For many people, on-demand streaming services have become the standard for watching movies and TV-shows.

In many countries, the idea of ‘on-demand’ video was popularized by piracy. This was often the only way for people to watch what they want, whenever they liked. 

Over the past decade, the legal options have gradually improved. More content is available and people have plenty of options to stream the latest hit-series or Hollywood blockbusters. 

According to new consumer research by Ampere Analysis, this is one of the reasons why video piracy rates are dropping in several countries, including the United States, France, Spain, and Germany. 

The bar chart below shows the percentage of people who used one or more video piracy services in the previous month. Without exception, video piracy rates declined during the three year period from 2016 to 2019 in all countries that were polled. 

The drop was most pronounced in France, the United States, and the Netherlands where the number of people using piracy services in the past month was decreased by more than half. Spain also saw a sharp decline, from 12% to 7%.

Richard Broughton, Director at Ampere Analysis, links the changes to the increased availability of on-demand services, such as Netflix, which directly compete with piracy.

“On average, in markets where either catch-up or SVoD online video viewing has risen the most, piracy has experienced the biggest drop. With the growth in all-you-can-eat legal services, users no longer need to turn to illegitimate sources to get their viewing fix,” Broughton notes.

This is backed up by data. In Spain, for example, the use of legal SVoD and catch-up services grew by 47% while the number of people that use piracy services and sites dropped by 45%.

While this is positive news for entertainment companies, there is also reason for concern. Increasingly, the legal video streaming landscape is becoming more fragmented or siloed. This means that people have to pay for more services to see what they want.

These new restrictions could push people in the direction of pirate sites again. 

“The on-demand market is moving into a period of ‘siloization’ where producer and distributor brands go direct to the consumer, at the same time restricting the amount of content they license to third party services,” Broughton says.

“If the mainstream OTT players have less of the content users want to watch, when they want to watch it, there’s a genuine risk that usage of these SVoD and catch-up services could begin to slump, something the pirate operators will be quick to capitalize on.”

This isn’t just a hypothetical threat either. Most households have a limited budget for online entertainment, so consumers eventually have to choose which services they want. This is a problem that keeps getting worse, especially now that more services have ‘exclusive’ titles.

Recent research by piracy research firm MUSO revealed that 80.4% of UK consumers already feel that they’re already paying too much for content streaming. More than half of these said they were likely or very likely to use unlicensed platforms to search for content that’s not available to them.

These people are all willing to pay. However, in order to get everything they want, they are happy to complement their legal viewing with the occasional pirate download or stream.

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Two weeks ago U.S. District Judge Joan N. Ericksen sentenced Paul Hansmeier to 14 years in prison, to be followed by two years of supervised release.

Hansmeier was a key player in the Prenda Law firm, which pursued cases against people who were suspected of downloading pirated porn videos via BitTorrent. 

Hansmeier and fellow attorney John Steele went a step further though. Among other things they lied to the courts, committed identity theft, and concocted a scheme to upload their own torrents to The Pirate Bay, creating a honeypot for the people they later sued over pirated downloads.

Both attorneys pleaded guilty and Hansmeier was the first to be sentenced. However, he is not planning to let the matter go without a fight. This was already made clear in his plea agreement last year, where he reserved the right to appeal.

This week Hansmeier’s informed the court that he is indeed appealing to the United States Court of Appeals for the Eighth Circuit. The notice reveals that he is appealing both the sentence and conviction, challenging the reasonableness of the sentencing and the application of the sentencing guidelines.

Hansmeier initially hoped to be released pending his planned appeal. Before the sentencing, his attorney put in a request to make this happen, in an effort to keep him out of prison.

The U.S. prosecution objected and asked the court not to allow bail. Among other things, it argued that the Prenda attorney may be a flight risk, considering that he previously lied to courts, created sham entities in order to shield himself, and destroyed evidence when he was found out.

The court sided with the prosecution and denied the bail request. This means that Hansmeier will serve time while his appeal is ongoing. 

There was initially also some positive news for the Prenda attorney. Through his bankruptcy trustee, he was awarded a $75,000 settlement for restitution the lawyer previously paid against an accused file-sharer, while not being a named party. 

Hansmeier is not going to see any of that money though, as U.S. Attorney Erica MacDonald swiftly put in a request to reserve the funds for the victims of the Prenda scheme.

