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Comment by michaelteter | Hacker News Reader

> It is estimated that the amount of financial damages suffered annually from the illegal service is a massive €10 billion ($10.5B).

I suspect that the actual damages would be (much) lower, as some of the people using this service would not or could not have paid for the official source. This is the same fallacy or intentional misrepresentation that the music industry used in the Napster days.

As we know, if the pricing is reasonable for the market, and more importantly the content is actually _available!_ in that market, people will pay to stream it.

A lot of the time, the content is unavailable in many markets; so users will have to choose between illegal or nothing. If the content is available to stream legally, and its price is too high for the region, then people wouldn't have paid for it no matter what. Thus, the revenue was not lost; the market was simply never captured.

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One thing you might be overlooking is that there are often substitutes for the pirated products.

For example back when Photoshop was several hundred dollars a lot of people who could not afford that pirated it to do home and hobbyist photo editing. If Photoshop had not been able to be pirated those people would not have bought it, so that piracy did indeed not reduce Adobe's income.

However there were also programs such as Pixelmator that were more than an order of magnitude cheaper than Photoshop and could do everything those people were using Photoshop for. If Photoshop could not be pirated some of those people would have bought those other programs.

If someone pirates Photoshop, Pixelmator should be suing? Honestly, I'm surprised they don't try and add that into the super believable damages.

They were simply describing the impact of relative costs on substitute goods.

https://en.wikipedia.org/wiki/Substitute_good

If people weren't watching movies, they maybe would be watching people in theaters, which is a plus for me though unlikely.

I am a performer whose work is done live anyway, but people have to take out time in the day to visit and play.

>If people weren't watching movies, they maybe would be watching people in theaters, which is a plus for me though unlikely.

If movies somehow suddenly became magically unavailable in society, I think it's a certainty that people would be watching live theater like 100+ years ago.

However, the total amount of viewing would be far, far less. People today spend lots of their free time watching movies and TV shows (many of which, these days, are better thought of as multi-volume movies). Take all that away somehow, and people will go back to the really old days before the invention of cinemas, where they occasionally watched a (live) show/play at a theater, but it was certainly not a frequent activity, maybe (guessing) once a week at the very best if they were middle-class or higher, certainly not every night, and probably more like monthly.

So the total amount of economic activity that would be generated by this magical elimination of TV/movies, resulting in better careers for stage actors, musicians (assuming the Great Movie Disappearance also magically eliminated recorded music from plays), and playhouse owners would be dwarfed, I think, by the huge loss of economic activity from all the people in the various businesses of movie/TV entertainment. I could be wrong though, but considering Hollywood entertainment and TV is a huge economic driver in the US today (despite piracy), and playhouses and plays were not a huge economic force in the US in the late 1800s, I think my assumptions are correct.

>One thing you might be overlooking is that there are often substitutes for the pirated products.

This works for software tools, but it doesn't work for movies or other artistic works. For example, personally, I'm a firm believer that no one should pirate Windows: if you can't afford it, then you have lots of free options available (namely, countless Linux distros). Same goes for Photoshop: if you can't afford it (or don't want to), there's free alternatives like Krita. These software programs are just tools to accomplish a task; if you can't get access to one, you can likely find something else to do the same thing.

You can't make this argument for watching a movie, though. You can't substitute some crap movie like Gigli or The Room for the experience of a cinematic masterpiece like 2001: A Space Odyssey or Lawrence of Arabia. It's like comparing some 4-year-old's crayon drawing to a painting by one of the masters.

I know plenty of people who manage to substitute some random crap for great movies; they just want something that will pass a few hours, they don't care about having their minds blown.

There is only one Photoshop, just like there is only one 2001: A Space Odyssey.

There are lots of other tools, some of which are free, much like there are lots of other forms of culture and entertainment. Absolute masterpieces come into the public domain every year, and become free for a new generation of people to enjoy.

Why are public domain forms of culture and entertainment insufficient? The list of classics in the public domain vastly outnumbers the list of contemporary classics.

