For the past several years most of the world has been waking up to the streaming piracy phenomenon, with pre-configured set-top boxes making inroads into millions of homes.

While other countries, notably the UK, arrested many individuals while warning of a grave and looming danger, complaints from the United States remained relatively low-key. It was almost as if the stampede towards convenient yet illegal streaming had caught the MPAA and friends by surprise.

In October 2017, things quickly began to change. The Alliance for Creativity and Entertainment sued Georgia-based Tickbox TV, a company selling “fully-loaded” Kodi boxes. In January 2018, the same anti-piracy group targeted Dragon Media, a company in the same line of business.

With this growing type of piracy now firmly on the radar, momentum seems to be building. Yesterday, a panel discussion on the challenges associated with piracy from streaming media boxes took place on Capitol Hill.

Hosted by the Information Technology and Innovation Foundation (ITIF), ‘Unboxing the Piracy Threat of Streaming Media Boxes’ went ahead with some big name speakers in attendance, not least Neil Fried, Senior Vice President, Federal Advocacy and Regulatory Affairs at the MPAA.

ITIF and various industry groups tweeted many interesting comments throughout the event. Kevin Madigan from Center for the Protection of Intellectual Property told the panel that torrent-based content “is becoming obsolete” in an on-demand digital environment that’s switching to streaming-based piracy.

While there’s certainly a transition taking place, 150 million worldwide torrent users would probably argue against the term “obsolete”. Nevertheless, the same terms used to describe torrent sites are now being used to describe players in the streaming field.

“There’s a criminal enterprise going on here that’s stealing content and making a profit,” Fried told those in attendance.

“The piracy activity out there is bad, it’s hurting a lot of economic activity & creators aren’t being compensated for their work,” he added.

Tom Galvin, Executive Director at the Digital Citizens Alliance, was also on the panel. Unsurprisingly, given the organization’s focus on the supposed dangers of piracy, Galvin took the opportunity to underline that position.

“If you go down the piracy road, those boxes aren’t following proper security protocols, there are many malware risks,” he said. It’s a position shared by Fried, who told the panel that “video piracy is the leading source of malware.”

Similar claims were made recently on Safer Internet Day but the facts don’t seem to back up the scare stories. Still, with the “Piracy is Dangerous” strategy already out in the open, the claims aren’t really unexpected.

What might also not come as a surprise is that ACE’s lawsuits against Tickbox and Dragon Media could be just a warm-up for bigger things to come. In the tweet embedded below, Fried can be seen holding a hexagonal-shaped streaming box, warning that the Department of Justice is now looking for candidates for criminal action.

Neil Fried of @MPAA with one of the streaming Kodi boxes leading to big piracy problems during Capitol Hill panel talk. Says DOJ looking at ‘variety of candidates’ for criminal action. @Comm_Daily pic.twitter.com/aYIRA4wgTC

— Matt Daneman (@mdaneman) March 7, 2018

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What form this action will take when it arrives isn’t clear but when the DoJ hits targets on home soil, it tends to cherry-pick the most blatant of infringers in order to set an example with reasonably cut-and-dried cases.

Of course, every case can be argued but with hundreds of so-called “Kodi box” sellers active all over the United States, many of them clearly breaking the law as they, in turn, invite their customers to break the law, picking a sitting duck shouldn’t be too difficult.

And then, of course, we come to President Trump. Not usually that vocal on matters of intellectual property and piracy, yesterday – perhaps coincidentally, perhaps not – he suddenly delivered one of his “something is coming” tweets.

The U.S. is acting swiftly on Intellectual Property theft. We cannot allow this to happen as it has for many years!

— Donald J. Trump (@realDonaldTrump) March 7, 2018

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Given Trump’s tendency to focus on problems overseas causing issues for companies back home, a comment by Kevin Madigan during the panel yesterday immediately comes to mind.

“To combat piracy abroad, USTR needs to work with the creative industries to improve enforcement and target the source of pirated material,” Madigan said.

Interesting times and much turmoil in the streaming world ahead, it seems.

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Regular Internet providers are being put under increasing pressure for not doing enough to curb copyright infringement.

Last year several major record labels, represented by the RIAA, filed a lawsuit in a Texas District Court, accusing ISP Grande Communications of turning a blind eye on its pirating subscribers.

According to the RIAA, the Internet provider knew that some of its subscribers were frequently distributing copyrighted material, and accused the company of failing to take any meaningful action in response.

Grande disagreed with this assertion and filed a motion to dismiss the case. The ISP argued that it doesn’t encourage any of its customers to download copyrighted works, and that it has no control over the content subscribers access.

The Internet provider admitted that it received millions of takedown notices through the piracy tracking company Rightscorp. However, it believes that these notices are flawed and not worthy of acting upon. It was not keeping subscribers on board with a profit motive, as the RIAA suggested.

