Two Las Vegas Men Plead Guilty in U.S. Criminal Streaming Piracy Case | Hacker News Reader

Two Las Vegas Men Plead Guilty in U.S. Criminal Streaming Piracy Case

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77 pointstdurden114 comments

Services such as Netflix and Amazon Prime Video would be a lot more successful if only their catalogs in regions outside of the US would be comparable to their home turf.

If US clients would have the tiny tiny catalogs they offer e.g. in most of Europe, you would also be scratching your head how this could ever justify the subscription cost.

The major difference is that the EU does not behave like a unified body when it comes to purchasing the distribution rights. So Netflix negotiates with each country individually.

Unless you share it with family so more people get value out of it, it is indeed hard to justify the subscription for many people.

Edit:

> make the shows and movies available on servers in Canada

Is this a real protection against getting caught? I would have imagined Russia or the Ukraine to be better options for being outside of the reach of the FBI.

Archaic distribution rights are indeed to blame. But this still leaves most of the world in an impasse with regards to a credible legal media streaming option for film and television.

(I am a Youtube Premium and an Amazon Prime subscriber btw)

Is the price cheaper in regions where the catalog is slim?

No, there's no direct relationship: https://www.comparitech.com/blog/vpn-privacy/countries-netfl...

I just got back from vacationing in Greece and Croatia. Though I can't say whether the number of movies was higher or lower than in the states, I can say that the quality of films was much higher. Both my girlfriend and I complained multiple times that the movies we were watching in Europe were not available to us in the states.

Such movies would not be profitable in the US. Americans have no interest in those.

Of course, with digital distribution, the cost of actually making them available in the US should be extremely low, so it should still be profitable given there's a very small number of Americans who would watch them, surely more than the puny number who watch crappy old B-grade movies that are now available on YouTube. So I'm not sure why they don't bother.

Could you imagine how great these services would be if copyrighted works fell into the public domain after 28 years instead of the nearly 100 years they are now?

Sure, but in that case most current films would never have been made... or at least I got that distinct impression from MPAA.

It is in their benefit to claim that, regardless of the truth of the statement. Why would one trust a biased party such as MPAA?

I believe they were being sarcastic. No one would take the MPAA's word on something like this, they have an obvious bias.

Which films exactly took 28 years to turn a profit?

That's not the point.

Valve turned a huge profit on Portal 2. Yet they refuse to make Portal 3. Why? Because compared to Steam, Portal 2 generates a tiny ROI by comparison.

Option A: invest $1 in Steam and get $10 back

Option B: invest $1 in Portal 3 and get $2 back

which do you do?

Same goes for movie industry. A movie promises returns for decades as it is milked and re-released in various formats. If the movie can only make money for 20-ish years, ROI goes down significantly. Read: "The Disney Vault" [1]

[1] https://en.wikipedia.org/wiki/Disney_Vault

May I offer an alternative reason why Valve did not make Portal 3? It's because when you rehash the same game, people get sick of it. Sometimes a product needs to stand on it's own. Why harm the Portal franchise by being to quick to release, release, release?

Seems like hollywood is already on board with this. What do they need Ghostbusters to have a 100 year copyright on when they could just release a new Ghostbusters every 30-40 years like they're pretty much already doing.

If you don't plan on making Portal 3, don't tease Portal 3 with easter eggs like the Borealis.

Like I made mention before, just because they don't want to release it now doesn't mean they won't want to do another one in 20-30 years after technologies and ideas have had enough time to mature to put a new twist on things.

Half their fanbase will be dead in 30 years

So you're saying we'll get a reboot ;)

I always thought Portal 3 never came out because nobody at Valve wanted to work on it.

Given Hollywood accounting and the topic of piracy I would be surprised if any films made a profit since the dawn of the MPAA.

The MPAA is full of it on this one. Most investments happen with a payoff expected within a few years. In general,.investors don't care about what money they can make in 30 years.

Well, the entire movie industry doesn't even exist any more, because it was killed by the videotape, according to the MPAA. Remember, Jack Valenti of the MPAA asserted before Congress in the 1980s that videotape recorders would destroy the movie industry. So none of this should even be an issue now.

I think being not available through legal means should be a defense (something like fair-use) for any copyright infringement claim.

Unfortunately this either makes law or the notion of private property meaningless.

Do the existing fair use defenses also make those concepts meaningless?

I think the OP is only taking about media which was created for the purpose of being sold to people, and is easily copyable.

IMHO there are fundamental differences between that and something that was purchased to satisfy the needs of yourself or your close associates.

