Institutionalized piracy in Russia – Russia’s Facebook (vKontakte) sued by music labels

Posted: April 6th, 2014 under music. Tags: , , , , ,

Russian ISPs openly brag about how much pirated content they have – it’s their market differentiator

Years ago, working in Russia, back when the whole “Content Pirates” project was just the mere glimmering of an instinct, I was talking with the local techies about how the web works in Russia. At the time, we were trying to implement an internet-centric business model for a publishing company, and were coming up against massive cultural differences in how to make money off of content.

Pavel Durov's profile on vKontakte

This profile for vKontakte founder Pavel Durov is particularly ironic, since he just bailed out of the company, citing intense pressure from Kremlin-backed investors. The site has 143 million users worldwide, 88 million in Russia. They generate about $170 million a year in revenues, mostly from advertising. And the site is rife with pirated works.

An Amazon-like online store would not work, we were told, because there were no reliable delivery services in all of Russia. The UPS guys had gotten pretty far, although their “What can brown do for you?” campaign, when translated literally into Russian, caused the locals to collapse in helpless laughter, and I still don’t quite understand why. DHL figured they could do better, and invested heavily in the late ‘Noughts. Right up to the point of buying a huge warehouse on the outskirts of Moscow to use as their distribution hub, at which point some Russian Mafia types showed up at their offices to tell them that, much to DHL’s surprise, they didn’t own the building. The Russian Mafia did. And they wanted money. Or else.

Parse that one however you will, but in the end, DHL folded up its tents and left Russia (although not before becoming one of the biggest inadvertent heroin dealers).

Update: Apparently, they’ve come back for more, although they’re still bitching, and using the code word “infrastructure” and suspending all shipments to Russia because of customs regulations (READ: the customs agents are looting the packages, although Russians there report that “Fedex breaks your packages, UPS loses then, and Airborne Express/DHL sells them to the Russian Mafia.”)

Meanwhile, the existing Russian mail system is absurdly corrupt and venal. One girl related how she tried to ship her brother, suffering through his military service somewhere out in the wilds of Siberia, some smoked fish. Not a stack of cash. Not an expensive camera, or laptop or even a printer cartridge. Just a box of smoked fish, sealed in plastic baggies.

By the time the box arrived, it showed signs of having been ripped open, childishly re-sealed with thick clumsy tape, and then ripped open again. The fish had been replaced with moldy rice, and then that rice had apparently been (mostly) replaced with dirt.

It’s in that kind of lawless atmosphere that Russian ISPs compete. Companies like Beeline, Yota, Uralsvyazinform, Relcom, Peterstar (many of which have since been swallowed up by the giant Russian ISP, Megafon) openly advertised that they had the most, the best, the latest in pirated content available on their local servers.

“Sign up for BorisNet! We have 11TB of Hollywood movies, music and cracked games! Stored locally here at our headquarters in Moscow, so the download speeds are faster than BitTorrent!”

So pardon me if I’m a little cynical about whether this lawsuit, filed by major music labels against vKontakte is going to do any good.

Relevant quotes:

“For the music industry to grow and prosper, it needs digital partners that are licensed, that respect copyright, and which pay artists and producers for their work and investment,” said IFPI CEO Frances Moore. “VK’s music service, unlike others in Russia, is an unlicensed file-sharing service that is designed for copyright infringement on a large scale.”

(snip)

“This site’s business model appears to include enabling the unauthorized reproduction and distribution, including streaming, of music and other content through the site and associated software applications,” the report notes.

“Russia remains a pirate nation from the perspective of most copyright holders,” patent and IP lawyer Raymond Van Dyke told the E-Commerce Times. “By many measures, music, films and software runs around 80 percent infringement — likely more, despite preventive efforts by the Russian government.”

Whereas websites in the United States have “vigorous takedown protocols,” however, “vKontakte’s retort that works must first be proven pirated rings hollow,” Van Dyke added. “As the Supreme Court held in the Grokster case, a service provider cannot have a ‘see no evil, hear no evil’ approach regarding content on your site.”

Yet while “rampant copyists” such as Napster and Grokster were shut down in the U.S., “the Russian authorities will not or cannot take action,” he pointed out.

Check out what appears under the “Music News” group on the site. At first, it looks OK, right? A couple of embedded videos, some announcements of what famous artists are doing. But then, just a little further down, and – what’s this?  Christina Aguilera’s music. Available to play over the internet, or to download directly.

The latest news seems to be that while the (surviving) local, small ISPs still get a competitive advantage from touting the sheer volume of pirated works on their local servers, the big guys have now deferred to the giant Yandex (the Russian Google) and its product, YandexDisk – a version of DropBox/Google Drive for all their pirate-related needs. There are even videos on YouTube showing how to download files from Yandex (i.e. a how-to guide for wannabe pirates).

The video even says “Free Rock and Metal” on one of the tabs that the guy is downloading.

 

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