A few days ago US Magistrate Judge Andrew Austin issued his “report and recommendation” on the motions to dismiss, which brings some good and bad news for both sides.

First of all, Judge Austin recommends granting the motion to dismiss the piracy claims against Grande’s management company Patriot Media Consulting, which is also listed as a defendant.

According to the order, the RIAA failed to show that Patriot employees were involved in the decisions or actions that led to the infringements, only that they may have been involved in formulating Grande’s infringement related policies.

“This is a far cry from showing that Patriot as an entity was an active participant in the alleged secondary infringement,” Judge Austin writes.

Moving to Grande Communications itself, Judge Austin recommends dropping the vicarious infringement claim, as Grande requested. To show vicarious infringement, the RIAA would have to prove that the ISP has a direct financial interest in the infringing activity. That is not the case here.

The record labels argued that the availability of copyrighted music lures customers, but the Judge found this allegation too vague, as it would apply to all ISPs.

“There are no allegations that Grande’s actions in failing to adequately police their infringing subscribers is a draw to subscribers to purchase its services, so that they can then use those services to infringe on UMG’s (and others’) copyrights,” Judge Austin argues.

“Instead UMG only alleges that the existence of music and the BitTorrent protocol is the draw. But that would impose liability on every ISP, as the music at issue is available on the Internet generally, as is the BitTorrent protocol, and is not something exclusively available through Grande’s services.”

While the above is good news for the Internet provider, the report and recommendation opt to keep the contributory infringement claim alive. Contributory copyright infringement happens where a defendant intentionally induces or encourages direct infringement.

Grande argued that Rightcorp’s notices were not sufficient to show that copyrighted material was ever downloaded, but Judge Austin disagrees. The RIAA has made a “plausible claim” that the ISP’s subscribers are infringing the labels’ copyrights.

“It would be inappropriate to dismiss the case based on factual allegations Grande makes about the Rightscorp notices and system, without any evidence to back those up,” Judge Austin’s recommendation reads.

In addition, Grande also argued that it’s protected from a secondary copyright infringement claim under the “staple article of commerce” doctrine, as “it is beyond dispute” that ISPs have numerous non-infringing uses.

Referring to the legal case between BMG and Cox Communications, Judge Austin says that this isn’t as clear as Grande suggests.

“The Court acknowledges that this is not yet a well-defined area of the law, and that there are good arguments on both sides of this issue,” the recommendation reads.

“However, at this point in the case, the Court is persuaded that UMG has pled a plausible claim of secondary infringement based on Grande’s alleged failure to act when presented with evidence of ongoing, pervasive infringement by its subscribers.”

The recommendation, therefore, is to deny the motion to dismiss the contributory infringement claim against Grande. If the U.S. District Court Judge adopts this position, it would mean that the case is heading to trial based on this claim.

—

Judge Austin’s full report and recommendations filing is available here (pdf).

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When Spotify launched its first beta in the fall of 2008, we described it as “an alternative to music piracy.”

From the start, the Swedish company set out to compete with pirate services by offering a better user experience. Now, a decade later, it has come a long way.

The company successfully transformed into a billion-dollar enterprise and is planning to go public with a listing on the New York Stock Exchange. While it hasn’t completely evaporated music piracy, it has converted dozens of millions of people into paying customers.

While Spotify sees itself as a piracy remedy, backed by the major labels, its piracy roots are undeniable.

In a detailed feature, Swedish newspaper Breakit put a spotlight on one of Spotify’s earliest employees, developer Ludvig Strigeus.

With a significant stake in the company, he is about to become a multi-millionaire, one with a noteworthy file-sharing past. It’s unclear what is current stake in Spotify is, but according to Swedish media it’s worth more than a billion Kroner, which is over $100 million.

Strigeus was the one who launched uTorrent in September 2005, when the BitTorrent protocol was still fairly new. Where most BitTorrent clients at the time were bloatware, uTorrent chose a minimalist approach, but with all essential features.

This didn’t go unnoticed. In just a few months, millions of torrent users downloaded the application which quickly became the dominant file-sharing tool.

Little more than a year after its launch the application was acquired by BitTorrent Inc., which still owns it today. While that part of history is commonly known, there’s a step missing.

Strigeus’ coding talent also piqued the interest of Spotify, which reportedly beat BitTorrent Inc. by a few months. Multiple sources confirm that the streaming startup, which had yet to release its service at the time, bought uTorrent in 2006.

While some thought that Spotify was mainly interested in the technology, others see Strigeus as the target.

“Spotify bought μTorrent, but what we really wanted was Ludvig Strigeus,” former Spotify CEO Andreas Ehn told Breakit.

This indeed sounds plausible as Spotify sold uTorrent to BitTorrent Inc. after a few months, keeping the developer on board. Not a bad decision for the latter, as his Spotify stake makes him a billionaire. At the same time, it was an important move for Spotify too.