There's also a world of difference between a new paperback copy of The Fellowship of the Ring for $10, and a movie from some old company that went out of business in the '70s and whichever company bought up all the scraps never bothered to capitalize on the IP, and the movie can't be purchased (new) for any price anywhere. If it's been ten years since your media was commercially available, it should be at least temporarily public domain. If you want to assert that copyright, start selling it, then you can have exclusive access to selling it again.

It's dumb how much of 20th century history has been lost because of the march of ever dumber copyright laws.

Just yesterday I read something about the show "White Collar" and checked it out on Amazon Prime Germany. In German language it is available for free. I like to watch shows in their original language though. English costs 4€ per episode. Alright then, torrent it is.

I know it isn't quite as bad, but in the US, many European (or other foreign) are practically impossible to watch legally. Streaming services don't stream them, and dvds and blu rays are region-locked.

Your local public library system may provide you with access to Kanopy[1] which has a good catalog of European films, along with other interesting titles not found on the paid services.

1: https://www.kanopy.com/

Frankly the cost in the US isn't necessarily worth it anymore. I've been a Netflix user since 2008/2009. Back when no one took VoD seriously, the catalogue was huge. You could actually get lost trying to find something because there was so much good content. Now, with every company attempting to cash in on their own platform, choices on a single platform are very, very limited. I've also noticed that many titles are shared between Hulu, Netflix, and Amazon so the illusion of choice is really just that.

I think original titles and foreign distribution (ie getting content from not your nation) are quickly becoming the only differences. That's what cable was when I moved away.

I have, quite honestly, consumed everything I'm incredibly interested in on the majors. None of them turn out originals fast enough to keep my interest and new/returning content comes in a trickle so I've recently turned to just buying old shows I like and watching those. It's just like the nineties/aughties all over but without the hope of what was then cable cutting.

I'm in the US and currently scratching my head as to why the hell I haven't canceled my subscription years ago.

For as long as I can remember now, every Netflix experience boils down to spending 15-30 minutes looking for something remotely interesting before finally giving up and reading a book or playing a video game instead.

I'm not sure how much of the problem is them not having enough content, versus just their (at least on Android) godawful UI making it impossible to find, but the end result is the same.

So two programmers ran a streaming website bigger than Netflix from their garage?

and yet they are getting punished for it, what a world we live in, right?

The numbers don't add up.

Something is fishy about this. Netflix's infrastructure is massive, and their bandwidth usage is a big chunk of the entire internet. How could this possibly go unnoticed for any amount of time?

I'd imagine the "more subscribers than Netflix" is an inflated number

More content than any of the silos seems plausible, since all they have to do is aggregate.

More paying subscribers would be a huge.

It's just a software in front of existing torrents.

I think it is in an error in the reporting. The press release from the FBI only mentions content, not subscribers.

I actually remember JetFlix and wondering how they had so much content. They were acting like a real company, IIRC.

What if they were using something like webtorrent to reduce their bandwidth costs?

I would be super interested in a detailed breakdown of their stack, I assume something built on p2p was used, otherwise the compute, bandwidth, and storage costs would be insane.

Bandwidth at any decent metro area colo these days is cheap af. Last I did the math I saved 15x the egress Data charges versus if I just put it directly in AWS.

I guess Netflix needs their developers for all the random UI changes nobody is asking for and some "unrelated recommendations" engine.

Have you used any pirate streaming websites? They're pure garbage, bad UX, bad image quality, choppy video. The only reason anybody uses them is the price or lack of legal options

> One of the platforms reportedly had more paying subscribers than Netflix, Hulu and other popular licensed streaming platforms.

So it was’t a free service?

Popcorn Time’s UI is very easy to use, and rarely has problems.

Popcorn time is cancer for me, I always have issues where I cannot play the video anymore, the loader varies (sometimes it loads fast, sometime slow, not matter the download rate). I think these problems are probably caused by Electron / some bad JS code but still I fint it frustrating, other than that Popcorn time is a fantastic idea. But I just cannot like their UI / UX.

I find their UI pretty good and at least they work consistently, I was sometimes pirating shows I had access for free on Amazon prime due to DRM issues, a good example it's not only about pricing.

I hate DRM too I buy games and play pirated version instead

I've obviously never committed piracy - but most of the websites I've been on are better than Hulu or many of the other streaming services because they're focused on user features and not what a product manager thinks is pretty and "modern".

I know you’re referring to websites but Plex is a pretty damn good offering these days. I recommend everyone check it out.