FWIW, I disagree entirely. Copyright infringement is a natural consequence of free market dynamics and the marginal costs of replication of IP being near zero, just like spillage and theft is a natural consequence of physical stores. It’s part of the cost of doing business.

> You can't make this argument for watching a movie, though. You can't substitute some crap movie like Gigli or The Room for the experience of a cinematic masterpiece like 2001: A Space Odyssey or Lawrence of Arabia. It's like comparing some 4-year-old's crayon drawing to a painting by one of the masters.

You can't substitute mspaint for photoshop either, what a weird take.

And you can substitute any capeshit movie for any other capeshit movie since they're all the same.

Your analogy makes no sense.

> “You can't make this argument for watching a movie, though.”

HA! And yet my local library makes this argument all the time.

Context, I had a discussion with the media buyer at my local library about how many DVDs they were de-acquisitioning, and how meager were their new purchases of movies and series. Of course I was referring to A-list material. The library has a contracted online streaming service and the librarian offered this service as equivalent. It’s not. It’s not the Criterion Collection. It’s the equivalent of carob substituted for chocolate.

Whatever you think about DVDs compared to streaming, I like going to my local library. And other libraries in my system have much better collections. It’s just poor management (I’m sure I won’t convince many others who have already committed to going streaming or don’t like their public library. So I’ll just say this, they routinely buy ‘altered to fit your television’ copies of action films. Uggg)

>For example back when Photoshop was several hundred dollars...

>However there were also programs such as Pixelmator...

Photoshop is way older than Pixelmator. In the 90's I would use Paint Shop Pro also known as PSP. People still pirated that - including me - because we were kids with no income just looking to mess with cool computer stuff.

Though honestly, it's in Adobe's best interest to turn a blind eye to individual piracy as it keeps their products the incumbent. Little johnny pirating Photoshop to edit his class photos is of no loss to Adobe. Instead, when johnny is old enough to make a living editing images Johnny will likely reach for Photoshop, this time with an open wallet. So piracy is really the ultimate trial version of software. Of course you have to make a show and lynch a few people in public to keep them fearful just enough to ensure most people pay to play. So you get the stories of some granny or 12yo hung out to dry for piracy.

Keep in mind that this bust was a paid subscription service. That’s how they were netting €250 million per month.

The hypothetical damages amount is moot. They were charging a specific amount of money and people were paying it. That amount was high enough that you can completely ignore any inflated estimates and they were still doing a huge amount of criminal business.

Those numbers are clearly false at a glance. Here is somebody who bothered to look into it: https://news.ycombinator.com/item?id=42292435

There's no way that they were netting 250MM EUR per month. Just think of that number. That's 3 BILLION EUR per year!

Putting that into perspective, Gitlab is on track to do around just 580MM USD this year and is valued at 8 billion dollars in market cap.

Something tells me that their revenue isn't is 10% of Netflix.

The Gitlab comparison makes it sound more realistic to me. Nobody pays for a subscription to Gitlab, 99% of humanity doesn't know what git is and it is quite plausible that of the remainder 99% don't pay for Gitlab.

Compare that to streaming where at least >20% of the population know what it is and >20% of that seem to pay for streaming as a service. Much bigger market, and being a pirate site seems like it'd give them and an edge in the market because their catalogue would be better than any legal operation.

Obviously a lot of factors are at play for SaaS pricing but that would mean it would be worth at least around 50 billion USD in market cap if it were a legitimate business. Seems highly unlikely.

What would make that unlikely? Sounds like a pretty reasonable valuation. Netflix is $400 Billion USD for ~300 million subscribers and is likely an inferior product to a pirate streaming site (otherwise, obviously, the pirate subscribers would go with Netflix). $50 billion for ~20 million users seems ballpark plausible.

Note that black markets exist because there is enugh demand for a product that it overwhelms the ability of the army/police to enforce the law. This site is obviously going to be doing something economically popular. If it wasn't making a killing, ol' mate running the place would go find some other career.

