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I think you are not aware of the business model of MegaUpload. 1. John uploads a file and distributes the link. 2. Jane wants to download the file. She can do

I think you are not aware of the business model of MegaUpload. 1. John uploads a file and distributes the link. 2. Jane wants to download the file. She can do it freely (low speed, daily limits) or for a little fee (fast download, no limits). 3. Jane wants to download many files, so she signs up for a premium account. 4. John gets a comission from MegaUpload. What happens if John uploads copyrighted material and drives sales for MegaUpload using pirated software and movies? Well...the file gets removed, but nothing else. He can continue doing it again and again, even uploading the same file again. And this was going on on a massive scale, hundreds of people were earning several thousand dollars per month from this and -- according to court documents -- Kim was very much aware of this and even actively encouraged uploaders to supply copyrighted material to the system.

lmm 12y ago
Plenty of the named SV startups - AirBnB or Uber - have their whole business model fundamentally based on encouraging people to violate laws (by renting out rooms in violation of local regulations, or by acting as a taxi driver in a car that isn't insured for it). Just as with MegaUpload, you don't have to break the law to use the service, but most people do, and they turn a very blind eye to it.
- rtpg 12y ago
  Even if people might think that freely sharing movies shouldn't be illegal, I think that most people feel that some random guy on the internet making money distributing camrips of The Dark Night is Not Cool(tm). I think a lot less people have much of an opinion on unlicensed cabbies existing. AirBnB is a bit more controversial (anti-subletting clauses are there for neighbors more than for landlords, and NIMBY plays a role), but some people are cool with that so long as they trust their neighbor's judgement. I do agree that the SV-ness of these two companies has helped immensely.
  - howeyc 12y ago
    What people think is immaterial. With all three companies (Uber,Airbnb,MegaUpload) you have people breaking the law using the service. All three services turned a blind eye to this in the name of "disruption." Kim's downfall is likely twofold: 1. Lack of Valley VCs with money saying what he's doing is good for the world. 2. The entertainment money lobby is very strong. I don't think there are taxi or anti-subletting lobbies of similar weight.
  - toyg 12y ago
    > I think a lot less people have much of an opinion on unlicensed cabbies existing. No, it's just that the taxi lobby is less powerful than Hollywood, and is less used to spreading mass-propaganda. Have you ever seen ads shouting "Driving an unlicensed cab is A FELONY!" before every piece of entertainment you consume? That's why you think "most people feel" this or that about copyright infringement. It has nothing to do with the actual matter or the intensity of "natural feelings" of Joe Average about this or that topic. After all, before Napster was sued, the overwhelming majority of any population had no qualms whatsoever about copying anything digital (computer programs etc), not unlike we all had no qualms about using Uber until cabbies revolted. Napster/Mega/Uber/AirBnB all shared the commonality of enabling illegal practices on a scale previously deemed impossible. Whether this is a good thing or a bad one, it depends on individual categories, but there is no denying that they all share a fundamental challenge/disobedience of established laws.
    - rtpg 12y ago
      Please read what I said a bit more carefully. I don't think people had a problem with Napster because it was the logical extension of copying your friends' tapes. But I think some people have moral qualms about copying tapes and then selling them for more than cost.
      - toyg 12y ago
        Please read what I said more carefully. My point is that nobody was even thinking of digital duplication as an issue that required discerning between people doing it for love and people doing it for money. We were forced to develop an opinion, forced to draw this particular line by established interests crying foul ever since the '70s (and probably even before). We weren't born with an innate sense that is wrong to pay for certain types of digital copies; our rational economic instinct is to try and get the best bang for our buck, not to investigate whether the seller is actually allowed to sell us that particular bang. That is why contraband is as old as the world. It was a constant stream of threats and propaganda from established interests that taught us that there is a "good copy" and a "bad copy" and people selling "bad copies" are unworthy of getting our money. Now it's natural to think that there is a line to draw, regardless of where you actually draw it. That line wasn't there before "they" told us to look for it. For taxis and hospitality, this process of education/indoctrination has not happened, because there was no real need -- these matters were settled in law decades ago through the (mostly democratic) process, and that was it. Established interests could draw the line at any time with a couple of phone calls, because you can't hide a hotel or a cab for long; there was no need to involve the public, no need to divulge the finer points of hospitality law or to develop in their customers a critical approach to doing business in these markets like the entertainment industry was doing. Now Uber and AirBnB are simply bypassing these established systems by using scale. They make infringers small enough and numerous enough to make enforcement unpractical on the ground, and use that as a lever to remove established systems of control. Incumbents are forced to ask the public to do the enforcement themselves, like the entertainment industry started doing so many years ago. So now more and more people know that there is a line to draw in those industries as well, but in numbers nowhere near what the entertainment industry amassed in almost 50 years of continuous advertisement of "bad practices". That doesn't mean that they don't have the exact same reasons of the entertainment industry: "the law says X and these people are doing Y, please make them stop". (In fact, they probably have even more reasons, since regulation of these industries has some foundation in actual threats to the public -- hotels with no emergency exit, drunk unlicensed drivers etc. -- whereas nobody ever died because of an unlicensed tape.)
- davidw 12y ago
  Napster was a SV startup and got promptly shut down for distributing copyrighted material.
  - tokipona 12y ago
    Promptly? No, it took several years to shut Napster down.
  - regency 12y ago
    Not true. Napster operated for over two years before being shut down.
axx 12y ago
The real problem is the copyrighted material. I personally think it's perfectly OK to share revenue with your users if someone else signs up for your service and downloads something that you've share. MegaUpload makes a profit from people buying Premium because of a certain user and they reward them for that. If the copyright-topic wasn't an issue, this would be quite a nice business model (at least a kind of fair one). But this revenuesharing thing encourages people to upload files for a mass audience, and that's the reason why this doesn't work.
zorked 12y ago
So it worked exactly like YouTube?
- neolefty 12y ago
  Doesn't YouTube have a mechanism to divert the revenue to the copyright holder, but still keep the video up? Some overlap in functionality -- sharing potentially copyrighted material -- but the attitude of the two companies seems pretty different.
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lmm 12y ago