You must be using some awful services because my experience has been that piracy, and pirate streaming services, are better, easier, and more available than ever

You had noticed that too? I have it on my APple TV, my "smart" TV, Android and iOS/iPad OS. I am baffled by the constant updates to it.

I literally cannot work out why they need to "update" it once a week (at least!). Since its inception, it has let you add films to a list, remove them from the list, browse said list, and watch a film and scrub/seek. What else is there that possibly needs "updating" every single week???

Agreed. And what frustrates me to no-end is that they constantly move the last thing I watched away from a single click when I return to the app.

Yes it's as if they've never heard about anyone falling asleep while watching a film.

It’s to “trick” people into thinking there is more content than there is, by having to scroll through it. I don’t know why they think people won’t wise up to the ruse after some point.

I opted to cancel rather than be inconvenienced.

Does Netflix still have the “keep test”? If so, this might be why all the constant changes. If you’re not providing as much value as the next dev, you lose that well paying gig.

They were just running streaming software in front of existing torrent and NZB content. That's why they could scale relatively easy and why they were caught.

The cynic in me would say they did not spend half their time building resumé-ware. But the numbers are probably totally wrong.

To be fair, it was a really big garage.

The article has been updated to reflect that they had more content not more subscribers.

> “Polo pitched his service to potential clients by pointing out that it offered more content than competing legal services such as Netflix, Hulu, Vudu, and Amazon Prime.”

Total revenue was less than a couple million dollars.

> Total revenue was less than a couple million dollars.

I think you mean that the revenue of a 2 guy company was over a million dollars.

> > Total revenue was less than a couple million dollars.

> I think you mean that the revenue of a 2 guy company was _over a million dollars_.

No. It is meant as a comparison with Netflix which has a revenue of 15.79 billion dollars.

"They have more content, but make less money," works, but "they have more content, but make _over a million dollars_," doesn't work as well.

This might be a naive question but, why is the FBI the office in charge of enforcing copyright? Especially when it comes to entertainment. Why do we get an FBI warning on a cartoon's dvd?

I believe it's because it's an inter-state crime. Once crimes cross state borders you have to get the federal level police involved, which is the FBI.

Ah Goodfellas :-)

The Congress shall have Power ... To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;

As such, state courts and police forces have no jurisdiction over copyright issues; they must be handled by the federal courts and police force (the FBI).

(Text from https://www.archives.gov/founding-docs/constitution-transcri... )

Why didn't FBI get involved against Napster?

I assume it's because Napster was the first to really take file-sharing global and at such an accessible scale. And maybe the laws and enforcement procedures hadn't really caught up. But keep in mind, that Napsters defense was that they were just acting as an intermediary, they never actively distributed and held the content unlike our heroes at JetFlix.

Who else is going to do it? Your local municipal cops?

The person you’re “stealing” from?

You want to give them the power to subpoena, the power to issue search warrants, and while we're at it, the power of pit and gallows?

Or are you trying to make copyright of consumer media unenforcible?

This isn't Billy downloading a movie. (Which is not a criminal offense.) This is two chaps running what is essentially a counterfitting ring. This is a problem for police to solve, not a civil issue.

Did I say any of that? No. I said they should sue them themselves. Use the discovery process like anyone else can.

Think of the FBI as the police for the federal government. Roughly, as soon as your typical crime goes across state lines, they can get involved (because a state's jurisdiction ends at their borders).

Incorrect. They are a federal investigative agency with arrest powers. They are NOT charged with standard policing type roles.

The US does not have a federal police force.

Its like in the beginning of torrenting. Nobody willing to offer a service for everyone, for a fair price. Everybody gatekeeping selling only their stuff. And if you want everything pay this atrocious sum of money.

I tell you this will happen more often and people are willing to pay. But not pay for everything. Good thing they had going. Well it was still illegal, but hey it will happen again i tell you.

Streaming is a service question. Netflix/D+/AMZN offers you a limited catalogue for 10$ or so a month. You select a movie from their website and it starts playing on your phone or computer.

Pirates offer you everything for free. You select a movie from their website and it starts playing on your phone or computer.

Why would any customer pick the more expensive product? Netflix and Friends need to offer a better service and experience at a low price. Notably that will have to include one subscription for everything.

Steam from Valve has been extremely successfull because they offer a very good service for fairly good prices. Now that EGS is trying to bleed customers, video game piracy is going up again because nobody likes exclusives except those that get money for them.

