How MasterCard and Visa Are Fueling $96 Million In Content Piracy…

These are the 15 most successful digital download lockers.  Every single one of them sells premium accounts, and every single one of them accepts MasterCard, Visa, or both.

downloadlockerrev

According to just-released research from NetNames, a very similar picture emerges among streaming cyberlockers as well, like Putlocker and YouWatch.  “Every cyberlocker that offered paid premium accounts to users provided the ability to pay for those subscriptions by Visa or MasterCard, with only one exception,” the NetNames report states. “Only a single cyberlocker accepted PayPal.”

Overall, NetNames found that the top 30 cyberlockers sites make $96 million in revenues, annually, which amounts to a lot of processing fees.  “Without the subscription payments, revenues and profit – particularly for the direct download cyberlockers – would drop off dramatically,”said David Price, Head of Piracy Analysis at NetNames.

“Content theft fuels the success of cyberlockers and the facilitators of this business model – like payment processors and the advertising industry – frequently do nothing to prevent their successful operation.”

And why isn’t Paypal offered?  Three years ago, PayPal was the payment method of choice for cyberlockers, though the site has since implemented a number of policies to prevent piracy and illegal transactions.

In 2014, NetNames found that only a single cyberlocker (Mega) accepted premium subscriptions through PayPal.

 

60 Responses

  1. Anonymous

    “MasterCard and Visa Are Fueling Content Piracy”

    That obviously has to stop. But is Mega still a piracy site? (Not a rhetorical question, I honestly don’t know what Dotcom is up to these days. I just haven’t heard of any problems lately — at least not a la 4Shared, etc.)

    Reply
  2. Anonymous

    Speaking of piracy… how come you didn’t even mention last week’s hottest news?

    From hypebot and TIME:

    “More details are starting to emerge regarding the new digital music format that U2 is working on with Apple. The project which Bono says would assure that songwriters and artists get paid for creating music is about 18 months away from launch. “I think it’s going to get very exciting for the music business,” Bono tells Time, “[it’s] an audiovisual interactive format for music that can’t be pirated and will bring back album artwork in the most powerful way, where you can play with the lyrics and get behind the songs when you’re sitting on the subway with your iPad or on these big flat screens. You can see photography like you’ve never seen it before.””

    ‘Can’t be pirated’ obviously means we’re not only talking about a new proprietary Apple format — available on iTunes — but also a new Apple player.

    If that’s not interesting, I don’t know what is…

    Reply
    • Anonymous

      If it can be heard it can be pirated. Though forced interactivity and being DRMed to Apple products only will kill the format before it even launches.

      Reply
      • Anonymous

        “If it can be heard it can be pirated”

        Ha, that’s funny, I just addressed that — please see why you’re wrong in my comment below…

        Reply
          • Anonymous

            Hehe, nice to see the instant resistance!

            Not exactly surprising, though. 🙂 A format you can’t steal. Imagine that! What a tragedy to the Pirate Industry…

            You know it, and I know it — this may indeed be the Next Big Apple Thing!

          • Anonymous

            You do realize every single attempt to protect music/videos from unauthorized duplication has failed? Apple is not the first company to try this. This isn’t even Apple’s first attempt. No one has been successful.

          • Anonymous

            Keep it up, 🙂 I love your enthusiasm. And I understand your fear:

            This could be big!

          • Neel

            Pirates are also the biggest Buyers and Promoters of content.
            Anything that can’t be copied can’t be promoted by pirates, and the loss of free promotion kills the content by choking the creator’s revenue.

          • Anonymous

            “Anything that can’t be copied can’t be promoted by pirates”

            Promoted by pirates??? Hahaa!

            Dude you need to wake up, this ain’t the 1980s! Companies pay us to promote our work today, and I can assure you we don’t need any stinking thieves to steal our work, thank you very much! 🙂

    • Anonymous

      ““[it’s] an audiovisual interactive format for music that can’t be pirated”

      Now, conventional wisdom has it that you can steal it if you can hear it — but that only goes for the isolated audio or video parts.

      A hypebot commenter — Jon Rezin — explains why the new multimedia format actually might prevent piracy:

      “It probably is a music format that integrates block chain technology into it. (Think BitCoin […]) and to play it you would need to use a player that checks it against the centralized database to make sure you own it.

