Megaupload seized / shut down

[dyeager]

The problem, I think, are recording companies and publishers, who at the end steal from artists far more than actual piracy does and are the biggest sponsors of shit like this. It's almost always publishers/recording companies/etc that crusade against this and frankly I'm getting tired of the U.S. government's kowtowing and turning our country into a corporate government. I consider it damn near to regulatory capture, if it isn't already.

Because they're the ones losing money. I can break out industry numbers about how much a new act makes, how much it costs to promote a single song, how much of each sale goes to the artist once they repay their advance etc. There's a reason the industry is losing money, and it's not because I have a 20G of stolen music on my hard drive.

And dyeager, the research is out there. You don't think the RIAA, the big four record companies, and their lawys don't make sure it doesn't get coverage or legitimacy?

I totally agree it seems far more likely that the reason the music industry is losing money is probably a lot more complicated than piracy.

If you feel you've seen research that you believe definitely solves the victim/victimless argument for piracy, I'd be more than happy to read it. Even if it doesn't I'm always interested in info on the topic.

[Ashtrot]

Exactly, they've had years of acting like a bunch of douches (read some of the stories here about the darker side of game development - you'll notice that consistently, publishers are fucking douches) and earning money for it, and now they're being even bigger douches because people are realizing how douchey they're being. What's worse is that the government is enabling their behavior. It's sickening.

I'm not defending piracy but damn near everyone who is actively supporting this shit don't actually produce things themselves. I deeply want to support artists and software producers because I have many friends and family who are artists and software producers, but every time I buy a book, or a music CD, or a game, thinking of how 10% - if that - end up going to the artists/producers and the other 90% goes to greedy corporate douches can give me significant pause at times.

On the victimless crime thing: I think piracy should be classified differently from stealing. Piracy is piracy and stealing is stealing, they are two distinct offenses that should carry different weights when it comes to accusations and sentencing.

When you steal a loaf of bread, you are actively depriving someone of a product they provide. It's possible that someone else might have bought it, but the physical item is no longer there for the market to take advantage of, sales wise. When you pirate something, you are not depriving a company of a physical object or the software used. They have 'lost' nothing, in theory. There's always the argument that people who pirate might have gone out and bought the game, but that's a logical fallacy publishers fall back on to look like the victims; if people wanted to, or could, buy the games, they probably would - and that's not considering the possibility of piracy being a demo, of sorts, to others. There are cheapskates who just pirate with reckless abandon despite having the means to buy games, but I honestly think they're the minority.

[dyeager]

Great points on all counts. I agree across the board. As much as I don't care what happens to Kim Dotcom and others at Megaupload, it is damn near impossible to defend the way it has been executed and the timing of course is particularly suspicious.

I also think that the loaf of bread analogy is clearly imperfect, especially given the physical nature of a loaf of bread (hence why I went with a loaf that was going to end up in the garbage regardless - but yeah, imperfect). I also totally agree that the whole "lost sale" theory as presented by publishers is nothing but fallacy.

Again, the only point I'm making here is simply that as much as I don't think publishers have proven their argument that they are being victimized by piracy, I remain equally unconvinced that taking something for free that is not being offered for free has no consequences whatsoever. Perhaps it doesn't. It may be that I will be completely proven wrong at some point, and it sounds like there are some folks right here at RPGFan that think I am wrong about it. But just as I believe it is on the publishers to prove they are actually losing money, I believe it is also on the pirate community to prove nobody is being victimized before engaging in it. That's just my personal opinion.

There is clearly money to be made in piracy - that much we can agree on, correct? Why if there is no intrinsic actual value to what is being pirated? The publisher argument doesn't add up to me even for a second, but neither does the piracy argument.

[Annubis]

It's hard to not see a correlation between all this

http://activepolitic.com:82/News/2012-01-22b/While_Being_Held_without_Bail_Megaupload_drops_Universal_Lawsuit.html

[dyeager]

Yeah, very shady.

[Hidoshi]

The O'Dwyer case is an awful example. When you comply with a cease and desist and then post up a new website that says "fuck the police" on it, you're flouting the law, and should expect repercussions. O'Dwyer's been put up as some kind of poster child for the free speech cause by guys like Jimmy Wales, but it's stupid. O'Dwyer was in the wrong. Is the force being used excessive? A bit, sure, but he's still a bad example. Proponents need to use better examples if they intend to actually fight an abuse of the law.

