MPAA attempts Hotfile takedown: Online file-sharing is dead

MPAA attempts Hotfile takedown: Online file-sharing is dead

Summary: Forget earthquakes or floods and fire. Hackers and server intrusions are more of a threat. But the law itself poses the greatest headache for file-sharing services like Hotfile.

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File-sharing site Hotfile faces being shut down without a lengthy trial or investigation into its alleged illegal practices or business conduct, after a leading U.S. rights group seeks to obtain a summary judgement.

The Motion Picture Association of America (MPAA) argues in a court filing, unsealed this week, that Hotfile is a "haven" for repeat copyright infringers, and should be shut down.

"Defendants even admit that they formed Hotfile 'to compete with' Megaupload", the filing says on page 10. "More than 90 percent of the files downloaded from Hotfile are copyright infringing, and nearly every Hotfile user is engaged in copyright infringement," the MPAA claims.

The papers name 20th Century Fox, Columbia Pictures, Disney, Universal Studios, and Warner Bros. as the plaintiffs.

But Hotfile, and others, make their money from premium memberships and affiliate programs. It's a core piece to their business model. Those with premium accounts have any download speed limits lifted, and affiliate accounts can generate vast sums of money. It beats advertising, hands down.

The MPAA argues that the system encourages users to upload and share copyrighted material and promote the links to link-sharing sites. Users earn more money depending on how many times a file has been downloaded. With a popular film or television series, this could generate hundreds of dollars in hours.

Whether or not Hotfile is in the wrong, the business model of file-sharing is at threat. It worked well until the Megaupload takedown.

Hotfile has since changed its policy, and "affiliate payments will no longer be based on download volume or referrals from websites," in a bid to climb out of the legal hole it has found itself in.

The seizure of Megaupload domains, servers, and assets by U.S. and New Zealand authorities forced a massive shift in online sharing culture, as other file-sharing sites reacted by either restricting service or limiting speeds.

Many of the companies behind these sites were quick to wipe their servers of any infringing content to stave off the inevitable swoop of law enforcement that many still expect.

The problem with cases like these is that --- as seen with TV Shack, which offered only links to infringing content, and was argued that it was "no different to Google" --- these services will always be abused by those who upload content illegally. Every service has its troublemakers. Does it mean the service should suffer? From a utilitarianism approach, users can always be kicked off the service for the greater good of the service or the community. But it rarely happens, because it generates these companies money.

Google takes down content based on Digital Millennium Copyright Act (DMCA) requests, as do other file-sharing sites. It's not only required by law to comply, but it is in their favour to do so.

Hotfile says it removes copyright infringing files upon request. It has a similar backend scanning system to determine whether a file is infringing copyright, like Google-owned YouTube, which has a system in place to prevent copyright material from the viewing public.

"Hotfile uses fingerprinting technology to block the uploading of files identified as infringing on copyright holders’ rights. Hotfile has recently upgraded its fingerprint technology to vCloud9, the latest, state-of-the-art fingerprint technology provided by Vobile," the company said in a news post.

These companies know the risks, but can do little about the online piracy problem. It's a far safer way to download content over HTTP than through the BitTorrent network, but as more people turn to file-sharing sites, the more of a target these sites become.

Because torrent sharing is peer-to-peer, it involves individual file-sharers rather than a conduit company. Individuals can be targeted easier than companies, and there's less fallout. There may be case law precedent, but it doesn't involve mass swathes of files being deleted or destroyed by the authorities.

Cloud services will continue to be plagued by similar copyright-related suits. It will not be long before rights-holders will muster up enough small fry sites like FileServe, Hotfile and Megaupload, to take on the behemoths of Google and Microsoft.

If the case against Hotfile goes through and the site is shutdown by way of a summary judgement --- which is likely, let's not fool ourselves --- then the file-sharing business will suffer a blow it probably will not recover from.

The cloud, in which file-sharing sites are a part of, should not be concerned with flood or fire, earthquakes or other natural disasters. While hacking and server breaches are a significant worry, the largest threat to the file-sharing industry is the law itself.

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Topic: Browser

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32 comments
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  • What about R E T R O S H A R E

    nt
    Dietrich T. Schmitz *Your
  • Yup

    Give it a go. R e t r o S h a r e available for Win, Mac, Linux, BSD.
    Tim Patterson
  • another mafia take down

    Go to Hell MPAA
    RIAAsucks
    • So you find it acceptable for individuals

      to profit from other people's stolen work?
      Unless that stolen material is yours. Then I imagine you would "sing a different tune".
      :|
      Tim Cook
      • Stolen?

        The only ones who are stealing are the media industry with their Hollywood Accounting and such crap. Copying is not theft *by definition*.
        Natanael_L
  • Zack. Cat got your tongue?