      Block chain is powerful because every transaction (to buy, transfer, etc) is written into a centralized ledger (think database) and distributed to the entire worldwide network every 10 min. Every persons transactions are hard coded into all transactions that follow (like a chain).. its like a gigantic public distributed database of transactions and ownership which the public can’t read.. but the software can check against. This technology and the distributed network with updates to the entire system every 10 minutes makes the system somewhat impossible to hack. This prevents duplicating, unauthorized transfers, etc.”

      SOURCE: Jon Rezin, Hypebot, 09/20/2014

      Reply
        • Anonymous

          “Audio-Out. Audio-In. Record. Done.”

          No no, my fellow Anonymous, 🙂 you’re talking about the current formats. But this is an entirely new, interactive multimedia format, requiring a new — Apple! — multimedia player.

          Could definitely be a hit!

          Reply
          • Reality

            this is an entirely new, interactive multimedia format

            Which will be reverse engineered like all new multimedia formats always have. Even ones that spend billions of dollars on R&D for elaborate DRM schemes.

          • Anonymous

            “Which will be reverse engineered”

            Try it. We’re talking highly specific patents that are easy to protect in court — especially because part of the initiative will be hardware.

            And again — nice to know you see it as a threat. 🙂

          • GGG

            I wouldn’t be so quick to say it can’t be pirated…

            I’m certainly not rooting against you, but I think you severely underestimate the collective intellect/obession of hive-minds like reddit, 4chan, hackernews, etc when they want something, even just to prove it can be done. I mean, people hack into gov’t agencies on the reg, breaking some media code shouldn’t be too difficult…

          • Anonymous

            “I wouldn’t be so quick to say it can’t be pirated”

            I’m not saying it won’t be pirated ever. And I certainly don’t underestimate the guys you mention, and others.

            But I don’t overestimate them, or their resources, either. And the challenge they’re facing, which other commenters keep forgetting, is the hardware that will make it possible for users to integrate and enjoy several song aspects simultaneously in a new way.

            Whether consumers are willing to pay for that privilege can and will be debated — though the idea seems extremely interesting to me — but it can’t be pirated until our Chinese friends (or Google) have reverse-engineered, produced and sold the required hardware.

            So what we’re going to see is a group of pirates that’ll rip the audio or video, and a group of music/Apple fans that are willing to pay for a new, total and probably very satisfying experience.

          • GGG

            Your last paragraph is 100% correct, so really it will come down to how good that experience is (as well as what the price is, for the hardware and media) comparative to JUST the audio.

            Which, in a somewhat ironic twist, will probably mean artists will need to spend even more time/money creating visual elements that are equally, if not more, engaging as the music.

          • Anonymous

            “it will come down to how good that experience is”

            That’s for sure. And while Apple is working, companies like Oculus Rift may launch even more amazing tech. (And no, we’re not tallking 1985 VR anymore.)

            “Which, in a somewhat ironic twist, will probably mean artists will need to spend even more time/money creating visual elements that are equally, if not more, engaging as the music.”

            True. For each new color you add to the palet, you get new complications and problems. But also more fun.

            And I think it’s great if we can create an extended world of beauty, expression or weirdness around the music. It worked very well for vinyl.

      • Anonymous

        “…..to play it you would need to use a player that checks it against the centralized database to make sure you own it.”

        Sounds like a winner!

        Reply
        • jw

          Sounds like no offline listening lol

          Then again, this all some HB commenter’s speculation.

          Reply
          • Anonymous

            Offline/online is not going to be an issue in a few years.

            A decade ago people were using WAP

          • jw

            Fair point. But I think we all agree that one’s mobile device will be the primary music listening device going forward, & it presents an issue on, for instance, a long subway ride.

            Then again, maybe the city of NY will install wifi in the tunnels. But of course that presents its own security issues.

            But these are all moot points, I don’t think we’re drifting back towards DRM. That just seems really silly to me. Streaming with device-tethered offline listening is certainly where we’re going.

          • jw

            Also, it should be noted that Microsoft introduced DRM on Xbox One & had enough pushback that they totally ditched the idea before launch.

            We’re living in a post-DRM world, unless it’s the consumer who is concerned about his or her own security.

          • Anonymous

            Yeah but again, with regards to the subway thing, a decade ago I wouldn’t have thought we’d have wi-fi on a plane.

            I see your point tho, the original idea of the internet was that its decentralised so I don’t know how all this would work.