Plenty of the named SV startups - AirBnB or Uber - have their whole business model fundamentally based on encouraging people to violate laws (by renting out rooms in violation of local regulations, or by acting as a taxi driver in a car that isn't insured for it). Just as with MegaUpload, you don't have to break the law to use the service, but most people do, and they turn a very blind eye to it.

rtpg 12y ago
Even if people might think that freely sharing movies shouldn't be illegal, I think that most people feel that some random guy on the internet making money distributing camrips of The Dark Night is Not Cool(tm). I think a lot less people have much of an opinion on unlicensed cabbies existing. AirBnB is a bit more controversial (anti-subletting clauses are there for neighbors more than for landlords, and NIMBY plays a role), but some people are cool with that so long as they trust their neighbor's judgement. I do agree that the SV-ness of these two companies has helped immensely.
- howeyc 12y ago
  What people think is immaterial. With all three companies (Uber,Airbnb,MegaUpload) you have people breaking the law using the service. All three services turned a blind eye to this in the name of "disruption." Kim's downfall is likely twofold: 1. Lack of Valley VCs with money saying what he's doing is good for the world. 2. The entertainment money lobby is very strong. I don't think there are taxi or anti-subletting lobbies of similar weight.
- toyg 12y ago
  > I think a lot less people have much of an opinion on unlicensed cabbies existing. No, it's just that the taxi lobby is less powerful than Hollywood, and is less used to spreading mass-propaganda. Have you ever seen ads shouting "Driving an unlicensed cab is A FELONY!" before every piece of entertainment you consume? That's why you think "most people feel" this or that about copyright infringement. It has nothing to do with the actual matter or the intensity of "natural feelings" of Joe Average about this or that topic. After all, before Napster was sued, the overwhelming majority of any population had no qualms whatsoever about copying anything digital (computer programs etc), not unlike we all had no qualms about using Uber until cabbies revolted. Napster/Mega/Uber/AirBnB all shared the commonality of enabling illegal practices on a scale previously deemed impossible. Whether this is a good thing or a bad one, it depends on individual categories, but there is no denying that they all share a fundamental challenge/disobedience of established laws.
  - rtpg 12y ago
    Please read what I said a bit more carefully. I don't think people had a problem with Napster because it was the logical extension of copying your friends' tapes. But I think some people have moral qualms about copying tapes and then selling them for more than cost.
    - toyg 12y ago
      Please read what I said more carefully. My point is that nobody was even thinking of digital duplication as an issue that required discerning between people doing it for love and people doing it for money. We were forced to develop an opinion, forced to draw this particular line by established interests crying foul ever since the '70s (and probably even before). We weren't born with an innate sense that is wrong to pay for certain types of digital copies; our rational economic instinct is to try and get the best bang for our buck, not to investigate whether the seller is actually allowed to sell us that particular bang. That is why contraband is as old as the world. It was a constant stream of threats and propaganda from established interests that taught us that there is a "good copy" and a "bad copy" and people selling "bad copies" are unworthy of getting our money. Now it's natural to think that there is a line to draw, regardless of where you actually draw it. That line wasn't there before "they" told us to look for it. For taxis and hospitality, this process of education/indoctrination has not happened, because there was no real need -- these matters were settled in law decades ago through the (mostly democratic) process, and that was it. Established interests could draw the line at any time with a couple of phone calls, because you can't hide a hotel or a cab for long; there was no need to involve the public, no need to divulge the finer points of hospitality law or to develop in their customers a critical approach to doing business in these markets like the entertainment industry was doing. Now Uber and AirBnB are simply bypassing these established systems by using scale. They make infringers small enough and numerous enough to make enforcement unpractical on the ground, and use that as a lever to remove established systems of control. Incumbents are forced to ask the public to do the enforcement themselves, like the entertainment industry started doing so many years ago. So now more and more people know that there is a line to draw in those industries as well, but in numbers nowhere near what the entertainment industry amassed in almost 50 years of continuous advertisement of "bad practices". That doesn't mean that they don't have the exact same reasons of the entertainment industry: "the law says X and these people are doing Y, please make them stop". (In fact, they probably have even more reasons, since regulation of these industries has some foundation in actual threats to the public -- hotels with no emergency exit, drunk unlicensed drivers etc. -- whereas nobody ever died because of an unlicensed tape.)
davidw 12y ago
Napster was a SV startup and got promptly shut down for distributing copyrighted material.
- tokipona 12y ago
  Promptly? No, it took several years to shut Napster down.
- regency 12y ago
  Not true. Napster operated for over two years before being shut down.

axx 12y ago

The real problem is the copyrighted material. I personally think it's perfectly OK to share revenue with your users if someone else signs up for your service and downloads something that you've share. MegaUpload makes a profit from people buying Premium because of a certain user and they reward them for that. If the copyright-topic wasn't an issue, this would be quite a nice business model (at least a kind of fair one). But this revenuesharing thing encourages people to upload files for a mass audience, and that's the reason why this doesn't work.

zorked 12y ago

So it worked exactly like YouTube?

neolefty 12y ago
Doesn't YouTube have a mechanism to divert the revenue to the copyright holder, but still keep the video up? Some overlap in functionality -- sharing potentially copyrighted material -- but the attitude of the two companies seems pretty different.
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- deleted 12y ago
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