Monday 13 April 2015

Australia's love affair with illegal downloading...a response.

The article Pirate hunt: is this the end of Australia's love affair with illegal downloading?” by Kelsey Munroe in the Sydney Morning Herald, published 11 April 2015  is an interesting account of Australia’s interest in piracy, the causes and the consequences on content providers.

Following the Federal Court’s decision in favour of the Dallas Buyer’s Club a journalist asked the question “Is this the end of Australia’s love affair with illegal downloading?” No I don’t think the decision will affect illegal downloading in Australia. However, the journalist does provide some reasons I believe will help combat the problem and persuade those that are interested in doing the right thing not to illegally download content.

I agree…
“….Australia has become a land of content outlaws by circumstance. Consumer group Choice has argued that delayed Australian release dates, inflated prices and geo-blocks on overseas content provided incentives for Australian consumers to illegally download content. Market research and tech journalists agreed….(Munroe, Sydney Morning Herald)

I agree…
“…O'Halloran from consumer group ACCAN believes the new streaming services will likely have more impact on piracy than the legal and regulatory framework. "Ultimately the solution to this problem is market-based; so we really hope these services do move people away from piracy. There's evidence of that in the US – research shows that rates of piracy goes down as Netflix was rolled out. We think a similar kind of pattern will occur here." ….(Munroe, Sydney Morning Herald)

Pirate hunt: is this the end of Australia's love affair with illegal downloading? By Kelsey Munroe in the Sydney Morning Herald. 11 April 2015 (no copyright infringement intended).

After years of pirating with impunity, our judgment day is coming. From Monday, when season five of the blockbuster HBO series Game of Thrones begins on Foxtel, tens of thousands of Australians accustomed to ripping the sex-swords-and-dragons epic for free from file-sharing services need to think twice thanks to a landmark court judgement which underlines the illegality of their behaviour.

Australians are world-beaters when it comes to online piracy. Perhaps it's our convict heritage. If not you, then your neighbour, your colleagues or your kids are doing it. Otherwise-law-abiding citizens – particularly those under 35 – think nothing of watching TV shows and movies they've obtained illegally on file-sharing websites. Because it's free, it's easy, it's convenient, we're used to watching TV without paying for it. Until now, it's seemed to be a misdemeanour that was entirely without consequence for the perpetrators.

Almost one third of Australian adults admit to routinely using illegal download services to watch TV shows and movies – and that number is much higher in younger people. More than half of 18 to 24 year olds do it, according to the latest industry research. Australians are "the worst offenders of any country in the world", scolded Attorney-General George Brandis in a Senate Estimates hearing last year. 

In the same week as moves to tighten the noose around copyright pirates proceeded through the communications regulator, along came the Federal Court's landmark decision in a case brought by the owners of the Oscar-winning film Dallas Buyers Club against internet provider iiNet Ltd (and others). Industry observers are hailing it as a turning point in Australia's love affair with illegal downloading.

Game of Thrones is central to Australian viewers' complaints about the TV content market here. When Australian fans who were not Foxtel subscribers were left out in the cold for last year's fourth season, viewers rebelled, with thousands turning to illegal file-sharing sites like BitTorrent, Pirate Bay or Usenet to watch the show. Foxtel's exclusive deal with HBO locked up the fourth season until the end of the US broadcast, so fans who had previously been buying the show by episode on iTunes had to subscribe to Foxtel's products, download the show illegally, or wait three months.

One Sydney viewer, James, 37, says that pushed him to pirating for the first time. Foxtel was "too expensive, and came with heaps of rubbish we didn't want just to get one show," he says. He didn't want to wait while the buzz, plot twists and spoilers played out on social media. So he shelved his concerns about internet piracy and asked a friend who regularly used BitTorrent for a tutorial. It wasn't hard to find someone. "Everyone's doing it," he says.

James, who asked us not to use his last name in case he could be pursued for copyright infringement, tells a familiar story. Foxtel reported about 500,000 paid subscribers watched Game of Thrones season four last year, but within 12 hours after the finale screened, roughly 1.5 million internet users downloaded it illegally, according to internet tracking site TorrentFreak, making it the most pirated show in history. The main sources of those downloads were Australia, the UK, the US and Canada.

In this golden age of television, addictive, high-quality dramas have proliferated and download speeds have improved, as have file-sharing services. We have discovered we quite like watching whatever we want, whenever we want. Six episodes of Orange is the New Black on a rainy Sunday? Can do. Australia has become a land of content outlaws by circumstance. Consumer group Choice has argued that delayed Australian release dates, inflated prices and geo-blocks on overseas content provided incentives for Australian consumers to illegally download content. Market research and tech journalists agreed.

But it's an argument the TV and film industry couldn't stomach – what other product could people justify stealing by arguing the price was too high? "Dragons don't come cheap," complained Foxtel's Bruce Meagher. Now the backlash has finally begun.

Michael Wickstrom, the Vice President of Voltage Pictures – the film's owner – says the company's hand was forced by Australians' addiction to pirated content. "We feel that there's so high a level of piracy happening in Australia that the numbers are just so far beyond other western countries that we need to do something about this," he told Radio National this week.