            As much as I would like to be wrong…..

      • jw

        lol.

        All devices have a digital-to-analog converter. 1’s & 0’s don’t make sounds. Once audio is converted to analog, it loses any digital protections. So, like anonymous above said, audio out -> audio in -> record -> done.

        Reply
        • Anonymous

          Until wireless takes over and I/o jacks disappear.
          Plugging the analog hole has always been the problem. They’ve been bizarrely tardy in finding a remedy.

          Reply
          • jw

            lmao. I can’t tell if you’re for real or if you’re a parody.

            Every speaker being wireless means every speaker having it’s own DAC which is a TERRIBLE idea. Like I can’t even think of a worse idea. I mean there’s like a billion reasons that will never happen.

          • Anonymous

            “Until wireless takes over and I/o jacks disappear”

            That’s just plain nonsense — again: If you can hear it, you can rip it.

            But what you can’t rip, is the new total experience Apple will offer.

            And that’s what makes this concept so interesting.

          • Anonymous

            Yes, you can hold a microphone up to the speaker and record it. You’ve always been able to do that. So what?

      • emptyfree

        So, you need to link to a server before playing your music? And that server always needs to be up 100% of the time? And you always need to be online? Just to listen to one song?

        Yeah, that sounds like fail.

        Reply
    • dude

      Except that’s not interesting at all because no one wants it… casual music consumers want stuff thats universally compatible, cheap and convenient aka pretty much the exact opposite of what Bono is proposing. Why do you think Pandora (or radio in general, for that matter) is so popular? You and I and Bono might care about album art and high-quality audio and “interactivity” whatever that means but we’re the odd men out. Most people don’t.

      Plus, whatever gets released on this new format will still be pirated, because people will rip to MP3 and share that just like they have with every single other DRM format that’s ever been invented.

      This will be DOA just like Pono and whatever other stupid methods out-of-touch rockstars are proposing to try and force people to spend more for a worse product

      Reply
      • Anonymous

        “because no one wants it”

        See… here’s the thing:

        Guys like you have always been like “no one wants to pay for digital music files, lol”, “no one wants an Apple phone, lol”, “no one wants an iPad, pads are for women, lol”, and now “no one wants a multimedia player, lol”.

        But here’s a rule of thumb: Apple can and will seduce us! We just crave new Apple products, period.

        “whatever gets released on this new format will still be pirated, because people will rip to MP3”

        Really? They will rip interactive multimedia to mp3? Care to explain how they’re gonna do that? 🙂 Please be as specific as you can.

        Reply
        • dude

          Everyone already has multimedia players; they’re called computers, tablets and smartphones. No one is gonna buy a new device *just* to play music & video because they can already do that, and much more, easily from the devices they already have and carry around with them daily. Why would you ever pay for an extra device that takes up pocket space and only does things you can already do on your smartphone? Why would Apple ever build it in the first place?

          Like 5 different people already explained how to rip audio, so Im not gonna bother with that but I will reiterate that most people want their music cheaply and conveniently, not with a bunch of “interactive” bells and whistles. If the multimedia part gets lost, people will take just the audio for free rather than pay

          Reply
          • Anonymous

            “No one is gonna buy a new device *just* to play music & video because they can already do that, and much more, easily from the devices they already have”

            No one is gonna buy the new so-called iPads. Phones and computers can do everything they can do, and better.

            “Like 5 different people already explained how to rip audio”

            Thanks I work with audio, no explanations required. What you, and others, fail to understand is that Apple wants to sell us a new, exclusive experience — that’s what they do, you know — and I think they’ll succeed.

            Again…

          • dude

            iPad filled a gap – its more portable than a full-on laptop but easier to work on than a smartphone. You’re proposing a device with less functionality than an iPod classic. That’s not a “new and exciting experience” its obsolete technology

          • Anonymous

            “You’re proposing a device with less functionality than an iPod classic”

            I’m doing nothing of the sort. The new devices will probably be iPhone 7 and next generation iPads/Macs.

    • emptyfree

      Maybe the “interactive” portion can’t be pirated (yet), but the music will be able to.

      The question is, do people want their music to be interactive? Do people WANT to spend time on their music? Or do consumers just want some sound on while they are doing something else

      Reply
  3. Anonymous

    Until these sites get charged or convicted of some wrongdoing; Visa and Mastercard have no reason to treat them differently than any other website.