To me, it seems unlikely that a singular, blatantly illegal service that is > 10% as popular as Netflix would go unnoticed by the legal authorities.

And given the comments below indicating that it was a mistranslation, it's a moot point- it was wrong after all.

Moreover they found only 1.6M in cryptocurrency, which would be the income they get in 5 hours

No chance they were making 250M and were able to stash it away so neatly and so fast that they found so little money

Yeah but some of these services still offer something that official alternatives do not.

I used to support an apartment building with a lot of residents from India. They all had IPTV boxes with some pirate channel for accessing some in demand cricket comp, and the support requests would all coincide with the streams. And in general they got lots of other local content outside the region locking. Mostly keeping up with India. They got the content for free in india, but paid a small fee to access it remotely, not caring who provided it. They all seemed to believe there was no financially reasonable alternative way to access the content and we never really bothered them about it as its not the carriers job to police IMHO.

Likewise I see tons of yanks complaining about Disney+ not carrying Alien Romulus, when outside of the US its on the app. All self imposed considering Disney owns a large amount of Hulu but is beefing with the remaining shareholders IIRC.

Plainly nonsense region locking seems to be driving piracy. And if someones making 250 million per month circumventing it then it sort of implies the solution doesnt it?

>Likewise I see tons of yanks complaining about Disney+ not carrying Alien Romulus, when outside of the US its on the app. All self imposed considering Disney owns a large amount of Hulu but is beefing with the remaining shareholders IIRC.

That's odd. Disney+ (with ads) is $10/mo on its own. $11/mo for the bundle of D+/Hulu (with ads). Alien: Romulus is on Hulu right now.

> some of the people using this service would not or could not have paid for the official source

If there is demand there would be local distributors who could want a licensing deal and get a cut. There are a bunch of them often in almost every country. Now those distributors see that it would cost them X to license with you but they would make zilch because everybody pirates it anyway.

Now calculate what you lost...

Like if you post art but somebody rips it off and sells something based on it and makes a million. Assume his lawyer says 0% of his buyers would join your patreon. Maybe you don't even have a patreon. But imagine some legit company could suggest a 2 million deal to license your stuff for say toy manufacturing or branding or whatever (like mofu_sand). But they see your stuff pirated all over already and do the math. This is what you lose.

Is the strength of the claim reduced if the damages are exaggerated? Or would (could) the judge simply say "yeah you're right, but you're wildly wrong on your actual damages -- redo and show your work, not counting people who never would have paid you"

Courts do frequently require accurate costings. If a team continually exagerates damages, then the case can get thrown out. However, it is generally left to the judge to choose how egregious it is (if there is proof of intent rather than negotiation).

"Fraudulent exaggeration" may even be punished, depending on the court. (More often seen in civil circles - see insurance.)

> as some of the people using this service would not or could not have paid for the official source.

But what are the actual numbers though? I have friends who are all well off and have no qualm paying subscriptions to illegal streaming sites because "I'm not paying that much for streaming TV."

There was a study a long time back which showed that users are (approx) * 1/3rd "Pay Never, hardcore pirate." * 1/3rd "Not invested either way." * 1/3rd "Could be a legal subscriber."

Users of what, I wonder?

That said, I've no idea where the numbers come from, but it covers some of the possibilities.

I'm usually mixed. I pay for access to some things. I download copies of some things without paying for them. Some of the latter category are things I just want to check out (software that doesn't offer a demo/that I might mess around with once). Some are things I ostensibly pay for already (ex: movies or shows I get as part of an Amazon Prime subscription but are now frequently interrupted by advertisements). Occasionally I'm just lazy, I'll admit. Sometimes it's just quicker to torrent a movie than to hunt down the best/only place to rent it.

The one thing I won't do is pay (actual) pirates like these for access. I figure it's on me if I watch a movie I didn't pay to rent/stream/whatever. But I'm not supporting god-knows-what sketchy organization with actual money. When I spend money it'll be going to the legit rights owner.

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