Pursuing an aggressive strategy of enforcing their copyright, the film's owners sued six small Australian internet service providers, (iiNet, Dodo, Internode, Amnet Broadband, Adam Internet and Wideband Networks) demanding the names and addresses of their users who it alleged shared the film illegally. A 2012 High Court decision had ruled ISPs were not liable for their users' infringements, so Voltage took the fight directly to the users. They hired a German anti-piracy firm which tracked the accounts of Australian users uploading the film on BitTorrent.

The decision handed down by Justice Perram on Tuesday ruled that the ISPs must disclose the names and home addresses of about 4700 Australian internet account holders whose accounts were used to share the film. Uploading only a small "sliver" of the film was not a defence. Letters of demand threatening legal action or requesting payment will follow. The decision upended previous cases that kept infringers' identities private.

"The main takeaway for illegal downloaders is you can't do it in secret anymore," says Dominic Woolrych, a lawyer and online piracy specialist. "Now that you can be directly traced, there is a huge deterrent to illegal downloading. This is a real tipping point."

Legal arguments against pirating content have always run in favour of the rightsholders, but there remains a lot of resistance to that logic among viewers. Annual research since 2008 by the IP Awareness Foundation – an Australian movie and TV anti-piracy body – suggest the "principal reason people pirate is because it's free", says Executive Director Lori Flekser. "Everything else is an excuse – that stars are overpaid, that everyone's doing it – which is not true. That they don't like Murdoch or they don't want Foxtel. But what's interesting about this case is that one of the justifications pirates give for their activity is that there's not measures in place to stop it, which reinforces the belief that it's not important. This decision shows that content theft is being taken seriously."

The judgement has been warmly welcomed by the content industry in Australia which sees it as putting power back in the hands of rightsholders. But iiNet's chief David Buckingham said in a statement after the ruling that he was also pleased with the result because "by going through the process we've been able to ensure that our customers will be treated fairly and won't be subjected to the bullying we have seen happen elsewhere."

That's because iiNet's lawyers focused on the practice of "speculative invoicing" which Voltage Pictures used overseas. In the US the film's owners sent settlement letters (dubbed "pay up or else" letters by Choice) which threatened legal action against alleged infringers. The letters claimed they would be liable for up to US$150,000 ($196,500) damages in court unless they paid so-called settlement fees of up to $US7000 ($9000).

Justice Perram said this technique might be illegal in Australia, and required any letters to the infringers be first submitted to him for approval. So the consequences for those consumers who did illegally download Dallas Buyers Club in Australia aren't likely to be massive fines.

Yet consumer groups remain concerned the case will pave the way for more abusive practices in future.

"The courts aren't really set up to be reviewing every single draft letter rightsholders want to send out," points out Xavier O'Halloran from communications consumer body ACCAN. "It's a bullying practice that we don't think is the best way to deal with the problem of piracy."

The case is an odd one to have had such impact: the decision was a procedural step known as a "preliminary discovery" application targeting fewer than 5000 alleged infringers of the copyright in one small-budget Hollywood film, and Australian law does not permit the punitive damages that in the US have made these cases financially appealing to rightsholders. (Damages for copyright infringement in Australia might be more in the order of $14.99 per offence – the cost of buying the film on iTunes.) Plus, in this case, Voltage Pictures was ordered to pay the ISPs' costs, and the ISPs may yet appeal. So why do it?

For the deterrent effect, says Woolrych. "The film industry has seen what happened to the music industry five to 10 years ago and they know they need to come out swinging. It's a strategic move to get some publicity that it's illegal and that they will try to enforce their rights."

Piracy is destroying profits, Wickstrom said. "We are very serious because we're an independent producer and we live and die by these independent films – we need to protect our copyright," he told Radio National. "I believe that other producers are going to follow us because enough is enough, the profits are seriously being affected.

The decision comes amidst huge upheaval in the TV and movie content business in Australia. New video-on-demand streaming services including Seven-Foxtel joint venture Presto, Fairfax-Nine's Stan and US giant Netflix launched in 2015, offering low-cost "all you can eat" models which aim to make legal viewing more attractive than pirated content. So much for the carrot. The stick – anti-piracy regulation – is also catching up with viewing habits.

In an attempt to avoid new laws which would see ISPs liable for users' infringements, industry groups are negotiating a new voluntary code of practice with a "three-strikes" policy. Repeat infringers would be sent warning letters – rather euphemistically labelled "education notices" – by their telco. After three infringements in a year they could be pursued by copyright owners. In addition, communications minister Malcolm Turnbull late last month introduced a bill to permit movie, music and TV rights holders to apply to courts to block overseas file-sharing websites. The industry hopes that casual content pirates, scared by the court's decision, the new code or seduced by the legal services' offerings, will stop illegally downloading.

But dedicated pirates will have no trouble stepping around these measures. Research this month by Essential Media suggests the use of virtual private networks to protect users' anonymity is on the rise, with 16 per cent of Australians saying they have used a VPN or Tor, the anonymising routing system. The figure is 20 per cent for young people. VPNs are becoming easier to use and tech and media experts suggest VPN use is likely to skyrocket following the Dallas Buyers Club decision.

O'Halloran from consumer group ACCAN believes the new streaming services will likely have more impact on piracy than the legal and regulatory framework. "Ultimately the solution to this problem is market-based; so we really hope these services do move people away from piracy. There's evidence of that in the US – research shows that rates of piracy goes down as Netflix was rolled out. We think a similar kind of pattern will occur here."

If he's right, Dallas Buyers Club, a film that celebrated bending the law, may wind up an interesting footnote in Australian legal textbooks.


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