    Reply
  4. FarePlay

    Another example of how far away we are from any kind of established policy for dealing with online piracy. The fact that we have high profile search engines, ad placement companies, advertisers and financial services enabling these shadow businesses, there exists a serious break in corporate responsibility endangering small business. In this case artists.

    Until, as a country, we put controls in place to regulate these kind of abuses, all but the one % are at high risk of financial ruin.

    Reply
    • Anonymous

      There is no political will to enforce copyright law. Google has paid off all the politicians.

      Reply
    • jw

      Agreed. The only dif is that you can’t google someone’s dropbox content, but that doesn’t mean people aren’t sharing all sorts of stuff through the service.

      Reply
  5. Reality

    Visa and MasterCard have nothing to do with this. I don’t know why artists and so often DMN point fingers at the wrong people. Its part of the reason no real progress has been made. These sites have a credit card processor. This processor has a contract with visa and other cc companies. If you want to point a finger then its at the billion dollar processing industry and companies like FirstData who would close the account of any potentially illegal company or high risk business. Except when those businesses generate millions of course. Visa however has nothing to do with this relationship, only the processing bank forwarding along money from their millions of companies.

    Reply
    • Fareplay

      Actually, your statement parallels what advertisers say about their companies appearing on infringing sites, we’re not responsible our ad placement guys did it. If these were high profile violence or abuse sites, you can bet visa and master card would take pre-emptive action to make sure that doesn’t happen. By simply creating written guidelines that advise their vendors/representatives as to the consequences of servicing these accounts would be a positive step in the right direction.

      Otherwise, simply saying that it is someone else’s responsibility is not corporate governance, but chaos.

      Reply
  6. Farley

    Is what Visa and MC are doing for the download lockers illegal, or legal and just socially offensive? Why did Paypal stop? Because they are nice guys, or worried about illegality? If the activity is illegal there can be legal prosecution. If legal but offensive, what would a law creating illegallity look like?

    Reply
    • FarePlay

      Eliminating Safe Harbor would go a long way in the proper identification of “violating” sites that could then be blacklisted as such.

      Reply
      • Anonymous

        “Eliminating Safe Harbor would go a long way”

        YES, YES, YES!

        Excuse me for yelling, but this is just so incredibly important!

        Reply
  7. Willis

    The topic piracy is a joke. Companies are NOT fueling piracy. People need to get real about this. Just because a company makes it possible, or even easy, for people to infringe on copyright through piracy doesn’t mean that the company is at fault. The root of the problem is the people who feel the entitlement to take as opposed to pay. This is where the focus should lie.

    Reply
    • Anonymous

      “Companies are NOT fueling piracy”

      Er, yes they are. And not only that, they’re making tons of money in the process. Just ask Google and the ISPs. Most ISPs would die tomorrow without piracy.

      Reply
      • Willis

        First things first. If people didn’t pirate/infringe on copyright, there would be nothing more to say about this topic.

        Reply
      • Jimbo Jones

        Without demand, there would be no supply. Credit card companies are doing business. They, along with ISPs, Napster, etc, take the heat for what is taking place at the hands of consumers.

        Reply
    • FarePlay

      Agreed that education plays a big part, but this is not going to be an easy sell for a country living through tough financial times. The situation is only get worse as more products and services are available online and 3D printing evolves.

      Reply
    • Dan

      If you allow your service to host copyrighted files then you are certainly fuelling privacy. This DMCA Safe Harbour is every criminal’s ‘get out of jail free’ card. If I rented a room in my house to a person who stored drugs in there and I knew about it – guess what? I’d go to jail.

      This ‘safe harbour’ nonsense has left utter cunts like Kim Dot Com stick two fingers up to every artist and every creator for years whilst robbing them blind. Every single one of these companies workers should be thrown in jail until they can prove that every single piece of their content is legal.

      Reply
  8. dubist

    This is partially what the SOPA act tried to stop. Of course Google and Wikipedia and many others heralded it as the death of internet freedom. The sad trick is that they succeeded in causing many to believe their propaganda.They also spent very large money to lobby congress to stop SOPA from passing, even though it had bipartisan support. Those with the most money have the most power and no one in DC bothers to stand up to this type of thuggery. Very sad.

    Reply
    • FarePlay

      No question that any legislation that seeks to control piracy is going to come up against substantial push back from Google’s lobbyists.

      Reply

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