Netflix and Steam don't have a lot in common outside of being a platform for their respective media

Netflix and Stadia (or something like Xbox game pass) are more comparable in my opinion

It's not a direct comparison on purpose. Steam offers a service for relatively low cost and a fairly good user experience. Pirates have difficulties providing the same.

Netflix has a much lower bar on providing that service.

I don't think Stadia has much options for pirates.

Why would any customer pick the more expensive product? 1) they don't want to be criminals 2) they want to support the art that they enjoy so that more of it can be made

Since piracy isn't quite the most uncommon criminal activity, I supposed people only care weak about those two and I would bet most people care more about 2 than 1 because people don't see it as criminal activity.

> Now that EGS is trying to bleed customers, video game piracy is going up again because nobody likes exclusives except those that get money for them.

Big fat citation needed on the piracy numbers there...

I honestly don't mind timed exclusives because they provide stability and income to the studios that make the games I like. While there's a lot to criticize Epic for, the fact that they essentially guarantee a certain number of sales means devs like Coffee Stain studios can make a risky bet like Satisfactory (basically a 3D Factorio).

As a consumer, it's really not material to me whether I'm launching one or two stores, whereas these studios can be freed from the worry of boom/bust cycles, layoffs, etc.

When torrenting was more of a common thing, you literally couldn't legally pay to stream or download like anything. Heck, you could barely even find DVDs of a lot of content or they'd be available like a year after the shows aired or movies were released.

Now, it's way easier than ever to be able to do it all legally and quickly, and it's not even that expensive. If you want to watch old seasons of a show sure it's a hassle to sign up and then cancel a subscription to a specific network, but it's not that hard and it's like $6-$15/mo with no contracts. It used to be that a DVD box sets were like $30+ for one show.

One thing that might have happened to me earlier this year is I had a use case come up where I could not access my paid subscription service in the environment where I needed/wanted it most.

The (this is imaginary and made up for legal reasons) use case was I was in a limited network environment, trying to watch game of thrones when I paid for an HBO subscription. The HBO subscription offered my access through the app on my phone, but only streaming it, and with a horribly designed buffering system. It would only buffer a small portion after the current part of the video, so basically, and I could not download it to my phone through their app, so it was impossible to watch game of thrones when I wanted on release date and risk possibly running into spoilers the next day.

I would have had to resort to downloading it illegally over torrent because the subscription systems "say they solve your problems" and offer a completely legal way to watch your episodes, but miss the use cases for the small few of people who want to watch in limited internet situations. I am not a common user, I am power user, and I have not just had this type of situation happen once.

So my question now is, why even pay for the subscription service when it doesn't work when I need it most?

Why would you do this from within the US? The mind boggles.

Because the current streaming service landscape is kind of awful?

Well, TFA says:

> "Specifically, Polo used sophisticated computer programming to [get pirated stuff] and then make the shows and movies available on servers in Canada," officials said.

So the fact that they were in the US is irrelevant.

But I'm sure that they got caught because they didn't know how to stay anonymous. Or were too lazy. Or got too greedy.

I mean, there are far better hosting alternatives than Canada. I guess that they wanted low latency for US customers. But still, they should have isolated themselves from the damn servers.

I'm guessing that it was their payment setup that got them pwned.

I disagree on irrelevant. The fact that they stayed in the US definitely makes it harder to be anonymous (friends, relatives, language, police presence, etc)... it also makes it easier to be caught.

There's no way to know what happened in their case.

But I suspect that it was a "loose lips" thing. Exacerbated, probably, by developing the project gradually. Being sloppy at first, because it was just playing around. Also bragging, and living large. That's a common set of fails. It played a major role in DPR's takedown. Also Sabu, who had been indiscreet on IRC, years before. And Artem Vaulin of KickassTorrents, who registered a key domain in his own name.

There's also the difficulty of accepting and accessing money anonymously. The Sheep Marketplace founder pwned himself when he cashed out. It's very hard to route around KYC law. The safest bet is collecting payments as Bitcon, Monero, etc And leaving everything except operating expenses in cryptocurrency, until it's time to expatriate to a safe jurisdiction, and cash out some of that good wealth.

It also seems like when you start working with money, you cross into a whole different level of having a bad day by the Feds. If they had run something that had been ad based, they might have been able to stay off the FBI's shitlist. But when you have subscribers, and bank accounts and money transfers you are raising the governments ire.

It's cable TV all over again. The current streaming scene is not any better at all.

My mind is blown that these sites were actually getting paid subscribers. I thought the beauty of piracy is the whole "not paying for it" thing.

