Analysis: Megaupload shutdown unlikely to deter piracy

Wed Jan 25, 2012 2:15pm EST
 
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By Joseph Menn and Sarah McBride

SAN FRANCISCO (Reuters) - The crackdown on file-sharing site Megaupload is expected to do little to reduce overall piracy of music, software and Hollywood movies, while potentially stifling emerging means of distributing content online.

In the wake of last week's surprising indictment of the digital storage company and seven executives, other companies have begun changing their policies even as Megaupload officers maintained their innocence in a first court appearance in New Zealand.

Filesonic.com stopped allowing people to download files that they had not uploaded themselves, while Uploaded.to blocked access from Internet locations in the United States.

However, just 3 percent of U.S. Internet users relied on digital lockers like Megaupload in the third quarter, according to NPD market research, compared with 9 percent who used peer-to-peer networks, which allow sharing of files among consumers' computers with little or no central organization.

Peer-to-peer systems, including BitTorrent and PirateBay, might gain more activity after the Megaupload charges, analysts said, while users may be afraid to upload content to lockers for fear they will lose access in a similar shutdown.

"I don't think you'll see more file sharers per se, but the amount downloaded over the torrents might rise," said NPD's Russ Crupnick.

But the Recording Industry Association of America and the Motion Picture Association of America said at least some users would balk at the higher complexity of peer-to-peer sites.

Lockers are "more user friendly. I doubt there will be a wholesale shift" to torrents, said MPAA Senior Vice President Kevin Suh.   Continued...