[dyeager]

One thing I find most interesting about the Megaupload case is on the one hand, we hate that publishers, who don't actually create the work being consumed, end up getting most of the money from artists. But then on the other hand you have sites like Megaupload that ALSO make crazy amounts of money off of those same artists but get no compensation whatsoever. The part where it is not okay for publishers to gyp artists by giving them only a tiny fraction of the revenue generated by their work but it IS okay for pirates to make money off of those same artists without even TOKEN compensation... it just makes absolutely no sense to me.

[Ashtrot]

The O'Dwyer case is an awful example. When you comply with a cease and desist and then post up a new website that says "fuck the police" on it, you're flouting the law, and should expect repercussions. O'Dwyer's been put up as some kind of poster child for the free speech cause by guys like Jimmy Wales, but it's stupid. O'Dwyer was in the wrong. Is the force being used excessive? A bit, sure, but he's still a bad example. Proponents need to use better examples if they intend to actually fight an abuse of the law.

I didn't realize making websites insulting people was basis for repercussion. "The law" isn't the playground bully, who can bash people's heads in for insulting them. When should I expect people on my doorstep for arguing for corporate separation from government? 5 years? 10? I may well be that the guy is a tremendous douche, but being a tremendous douche isn't a crime, it just makes you unpleasant.

Yeager, I don't defend Megaupload for that, the whole point of contention about this debate is the government being tremendous asshats.

[Vanguard]

This is how the record industry works (if you want, I will dig up my essay for the sources):

If you're signed to a major label, this is what your financial situation looks like. The average advance is $125,000. This is to cover the expenses of recording and touring. Promoting a single nationally costs $1,000,000 on average. This is all money you have to pay back. Until the record company recoups these expenses, you do not make any money from your albums, your concerts, or your merchandise. Virtually all contracts for a new act require that you sign your stage name and any music you will record over to the record company.

I don't have the sources on hand (they're in an essay I wrote on my laptop), but the break even point for this is 250,000 copies. Some estimates put this number as high as 500,000 copies. 95% of artists fail to achieve this level of sales, and will sell anywhere from 100,000 to 200,000 copies of their album. The most common scenario is that the record company releases them from their contract, but retain the rights to their music. This means you are not allowed to perform the songs you wrote under the name everybody recognizes. As a bonus, you owe the record company whatever you fell short of paying back, $10,000 on average.

So let's talk about the 5% who do make it. Think people like Madonna, Eminem, or Michale Jackson. How much do you think they get from a single CD sale? If you guessed .15 on average, you would be correct. Remember back when a CD was the most common way to listen to music? Remember how much we payed for them? $18 fucking dollars. Now, most people who buy music are doing so with an online site for .99 a track (keep in mind though, 85% of all downloads are illegal). The artists are making fractions of a penny from these sites. What's worse, because music is still promoted the same way it has been since the 1920s (see: a single on the radio), people are now are forgoing the album experience for the songs they recognize, netting the artist even less money.

The independent music industry fares much better. There are no advances here, typically. Both the artist and the company assume the risk. They split the costs of recording (much cheaper, anywhere from five to ten thousand), but the artist needs to support their own tour. Advertising is usually done by word of mouth, and records are sold at barely above cost. College radio plays (or played) a pretty big role in getting them exposure. That's the trick here, really. Without any sort of apparatus to broadcast your name nationally, getting your name out there is the hard part.

However, it happens. A band like Sebadoh was able to sell 10,000 copies of one of their albums in the early 90s without the advertising power of Sony or whomever. And they made more money than people who sold 200,000 copies of their album.

With the internet, it happens far more easily. There are two important technological developments in the last ten years. First, the cost of recording has come down significantly. I can make a demo on my iPad with Garage band ($5 app) for example. The second is social media. People are recording and listening to music at a rate that has never been possible. The internet is basically functioning the way word of mouth used to, except it's gone national.

Regardless of the size of the label you're signed to, the majority of the money you will make comes from touring. How do you get people to show up for your shows? Getting your music out there. The primary difference between the two is that being signed to a major label has an incredible amount of overhead, which is why album sales matter more here. However, for independent acts, which comprise the majority or artists out there, their overhead is low enough that piracy does not lose them all that much money, which is why they're usually happy to give it away for free if that translates into a bigger audience.