    You made a huge claim. What about R E T R O S H A R E ?
    Dietrich T. Schmitz *Your
  • It will never be dead

    Technologies already exist that make websites unnecessary for piracy. This is really a war that cannot be won by the RIAA/MPAA. Right now file sharing is happening completely anonymously over encrypted networks with no servers involved. Good luck shutting it down.
    Necrolin
    • It Could Be

      It's easy to shut this down. We went through the peer-to-peer networking issues and the losers were a bunch of teenagers who did a LOT of sharing. When the RIAA shows up at YOUR door, good luck with that, too!
      hforman@...
  • I cannot wait...

    For all of the big label copyright groups to finally go bankrupt. I only hope that it happens soon enough that I can tell my kids about it in a historical context, rather than as a warning
    Saber3005
    • That will never happen. Creators have an interest

      in protecting their works from theft.

      As long as there are people around stealing content from others for their own finacial gains, then these groups will continue to exist.

      What I fail to understand is why people feel that other's property is free for the taking, do do with as they please.
      :|
      Tim Cook
      • Stealing

        Yes, like how the media companies love their Hollywood accounting and recoupment practices, etc, which ensure their artists can never get independent from them without first getting massively popular entirely without the media companies' help.

        Copying is not stealing *by definition*.

        More and more artists are learning what Creative Commons is and *embraces* sharing as a way to get known - and "paradoxally", as a way to earn money.
        Natanael_L
      • Copying is not stealing by definition?

        So then why should any company be upset that a company in Asia "copies" their products and sell them at a reduced price?

        They technically did not steal anything from them.
        Tim Cook
    • That is Silly

      How are artists going to make any money that way? They probably don't make enough now but our society is still "pay to play".
      hforman@...
  • "The rumors of my death are greatly exaggerated."

    -Mr. File Sharing
    hawks5999
  • Until People get over...

    ...their crack-like addiction to the drug that the MPAA and RIAA produce, then this kind of thing will never go away.

    People have to make a break from buying this stuff, going to see movies and whatnot if they ever hope for it to change. I don't recommend pirating the materials otherwise they become martyrs, not the villains they are. Yes, they're trying to protect what they own, but the equivalent of nuking a city and arresting any who survives just to catch some criminals is downright heinous; that's what they attempted to force through with SOPA and will try again undoubtedly.

    Yes, this may involve a year or more without consuming any of their brand of crack, but I think people will realize after the withdrawal wears off and they've explored alternate entertainment that what they were watching before wasn't that great after all.
    Zorched
    • Then why not just create a file sharing site

      that does not allow video or audio content to be uploaded? This way people with legitimate files can have a place in which to share files, without having to worry about people with stolen property placing the site in jeopardy?
      :|
      Tim Cook
      • Why?

        "that does not allow video or audio content to be uploaded?"

        As if it all was copyrighted.

        Anyway...

        http://legaltorrent.net/

        More: http://gigaom.com/video/ten-sites-for-free-and-legal-torrents/
        Natanael_L
    • Get serious...

      Most of us do it and it's depersonalised 'stealing'. If you made a video and spent $100 publishing it to sell fr a few dollars and I copy it and sell it cheaper or free... you aiint gonna be happy. Most of us copy some music. I used to copy films but can't be bothered with low bitrates, low-fi when I can wait and buy a decent copy. That's the secret the mpaa need to garner... sell the stuff at a decent price and theres NO NEED to get a crap copy of a movie. I want 3D; I want 5.1 sound; I want the extras.... sell it for $15 instead of $35 and we'll all be happy.

      As for music, I'm of an age I download digital versions of what I have in Vinyl etc. I dont see that as stealing; I've paid for the material, I've paid the artist already and I'm not paying twice. That's my line anyway.
      pjmckay
  • can you stop prostitution?

    piracy is like prostitution, some things just can't be stopped.
    gundam_0083
  • I must admit, I am at a loss

    On one day the the respondents here claim that the copywrite owners should not go after individuals, instead take down the sites illegaly hosting the files, and on the next day they appear to say that the copywrite owners should not go after the illegal file sharing sites.

    If I am interpreting them correctly, they feel that people have the right to steal the works from others, regardless of what the copyright owners feel, or what they may lose.

    But I must ask: has anyone here advocating the theft of other's material ever created any content of their own as a form of income?

    Odd that so many will strongly back a musician who asks a politician not to use their material in campaign rallys, yet throw that musician's wishes to the wind because they feel the material is too pricy for them, and use that as a justification to steal that material themselves for their own use.

    Humans are a hypocritical species, that much is certain.
    :|
    Tim Cook