Shockwaves in Spanish cyberspace
The FBI operation against file-sharing site Megaupload is being felt throughout the web
A wave of panic is spreading like wildfire through cyberspace after the US government last week shut down Megaupload, one of the world's largest file-sharing sites. A number of arrests have been made of those involved with the site - including its founder, German-born Kim Dotcom - on charges of racketeering, money laundering and online piracy.
The shockwaves are also being felt in Spain. According to one Spanish blogger, the storage site Zshare has deleted 3,000 files that he had hosted there. It would seem that webpages related to file sharing are either shutting down altogether, or eliminating paying out cash incentives for users who upload the most popular videos.
The website Cinetux.org is accusing the FBI of intimidation, and is talking about colleagues who are "mass deleting" files from their servers. Uploaded.to has blocked access to users from the United States, while Fileserve has canceled its reward program. Filesonic has gone even further, preventing files from being shared with third parties. From now on, only the user who uploaded the content may access it.
Rapidshare, another storage giant, is one of the few sites whose managers appear to be relatively calm. It has publicly announced that what it has to offer is different, and not just because the Swiss firm boasts of accounting transparency. Rapidshare has never offered cash incentives to users.
But the purge continues elsewhere. VideoBB, VideoZer and FileServe have deleted enormous amounts of material, and the elimination of files on servers is directly affecting sites that specialize in providing links to them.
Seriesyonkis, a Spanish portal offering links to TV series and movies, once directed up to 90 percent of its links to the Megaupload site. Recently that proportion was closer to 60 percent, and since last week, it has been zero. The dearth of available material was palpable this week. There were several links to The Twilight Saga: Breaking Dawn (Part 1) but a click soon revealed that the hosting sites, Allmyvideos.net and Downupload, had replaced the file with a sign saying it had been deleted "for infringing copyright."
Meanwhile, the loose "hacktivist" collective known as Anonymous is waging a campaign against companies and institutions it identifies with the intellectual property rights battle. One of their targets is Sony. Anonymous has published an alphabetical and chronological list of existing links on peer-to-peer networks of the entire discography of many Sony artists, as well as 10 years' worth of Sony-produced movies.
At sites offering legal access to copyrighted content, the situation is viewed differently. Juan Carlos Tous, of film and TV streaming site Filmin, says that ever since Megaupload was taken down, his own webpage has been receiving three times as many visits and has quadrupled the number of videos streamed. In fact, Filmin reacted to news of the Megaupload case with a promotional offer. Tous does not believe that everything will be solved through this closure, but he is convinced that the alternative is decent content at the right price.
Alex Martínez Roig, content director for the pay-TV service Canal+ (owned by PRISA, the parent company of EL PAÍS), says that Canal+ Yomvi has "built a selection of premium services aimed at all users. We are positioning ourselves as a legal download site for quality content, at competitive prices, and we want to be a real alternative to piracy."
Octavio Dapena, of Filmotech, a pay website offering a catalog of Spanish and Latin American movies, feels that closing in on sites that host illegal content will create the opportunity to build a market that is currently inviable, given the criminal competition. But he does not think that there will be a sudden, dramatic improvement. "This is a warning. People who move in these circles have seen what they are exposing themselves to," he says. Dapena underscores the complex architecture underlying an illegal business that shares out the tasks among sites that offer the links and those that host the files, "in detriment of the content industry."
According to Alexa, a leading web metrics company, French surfers represented 10 percent of Megaupload's traffic, followed by users from Brazil (eight percent) and the United States (7.3 percent). Spain ranked fourth, with 7.2 percent of its traffic.
"Spain is effectively a dead market"
As far as the recording industry is concerned, Spain continues to be "a cultural desert," according to the International Federation of Phonographic Industries (IFPI).
On Monday, three executives from IFPI, Sony Music Entertainment International and Universal Music Group presented a report on the state of the global digital music industry showing positive overall figures, but pointing at Spain as a weak link.
"We are aware of the government's commitment, but the only thing it has done with the new legislation is to close one door while leaving another one open," said IFPI CEO Frances Moore.
"Three years ago I described the Spanish market as a cultural desert; unfortunately during this time not much has happened," added Rob Wells, president of Universal's digital business division. "Spain, which should be the powerhouse of repertoire for Latin America and the US Latin market, is effectively a dead market."
Despite these concerns, global digital music revenues were up eight percent to $5.2 billion in 2011, a faster pace than in 2010, the report shows. As Wells put it: "We have really only scratched the surface of digital music in the last decade - now we are starting the real mining, and on a global scale."
While congratulating itself on the progress made against piracy worldwide, the report pointed out that "in Spain a new law came into force to allow the blocking of illegal websites - a positive step, though disappointingly limited in its scope."
The legislation in question is the so-called Sinde Law, named after former Culture Minister Ángeles González-Sinde, who pushed for its approval despite widespread opposition from internet associations. The Socialist government eventually left office without giving this piece of legislation the final push, something that was left to the new center-right Popular Party government, which has pledged that the Sinde law will enter into force in March of this year.
As IFPI explains, "the legislation contains provisions that, in the absence of voluntary compliance by the website owner, require ISPs to block access to websites, blogs and forums that provide links to copyright infringing content. This takes place through an expedited administrative procedure combined with prior authorization by the courts."
IFPI has been chaired since July 2011 by the Spanish opera singer and director Plácido Domingo, who is quoted in the report as saying that "governments and legislation have an essential role to play. I only have to look at my native Spain - where piracy has had a terrible effect on everyone's royalties and the labels' investment in artists - to see the extent of the challenges we face."
Meanwhile, figures released last week by Promusicae, Spain's recording industry association, show that sales fell 10.7 percent last year compared with 2010. This figure is partly offset by the strong performance of the digital market, which already represents 31 percent of the business.
A Nielsen study says that 42 percent of Spanish internet users visit at least one website offering illegal content each month. The European average is barely 27 percent.
"In some countries, the rate of usage of illegal sites is far higher than the global average - for example 42 percent and 44 percent, respectively, in the major markets of Spain and Brazil," reads the IFPI report.
"Spain has just approved illegal web-blocking legislation, but it needs to do more," Moore insisted time and again. "It is not too late."
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