“Hansmeier is set to receive a substantial amount of money and justice requires an order for its immediate payment towards the restitution he owes his victims,” MacDonald wrote.

The court agreed and this week ordered that the $75,000 should be reserved for potential victims. The court previously ordered that, in addition to the prison sentence, Hansmeier must pay his victims a total of $1.5 million in restitution.

For now, however, all eyes will be on the appeal. 

John Steele, the second defendant in the Prenda case, is scheduled to be sentenced in July. The U.S. prosecutor previously stated that Steele has been very cooperative following his arrest so has recommended an 8-10 year sentence.

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Strike 3 Holdings, one of the most active copyright trolls in the United States, has filed cases against thousands of alleged BitTorrent pirates in recent years.

While many of the defendants may indeed be guilty, quite a few of the accused Internet subscribers have done nothing wrong.

This is also what a John Doe, known by the IP-address 73.225.38.130, has repeatedly argued before a federal court in Seattle, Washington.

The defendant in question was sued by Strike 3 Holdings late 2017. In common with other defendants, the man was offered a settlement to let the case go, but instead, he went on the offensive.

As it turns out, the adult company picked a fight with a 70+-year-old retired police officer, who lawyered up to fight back.

Following some initial pushback in court, Strike 3 Holdings was ready to let the case go. The company filed a motion to voluntarily dismiss all claims in August, but the former policeman wasn’t willing to let them. At least, not without getting paid.

The defendant moved for a declaratory judgment of non-infringement, submitting a counterclaim accusing Strike 3 of abuse of process and “extortion through sham litigation.” Strike 3, for its part, moved for summary judgment asking the court to dismiss that counterclaim.

Over the past months, both parties have conducted discovery, hoping to bolster their positions ahead of a trial that’s scheduled for later this year.

The retired police officer, for example, has asked for a copy of the source code of Strike 3’s BitTorrent tracking software IPP. The court granted this request in part and allowed the defendant to issue a subpoena requesting a copy of the software’s source code. Thus far, however, that hasn’t happened.

This week the defendant, therefore, submitted a second motion, requesting a copy of the code. Or if that’s not an option, the court should exclude any evidence that’s based on it.

“It is not Doe’s burden to prove the software is forensically sound. That is Strike 3’s burden. At this point, Strike 3 is playing ‘hide the ball’. If Strike 3 does not comply with the Subpoena, then the IPP Code and any data relying upon it should be excluded as unreliable,” the motion to compel (pdf) reads.

In addition, the retired police officer also submitted a supplemental response to Strike 3’s motion for summary judgment. Among other things, his attorney points out that, instead of naming the defendant, Strike 3 went on a “fishing expedition” to find out who else could be the infringer.

The ‘initially’ accused alleged pirate points out that, based on the IPP software, Strike 3 can never prove that he downloaded a full copy of its works, accusing the company of abuse of process by going after third parties instead.

The defendant’s argument is that the complaint was unjustified and that Strike 3 knew this.

“Despite blatant and unequivocal allegations in their motion for early discovery that Doe is the infringer, and that full copies of Strike 3’s works were downloaded, Strike 3 knew that their investigator could never prove that Doe had downloaded entire films, and that they might not have the right defendant.

“Both of these facts are material to whether a court might find good cause for early discovery. Yet Strike 3 disclosed neither. Nor did Strike 3 disclose, contrary to their motion, that they intended to investigate third parties other than Doe. Strike 3’s conduct constitutes abuse of process,” the Doe defendant adds (pdf).

However, the adult content producer disagrees.

The third party, in this case, is the son of the retired police officer. According to Strike 3, this may be the person who downloaded its adult movie. At least, according to information it obtained during discovery, including a deposition of the son.

“Through the litigation process, Plaintiff has uncovered a substantial amount of evidence confirming the validity of its original Complaint and IPP’s system – evidence which Defendant has improperly sought to withhold from discovery,” Strike 3 argues (pdf).

The aforementioned passage comes from Strike 3’s motion to compel the defendant to allow one of his hard drives to be images and inspected. The hard drive in question was used by the son and taken out of a computer that was previously sold.