In short, piracy, at least in regards to the music industry, is an invented problem. The big players are upset because their predatory business practices are becoming less and less profitable as fewer musicians need to rely on them to provide a support structure. The best thing that could possibly happen is for Sony and the other big three record companies to implode so the model of the independent artists can become the dominant paradigm.

Note: if you need clarification on something, just ask. This is long and I typed it in a hurry.

[dyeager]

Yeager, I don't defend Megaupload for that, the whole point of contention about this debate is the government being tremendous asshats.

Oh yeah - totally didn't think you did. Sorry if it came off that way. I think we're in total agreement on the Fed's execution here.

[dyeager]

This is how the record industry works (if you want, I will dig up my essay for the sources):

If you're signed to a major label, this is what your financial situation looks like. The average advance is $125,000. This is to cover the expenses of recording and touring. Promoting a single nationally costs $1,000,000 on average. This is all money you have to pay back. Until the record company recoups these expenses, you do not make any money from your albums, your concerts, or your merchandise. Virtually all contracts for a new act require that you sign your stage name and any music you will record over to the record company.

I don't have the sources on hand (they're in an essay I wrote on my laptop), but the break even point for this is 250,000 copies. Some estimates put this number as high as 500,000 copies. 95% of artists fail to achieve this level of sales, and will sell anywhere from 100,000 to 200,000 copies of their album. The most common scenario is that the record company releases them from their contract, but retain the rights to their music. This means you are not allowed to perform the songs you wrote under the name everybody recognizes. As a bonus, you owe the record company whatever you fell short of paying back, $10,000 on average.

So let's talk about the 5% who do make it. Think people like Madonna, Eminem, or Michale Jackson. How much do you think they get from a single CD sale? If you guessed .15 on average, you would be correct. Remember back when a CD was the most common way to listen to music? Remember how much we payed for them? $18 fucking dollars. Now, most people who buy music are doing so with an online site for .99 a track (keep in mind though, 85% of all downloads are illegal). The artists are making fractions of a penny from these sites. What's worse, because music is still promoted the same way it has been since the 1920s (see: a single on the radio), people are now are forgoing the album experience for the songs they recognize, netting the artist even less money.

The independent music industry fares much better. There are no advances here, typically. Both the artist and the company assume the risk. They split the costs of recording (much cheaper, anywhere from five to ten thousand), but the artist needs to support their own tour. Advertising is usually done by word of mouth, and records are sold at barely above cost. College radio plays (or played) a pretty big role in getting them exposure. That's the trick here, really. Without any sort of apparatus to broadcast your name nationally, getting your name out there is the hard part.

However, it happens. A band like Sebadoh was able to sell 10,000 copies of one of their albums in the early 90s without the advertising power of Sony or whomever. And they made more money than people who sold 200,000 copies of their album.

With the internet, it happens far more easily. There are two important technological developments in the last ten years. First, the cost of recording has come down significantly. I can make a demo on my iPad with Garage band ($5 app) for example. The second is social media. People are recording and listening to music at a rate that has never been possible. The internet is basically functioning the way word of mouth used to, except it's gone national.

Regardless of the size of the label you're signed to, the majority of the money you will make comes from touring. How do you get people to show up for your shows? Getting your music out there. The primary difference between the two is that being signed to a major label has an incredible amount of overhead, which is why album sales matter more here. However, for independent acts, which comprise the majority or artists out there, their overhead is low enough that piracy does not lose them all that much money, which is why they're usually happy to give it away for free if that translates into a bigger audience.

In short, piracy, at least in regards to the music industry, is an invented problem. The big players are upset because their predatory business practices are becoming less and less profitable as fewer musicians need to rely on them to provide a support structure. The best thing that could possibly happen is for Sony and the other big three record companies to implode so the model of the independent artists can become the dominant paradigm.

Note: if you need clarification on something, just ask. This is long and I typed it in a hurry.

Really useful stuff - thanks for posting. And yeah, it's clearly a bleak situation for most artists with a major labor.

And again, I don't think we're in disagreement on the "tough shit" argument for labels losing money. However I still think that if you want to give something away for free that has to be your choice. Otherwise it is stealing.