I refuse to pay for more than one subscription service, I'm not going to end up paying more than I did for cable tv. Hulu still wins for me because it has the live/local tv, and I'm not giving Disney anymore money.

The beauty of piracy is that you can watch/listen to what you want to, how you want to, when you want to. People are more than happy to pay reasonable prices for content, so long as they can use it how they want; see: Spotify.

I'd pay $50/mo for a streaming service that had a significant number of movies and television shows that I want to watch. As it stands, I still need to pirate movies because they are not available on stream services, or they are only available for "purchase" at like $14-17 when I know for a fact that the same movies are sitting in the Walmart DVD bin for $5.

You're correct of course, because I have consistently paid for services when they have stuff I wanted at reasonable prices. It's worth it just to relieve myself from the hassle of downloading and filling up my hard drive with stuff. The entire King of the Hill can fill up a HD.

It's just been my experience that these 'popcorn time' services are janky and law enforcement magnets, it's surprising anyone would pay for it. But I suppose I live somewhere that doesn't have as many roadblocks as some places.

Disney owns Hulu [1] :(.

[1]https://www.cnn.com/2019/05/14/media/disney-buys-comcast-hul...

Oh that sucks, thanks for the heads up. I wonder if this means Hulu will be getting phased out? I'm definitely not in love with it, it has some really awful original programming, but it gets the Orville and King of the Hill.

Doesn't Disney own Hulu now?

Except I can cancel anytime, pay for just a month, watch whenever I want, watch however I want.

I think people are getting spoiled by getting what they asked for. People have been asking for a-la-carte cable for years (instead of the massively expensive bundle deals where you only want N channels out of 2000), and that's basically what all these competing streaming networks have become.

No doubt they weren't cryptography and security nerds. I wonder how a team with great operational security would have done.

I bet that it's possible with a dedicated team with good clean opsec and intelligently placed servers it'd be possible to fly under the radar for decades.

I'm surprised some foreign power hasn't done this just for the sole reason of messing with the US movie industry, which is one of America's more significant export industries, and thereby harming the American economy.

Article should be replaced with this one[1], which is much more informative.

Most notably, the headline of the linked article is ridiculously incorrect. The statement of facts states that they only processed 0.018M credit/debit card transactions over roughly the 2014-2016 period[2]. I would be extremely surprised if it reached Netflix's 152M of worldwide paid memberships for streaming in 2019[3][4].

[1] https://torrentfreak.com/two-las-vegas-men-plead-guilty-in-u...

[2] https://torrentfreak.com/images/polosof.pdf#page=1&search=%2...

[3] https://s22.q4cdn.com/959853165/files/doc_financials/quarter...

[4] https://s22.q4cdn.com/959853165/files/doc_financials/quarter...

There is no way they had more paying subscribers than Netflix. Netflix has 160 million paying customers. These two guys had "more" and made only 1 million dollars total. What?

Probably their total pageviews vs Netflix's total paying customers or something dumb like that.

Or law enforcement trumping up a number that’s larger than any reasonable number of subscribers they actually had.

Not to mention the infrastructure, even if they didn’t host the video content themselves (which I doubt?) just handling that many paying customers would be a major operation.

didn’t host the video content themselves

I guess you could host the most popular stuff, plus the first five minutes of everything Netflix and other streamers have, and then just redirect the rest of those streams...

I think it was a typo, later in the article they mention this service had more content than Netflix, Hulu etc. I share your scepticism that two individuals could build a streaming service catering to >160m customers.

The DOJ presser said the site was "larger" than Netflix, Hulu and Amazon combined in terms of available content - some media reports have misreported it as larger by subscriber count

Thanks, that makes sense. The HN title should probably be corrected then, at mods' convenience.

Yeah the title is definitely misguided.

That goes without saying, content providers are shooting themselves in the foot with an atomic shotgun with the current fragmentation and lots of content is not legally available anywhere.

A tragedy of the commons among the content providers -- exclusive content is an edge that they can't resist individually, but damages them collectively.

I don't think "tragedy of the commons" is the appropriate term for what's going on here. These movies aren't a "commons", they're all privately owned by a bunch of different private entities. They used to license them to Netflix to be streamed, but now they've pulled back from that a lot so they can operate their own streaming services.

"Tragedy of the commons" is when a bunch of private interests use a publicly-owned resource in a greedy way and end up ruining it for everyone. I don't think this quite applies here, but I don't know of any other term to call it because I can't think of any non-internet analogies.

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