemand](http://xfinitytv.comcast.net/ondemand)

[http://www.dish.com/entertainment/vod/](http://www.dish.com/entertainment/vod/)

[http://www.directv.com/technology/on_demand](http://www.directv.com/technology/on_demand)

[http://www.amazon.com/s?rh=n%3A2858905011%2Cp_drm_rights%3AR...](http://www.amazon.com/s?rh=n%3A2858905011%2Cp_drm_rights%3ARental)

[http://support.xbox.com/en-US/xbox-360/xbox-video/buying-
and...](http://support.xbox.com/en-US/xbox-360/xbox-video/buying-and-renting-
videos)

[http://us.playstation.com/playstation-
store/moviestv/](http://us.playstation.com/playstation-store/moviestv/)

[http://www.apple.com/itunes/charts/movies/](http://www.apple.com/itunes/charts/movies/)

~~~
lostsock
I just looked at a random new release DVD - "We're The Millers" \- in iTunes
in Australia (the only one of the above options that seems available to us
downunder) and the buy price (HD movie) of $29.99 is more expensive than the
physical disc from a local retailer:
[http://www.jbhifionline.com.au/dvd/newreleasedvd.htm](http://www.jbhifionline.com.au/dvd/newreleasedvd.htm)
($24.98)

$6.99 rent price is substantially cheaper if you only want to watch it once
though I guess.

Not sure if GP meant "new release movie" as in still in cinemas as opposed to
"new release DVD"

------
digitalengineer
I don't get it. If the evidence is so overwhelming (emails, chat logs, skype
logs) why in the world didn't the US use all this to take them down? Why the
drama? The breaking of international rules and the violence?

~~~
shadowmint
This is a PR move, it has nothing to do with a trial.

This is a better coverage: [http://www.hollywoodreporter.com/thr-esq/justice-
department-...](http://www.hollywoodreporter.com/thr-esq/justice-department-
releases-evidence-kim-667204) (and shame on your ars, for not bothering to
link to or quote the source material for your article)

That's what has happened. Someone ordered this material released to try to
counter the massive pressure the NZ government is under locally not to do
comply with US requests for extradition.

    
    
        "This sounds like 191 pages of a meritless criminal theory,” Rothken said.
        "The notion that they keep piling on more evidence to bolster civil claims of 
        secondary copyright infringement, to us look like they’re desperately trying 
        to mislead the public.”
    

Exactly.

I'm not arguing that he (.com) was (and almost certainly still is) a Bad Guy
who deliberately built his business on selling other peoples work, but this...
is just PR posturing to try to counter the thus-far terribly terribly botched
efforts of the justice department.

~~~
belluchan
If he is a bad guy it feels weird rooting for a bad guy. I feel like my
perceptions about this entire thing are all backwards. If DotKom so bad why
are they so bad at making him look bad. DotKom comes out looking like the
martyr he wants to be seen as. Law enforcement look like they're private
security for the entertainment industry. And yet it's clear this guy is
possibly the worst kind of copyright infringer. He's not the individual who
downloaded a song and is being sued for life and limb, this guy got
unbelievable wealth of the work of others and still the whole thing feels
wrong. Maybe we should be cheering law enforcement to bring this guy to
justice but I can't help but root for the other side. The thing to blame is
probably the decade of going after individuals and making them suffer has
turned out to be such a huge public relations disaster that will last a
generation. I just want the entertainment industry to fail and for copyright
laws to fail as well.

~~~
josephlord
There can be more than one bad guy. Bad guys can also be mistreated. The world
is not a movie with clearly delineated goodies and baddies.

------
salient
Was Megaupload registered in US, too? Otherwise I think they have a very bogus
case of "jurisdiction".

Just having the data pass through US servers doesn't or shouldn't count, the
way the Internet works, and how it's supposed to decentralize the data to keep
it more localized. Otherwise you could argue that just by the nature of people
using Megaupload from US would also give the US government the right to
prosecute Megaupload. If that's the case, then Google could be prosecuted in
countries where it doesn't have headquarters, too.

~~~
rayiner
Megaupload was not just being used from the U.S., but it had servers in
Virginia, was actively targeting U.S. customers, and dealt largely in the
infringement of U.S. copyrights.

~~~
salient
Again, unless it was registered as a company in US, then I don't see the
problem.

~~~
rayiner
If a foreign citizen commits a crime in the U.S., does the U.S. not have the
ability to prosecute him just because he's not a U.S. citizen (= "registered
as a company in the U.S.")?

~~~
dragonwriter
> If a foreign citizen commits a crime in the U.S., does the U.S. not have the
> ability to prosecute him just because he's not a U.S. citizen

If a foreign citizen commits a crime in a foreign country, the US can still
prosecute him (and can even have him forcibly abducted outside of the existing
extradition treaty of his country, violating the laws of that country, to
bring him to court without reducing its ability to prosecute him.)

~~~
Refefer
To that effect, many countries can prosecute a foreign citizen committing a
crime in a foreign country. For example, genocide.

------
belorn
Please, oh please, let me get a copy of one of the larger movie publishers
email server. How easy it would be to find a few incriminating sounding
emails. I could take things out of context, and say "look, conspiracy to
commit crime right there!". Or a police stations email server. Or _any larger
organization what so ever_.

I don't need six written lines from the most honest man. Just a few hundred
thousands emails. Maybe ten millions to be sure. Surely, no content provider
has anything wrong doing hinted in theirs?

So for a short promotion, I would recommend anyone who runs a email server to
have disk encryption _ON_. It doesn't matter if you are running a puppy
hospital for orphans.

------
tptacek
It doesn't sound like this stuff has "finally been revealed", since the
highlights Ars points out were in the indictment, which has been public for
most of the year.

------
biggy31
Just shows how flawed the laws are with respect to copyright holders. I doubt
he is the only one setting up international businesses, to skirt the law for
profit, and then claim the US doesn't have jurisdiction.

The laws in Europe are very loose as well. Not only do you have people setting
up businesses to profit off piracy, but you also have secondary businesses
forming to monetize and indirectly profit.

Browse over to thePiratebay and go look at the ads, what the products are, and
who is serving those ads. These players know exactly what's going on, and how
that traffic is derived and they will do anything for a "buck" \- from install
toolbars and hijack browsing experiences down. But technically, its all
"legal", specifically if you aren't in the US.

That shouldn't be the case imo and the book should get thrown at all these
people, because when the copyright laws change eventually and people say the
new ones stifle innovation, these are the guys that will be the reason for it,
and rightfully so.