Ludvig (Ludde) is still credited in recent uTorrent releases

In addition to having a very talented developer on board, who helped to implement the much needed P2P technology into Spotify, the deal with BitTorrent Inc. brought in cash that funded the development of the tiny, but ambitious, streaming service.

It might be too much to argue that Spotify wouldn’t be where it is without uTorrent and its creator, but their impact on the young company was significant.

The file-sharing angle was also very prominent in the early releases of Spotify. At the time, of all the tracks that were streamed over the Internet by Spotify users, the majority were streamed via P2P connections.

And we haven’t even mentioned that Spotify reportedly used pirate MP3s for its Beta release, including some tracks that were only available on The Pirate Bay.

Spotify’s brief ownership of uTorrent isn’t commonly known, to make an understatement. When BitTorrent Inc. announced that it acquired “uTorrent AB” there was no mention of Spotify, which was still an unknown company at the time.

Times change.

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BitTorrent users today have several basic ways to download content. The most popular is via a dedicated torrent client installed on a Windows, Linux, Android or similar operating system at home.

While this kind of activity is necessarily ‘local’, power users over the years have turned to systems that enable them to download and share potentially huge quantities of data.

Essentially computer servers running torrent client software in remote locations, these so-called ‘seedboxes’ became a must-have for anyone looking to stand out in the torrent world as a sharing sensation.

While widespread, companies selling access to seedboxes haven’t really generated much noise publicly over the years. However, this week an announcement from one of the longer-standing companies caught our attention. After being founded eight years ago, popular provider SeedStuff.ca has decided to exit the seedbox business.

“We originally opened in 2010, however we have seen an ever changing climate in the industry and as new technologies emerge and people shift to more conventional means of file sharing our services have seen a steady decline over the past few years,” the company said in a statement published on its website.

“At this time, it simply is no longer viable to continue offering the services we do.”

Considering BitTorrent itself made its mark as a disruptive technology, it’s interesting that a company like SeedStuff would have its business disrupted by other file-sharing methods. So, we asked the provider a little more about its history and its ultimate decision to close down.

“We started from the backroom IRC channels on 56k connections, so torrents have always been a blessing,” a spokesperson said.

“Between 2005 and 2010, I think the rise of ‘Private’ trackers really started to make the scene shine. You were able to find and connect with the content you wanted as well as the communities of people who shared interests as well.

“The private trackers gamified seeding and rewarded their best members, this is what really paved the way for seedboxes. The users felt a need to compete and often did not have access to the means to do so, but could contract these machines out to help them succeed. The demand for seedboxes started in about 2010, which I think you will see coincided with a huge spike of private tracker activity.”

SeedStuff says its initial aim was to improve user experience by not following the decision by many existing providers to “stuff as many users as possible” into each server. Restricting each unit to a maximum of four users and accepting just a small profit on each, the service grew while gaining support from customers.

“At our peak, we serviced over 4000 customers per month. Our total email database was well over 10,000 customer accounts. We did not monitor bandwidth or user activities as we felt this to be intrusive. We only dealt with server providers who offered unlimited bandwidth so that we were able to allow for the best user experience without limits,” the company explains.

But after several years of growth, SeedStuff noticed a change. In addition to suffering a painful database crash caused by a host and a failed backup regime, in 2015 the company observed a shift in user patterns.

“We noticed around this time that streaming services had started to become mainstream in almost every home and people were simply not using our services anymore. The main cancellation reason for the last three years has been ‘Not needed anymore’,” SeedStuff notes.

“I think torrenting developed for many reasons including ease of use, availability and cost to access media. Many of these issues have been improved by current systems so there is no need for consumers to use torrents for half their content, but we aren’t there yet and the industry seems to be dialing it back again.”

SeedStuff believes that while there will be a steady decline in torrent usage, the protocol will remain relevant for a long time to come. It could even enjoy a resurgence if distribution companies restrict availability or require multiple accounts to access all content.

“If a customer needs dedicated Netflix, HBO, CBS and Hulu accounts to access the shows they want, they might see these costs as too much compared to a decent torrenting connection,” the company says.

Of course, market changes can always have an effect on a company’s direction but SeedStuff says that in addition to tackling a myriad of technical issues, in the end there were also problems with team members migrating to other areas.

“Some of our team also moved on to new projects and started new companies which are now more exciting to them. Everything compounded and eventually lead us to split and go our separate ways. We just wanted to thank everyone who remained a customer through the years and are sorry we had to shut down,” the company concludes.

While there are plenty of other seedbox providers around, it seems fairly clear that things aren’t what they used to be, with streaming and other technologies all helping to disrupt the market. SeedStuff points towards IPFS as yet another potential torrent disrupter of the future. Time will tell.

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