During the deposition, the son admitted that he used the computer, which had uTorrent installed on it, to access The Pirate Bay through which he downloaded adult content. This also happened during the time of the alleged copyright infringement.

According to Strike 3, this could be the “smoking gun” which shows that its original complaint, based on IPP’s evidence, was justified.

“The Son’s deposition testimony clearly makes this Hard Drive relevant and may, indeed, be the literal ‘smoking gun’ demonstrating that Plaintiff’s initial suit was entirely justified, and Defendant’ counterclaims are nothing less than a fraud upon the Court,” Strike 3 writes.

The various court filings and additional arguments make it clear that both sides are working hard to make this case go in their favor.

The court has yet to review the arguments and rule on the motions. After discovery is completed, the case is expected to go to trial. Both parties have indicated they prefer a bench trial, instead of a trial by jury.

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With millions of dedicated fans around the world, Mixed Martial Arts (MMA) events are extremely popular.

They are also relatively expensive and as a result, unauthorized broadcasts are thriving.

For most popular fight cards, dozens of dedicated pirate streams are queued up via unauthorized IPTV services, streaming torrents, and streaming sites, in the latter case often masked with an overlay of ads. At the same time, unauthorized rebroadcasts also appear on more traditional Internet platforms, such as YouTube, Facebook, and Twitter.

This is a thorn in the size of rightsholders, including the UFC, which dominates the MMA fighting scene. To tackle the problem the UFC has employed various anti-piracy strategies. Most recently, it contracted Stream Enforcement, a company that specializes in taking down pirated broadcasts.

In addition, the MMA promoter also involves itself in the lawmaking process. Just a few weeks ago, UFC General Counsel Riché McKnight, shared his anti-piracy vision with the Senate Committee on the Judiciary.

One of the main goals for the UFC is to criminalize unauthorized streaming. Unlike downloading, streaming is currently categorized as a public performance instead of distribution, which is punishable as a misdemeanor, instead of a felony.

The Senators made note of this call, which was shared by another major sports outfit, the NBA. They also had some additional questions, however, which McKnight could answer on paper later, so it could be added to the record.

These answers, which were just published, show that the UFC is not satisfied with how some social media companies and other online services address the pirate streaming issue.

McKnight explains that the UFC has takedown tool arrangements with several social media companies, but adds that online platforms have neglected its requests to combat illegal streaming more effectively.

“We believe communication, coordination, and cooperation could be greatly improved. Our general experience is that those subject to the Digital Millennium Copyright Act (DMCA) use it as a floor and do the minimum required to be in compliance,” McKnight notes.

The UFC notes that Facebook recently bettered its communication and ‘slightly’ improved its takedown response but overall, more could be done. However, most online services appear to be reluctant to voluntarily do more than the law requires, which means that in order to trigger change, the law should change.

“Private, voluntary partnerships [with online platforms] are not sufficient to combat online piracy. Addressing this problem requires a new approach that includes a strong legal framework, a combination of private and public enforcement, and enhanced cooperation with our international partners,” McKnight writes.

Criminalizing streaming is a step forward, according to the UFC. However, that doesn’t affect the platforms that host these streams, as these are protected by the DMCA’s safe harbor provisions.

According to the UFC’s General Counsel, Congress should consider other options as well. In particular, changes to the legal framework that will motivate social media companies and other online platforms to proactively prevent piracy.

“Congress should examine how best to properly incentivize platform providers to protect copyrighted online streaming content,” McKnight writes.

“Transitioning from a reactive ‘take down’ regime to a proactive ‘prevention’ regime would better protect and enhance a vibrant online ecosystem,” he adds.

McKnight specifically mentions policies to effectively ban repeat infringers, which is already part of the DMCA, but not always properly implemented.

While not specifically mentioned, the words “proactive” and “prevention” are reminiscent of the EU’s Article 17, which could potentially lead to upload filters.  The UFC doesn’t reference filters here, but other rightsholders have in the past.

Later this year, the US Copyright Office is expected to issue a report on the effectiveness of the DMCA’s safe harbor provisions. This will be based on input from a variety of stakeholders, some of which discussed filtering requirements.

The UFC hopes that the Copyright Office report will further help Congress to shape a more effective legal framework to tackle online streaming.

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A copy of the written responses to the questions from the Senate Committee on the Judiciary is available here (pdf).

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