~~~
scotty79
What's flawed is the whole concept of copyright holder.

~~~
biggy31
It's possible to build a business 100% built on piracy internationally, and
still be "technically" legal or have no real recourse.

You can DMCA them, but they are given a "reasonable" time to take it down, and
per the article, they never even removed the actual content, but created
duplicate URLs over and over again.

You can build a wall of plausible deniability, even though you know what you
are doing the whole way, and potentially even get away with it.

~~~
Dylan16807
>You can DMCA them, but they are given a "reasonable" time to take it down,
and per the article, they never even removed the actual content, but created
duplicate URLs over and over again.

The article is failing to mention the actual reasoning behind that. The
'duplicate URLs' were people taking a file and making their own completely
independent upload-instance, with an assertion that they had permission under
copyright regardless of the first uploader.

So megaupload argued, reasonably I think, that just because X file by Alice
was a violation, that doesn't mean X file by Bob is a violation, so they only
deleted Alice's copy.

~~~
biggy31
Indeed, but when don't limit how much people can upload, but then you limit
how many DMCA take downs you will comply with, it is physically impossible to
keep up. They've created a one -way street basically, however, they can then
go and argue in front of a judge "we've implemented a 'reasonable' DMCA take
down policy." \- the word "reasonable" is very much up for interpretation, so
Mega will argue they are complying with the law, but in reality, they are
opening the floodgates to piracy, and they basically know exactly what they
are doing.

Really, the bottom line is this: People know what his sites were used for.
They didn't blow up to immense popularity because of the non-pirated material.
He hides behind DMCA, he says his service is for legitimate purposes only and
the illegitimate is just a side effect. There are legitimate services that are
big, like 'YouSendIt', and those services aren't known for piracy the way his
services were. It's not random, unlucky, undeserved, etc.

He's a criminal, operating internationally, trying to exploit loopholes in the
law for his own financial gain. He is not a good guy, he is not noble. He is a
risk-taker who tried exploiting loopholes between the law and technology. For
every action there is a reaction.

His action was to use unfairness in the law to exploit it for his own
financial gain. What the big companies did was use their unfair advantage with
politics to pull some strings and do things that are arguably legal or
illegal? What is the one takeaway? The laws are unfair. What Kim Dotcom did
should not be legal, and there should be effective tools to have him comply or
actually give a shit about the piracy on his websites, without "stifling
innovation" around the rest of the internet for actual legitimate services
that aren't built on piracy.

~~~
Dylan16807
From what I understand they didn't limit DMCA compliance, which would be an
obvious violation. They limited the use of a custom takedown tool.

> People know what his sites were used for.

Yeah, but how do you decide responsibility? Outside of a minority of incidents
he's only providing infrastructure. Trying to enforce legality there is a can
of worms. How many steps away do you go? What about his ISP? Surely they
noticed the huge amount of traffic, and have some idea what the site is for.
What about the people that sold him servers? They're contributing even more
than the ISP to the ability of the site to run.

>His action was to use unfairness in the law to exploit it for his own
financial gain. What the big companies did was use their unfair advantage with
politics to pull some strings and do things that are arguably legal or
illegal?

In my mind, unaccountable political manipulation is worse than exploiting a
loophole in a law. It's much easier to fix a law.

------
aaronbrethorst
I cannot believe the folks at MegaUpload were so dumb as to commit this sort
of stuff to an email. Here's some advice: _if you 're doing something illegal,
don't write about it._

As Stringer Bell so astutely put it on _The Wire_ : "[Are] you taking notes on
a criminal fucking conspiracy?"

------
siliconc0w
Due to intellectual property bullshit, we'll never see legal avenues of
consuming IP keep up with the ability to disseminate data/information. We have
the ability to create the biggest and most far reaching library man has even
envisioned. A digital Alexandria that would be both the greatest and cheapest
wonder the world has seen. And yet it will never exist and we will squabble
amoungst ourselves to ensure the right middlemen get paid and fruitlessly try
to enforce an artificial reality where information is a private good instead
of a public ocean where all may splash in child-like wonder if only it were
allowed.

And one day we will be asked to answer for this barbarism. How could we allow
so many of us to go without when they could have it all for free? How could we
deny all to billions just to create an artificial marketplace for a few
million? How could we possibly stand at beginnings of a profound shared global
consciousness with all the tools and technology required to summit the
mountain and breath in the glorious horizon and choose to instead stubbornly
burrow our heads in the sand. History will ask us these questions and we will
be found wanting.

~~~
rajacombinator
Don't worry. People in the future will be doing stupid crap too.

------
bradleysmith
PDF of evidence here:

[http://www.nbr.co.nz/sites/default/files/images/Mega%20Evide...](http://www.nbr.co.nz/sites/default/files/images/Mega%20Evidence.pdf)

------
lostlogin
From the local rag a few days ago.
[http://m.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=...](http://m.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11176431)

------
6d0debc071
The main thing that keeps occurring to me is 'This is why you burn the
evidence _before_ you get arrested.' ^^;