That's a real short reply to a post that deserves better, but frankly I agree with the rest of it. I think that internet distribution or distributing music for free is not only a viable strategy, but probably one that will eventually be (if it already isn't) more profitable. But I still maintain that the choice to give something away is the right of property holder. If independent acts want to give their stuff away for free and are making good money that way as you claim here, then that is awesome. But that's still THEIR decision to do that.

[Demon_Princess_Kay]

This is relevant
http://www.escapistmagazine.com/videos/view/jimquisition/5268-Piracy-Episode-One-Copyright

[Vanguard]

That video sums things up nicely, Kay.

[Ragnarok-Sabin]

An interesting way to look at piracy that hasn't been touched on in this thread is the stance Gabe Newell (co-founder of Valve) takes towards it. That is, piracy is not a monetary issue, but a convenience issue. It's not universally true, of course, but a lot of people do not pirate music/movies/games/television shows because they can't afford them. Rather, they pirate them for the ease-of-access that pirated media gives.

Take a look at Steam. Where many publishers have controversial DRM mixed into their software that makes their games more difficult to play (can only play from the registered computer, can only play while online, etc), games bought on Steam fly in the face of this: so long as you log into your account, you can download and play any game in your library from any computer. You can also set up your account to play your games offline if they're already installed. So you buy your game in a digital copy, generally slightly cheaper than in-store retail prices. It's delivered immediately, over the internet, with no hassle, and without arbitrary restrictions placed on the use of the product you just paid for. And Steam is hugely successful, despite digital copies of games being being, generally, easier to pirate.

It's not just games, either. Louis C.K. recently released a new stand-up special over the internet, with no physical copy. You pay 5 dollars and receive two streams and 4 downloadable copies, instantly. All you need to do is pay through PayPal or Amazon--and you don't even need a PayPal account. The digital copy is a straight video file with no protection that anyone could turn around and post on the internet or in torrent files, requiring no cracks of any kind.

He made a million dollars in twelve days. All of that money went directly to him, where he used it to pay his employees, donated to charity, recouped costs, and paid his bills. Not a red cent went to any DVD publishers. Sure, some people probably downloaded it illegally because they're cheap, but I know that's the first time I've ever paid for a comedy special rather than watch it on YouTube or something. It was cheap to buy and ridiculously easy to get a hold of, and I think the sales show that people are willing to pay the money so long as they're not being jerked around. But jerk them around, and they will take the easier route, which is pirating.

Television is the same. I don't have a cable or satellite subscription at my apartment at all, since I have no desire to be (somewhat) bound by the scheduling, nor do I appreciate 3 minutes of adds for every 6 minutes of content. I also have no interest in paying for 5 other specialty channels if I want to watch, say HBO. So, until recently, I made liberal use of MegaVideo for my television fix.

But I also have a Netflix account, and always check to see if it's up there before I turn to streaming elsewhere. If I really enjoy the show, I will buy the DVDs--as I did for Community, despite having watched every available episode at the time. If networks would stop their quibbling and embrace services like Netflix (preferably only one, please and thank you) they would all be getting some of my money. Instead, they make it damn near impossible to watch at my convenience or without price-gouging me, and so I resort to methods that don't play that bullshit.

I realize this is getting pretty anecdotal, but I can't help but point out that as an anime fan, I have downloaded a lot of shows in my day. But I also have a Crunchyroll subscription, and just recently added a Funimation subscription as well. These days I only turn to fansubbers when I can't get it legally in a way that supports content creators in some way.

I don't have evidence to back it up, but I feel like the general consensus, even among (most) pirates, is this: If you offer a quality product for a reasonable price, don't jerk your customers around, and the creators are actually going to see our money rather than shady middlemen, people will buy things. Instead we get DRM, ads in things we're already paying for (DVDs, for example), a huge pain in the ass when we want to access content we've purchased, and the creators see next to nothing.

I sympathize with, though don't agree with, the idea that piracy is stealing. However, I think that the only thing that is allowing piracy to be a problem at all are the very people decrying it. Bring business models into this century, and I think a lot of the problem might work itself out.

[Vanguard]

I think you're doing it right. The people at the tops of these industries are dinosaurs who need to make access to their content easier. Otherwise, it's just going to get stolen. I have a Hulu+ account and a Netflix account. If I can't find what I'm looking for, I'm going the free way.