Copyright

Popcorn Time’s Video Streaming Has It All, but Is It Legal?

Popcorn Time

Popcorn Time, a relatively new online movie streaming service, is one of the most interesting stories in the tech sector.  The service allows users to stream high quality HD video content of just about any popular movie, for free. The interface is well organized, slick, can be downloaded on Google Chromecast, and can be streamed to Apple TV from any computer. And, surprisingly, the software design makes it hard for the service to be taken down. As one would imagine, film studios (and companies like Netflix and Amazon), are screaming.  Recently, Bloomberg reported that usage of Popcorn Time in the U.S. more than tripled between July 2014 and January 2015, accounting for one ninth of all torrent traffic in the country. Netflix discussed Popcorn Time in a recent letter to shareholders, noting that that service is used by 100 thousand Dutch people daily; “Piracy continues to be one of our biggest competitors . . . Popcorn Time’s sharp rise relative to Netflix and HBO in the Netherlands, for example, is sobering.”

Popcorn Time’s design is elegant, with grids showing thumbnails of the latest episodes or most popular movies, star ratings, synopses, and trailers. The interface is easy to use and non-spammy, with no cheap advertising like one would see on most torrent sites or other sharing applications.  Popcorn Time has such a professional feel that users don’t realize that they could be committing copyright infringement by using the service. According to Kyle Reed, chief operating officer of Ceg Tek, “We send out copyright infringement notices, and they question why they received them. It just looks like Netflix to some people.”

The Online Piracy Problem

Online piracy has been a problem ever since there was an “online,” although bootleg videotapes were a staple of the New York City Chinatown scene for decades before the advent of the Internet. However, online piracy used to be something only the true geeks knew how to do, using code names, VPNs and proxies to mask their trail. Today, online piracy is mainstream and ubiquitous; it has become ingrained in our culture, at least for the younger generations.  Excuses abound to justify downloading today’s popular movies;, from those claiming that piracy is a consequence of the movie industry being stuck in time refusing to give the public that they want, to those claiming that since they will eventually see it on cable or Netflix (which they already pay for), then what’s the harm in getting it now – “I am not going to pay for the movie anyway, so where is the harm?”Popcorn Time

In other countries, piracy may be the only way to view a film.  Due to archaic licensing terms and contracts that split the world into virtual regions, many films are unavailable in many countries. It is all too common for someone outside the United States to order a streaming movie through online providers, only to receive a message stating,  “This movie is not available in your region.” According to new research from Irdeto.com, the lack of content available in Russia has made piracy the primary viewing model with almost three quarters of consumers watching pirated video content. The U.S., UK, Australia, Singapore, and India, are not far behind Russia in online movie piracy.  In fact, as much as 20% of all internet bandwidth is attributable to internet piracy,  (although, we shouldn’t forget that the size of movies are hundreds of times larger than any website).

Even in the United States where the vast majority of consumers pay for some type of media content service, whether its cable or online services, will find many movies and TV shows unavailable. Video streaming services have chosen to compete by each offering their own exclusive content rather than trying to have the most complete menu. As a result, the best video remains spread out across a multiple outlets. Consumers without HBO can’t watch Game of Thrones; no Netflix subscription means no House of Cards, without Amazon streaming, no Transparent or Downton Abbey.  There is currently no one media service that contains all the available streaming content.

Popcorn Time Gives Consumers What They Want

The creators of Popcorn Time set out to make viewing easier, providing a one-stop-shop for movie and TV viewing. Members of the Popcorn Time team claim it began as a challenge by “a group of geeks from Buenos Aires who wanted to see if they could create a better way to watch movies.”

From that perspective, Popcorn time is not a business.  The coders did not design it for monetization. Popcorn Time remains an open-source project, with about 20 people—programmers and designers—scattered across the planet, making up the core team; all working on the software in their free time.  As well, there are multiple versions, called “forks” coded by different groups. Being open source, it is free for anyone to use, and anyone can submit changes to the code, add features, and fix bugs. If the core team thinks a contributor has been an asset to the project, they can ask him or her to formally become a team member. As such, contributors change frequently.

Online Piracy

Robert Red English, one of the early developers summed up Popcorn Time’s philosophy during a recent interview; “We are a community… I don’t think it will  ever be turned into a proper business. . . . Popcorn Time has no funding—it’s run out of the pockets of the small community behind it—and no business model. Unlike other platforms used for piracy it doesn’t even carry advertising. . . . We are a community and we are not really driven by the money of it.”

He also makes no justification for its copyright infringing use. English believes the responsibility for obeying copyright laws should fall to users. He wrote. “If it’s stealing or not varies by country and each user is given the choice to use the program, and are warned we use torrents. It’s up to them to choose if they wish to continue.” Another developer named Sebastian told TorrentFreak that he isn’t particularly worried about the industry coming after them.  “We don’t host anything, and none of the developers makes any money. There are no ads, no premium accounts, and no subscription fees or anything like that. It’s an experiment to learn and share” The Time4Popcorn team told the Business Insider that the software is not illegal because “it is not hosting anything. Popcorn Time serves only information. And it’s not forbidden to collect and serve public, open-for-all, information. You can look for the same information on Google.” While it may be true that in some countries and under certain circumstances, Popcorn Time may not be illegal, the justifications put forth above serve to highlight a larger problem; the lack of understanding of copyright law by the majority of the public.

To understand why these statements misconstrue copyright law, we first need to understand how copyright law applies to streaming media.  Copyright law gives the copyright holder the exclusive right to copy, distribute, publicly display and make derivatives of their copyrighted work. If the software causes a person to violate any of these rights, then the person would be an infringer, potentially liable for monetary damages.  In the United States, that could be significant, as film studios generally register their movies with the Copyright Office before release, they receive certain extra rights, such as a guaranteed minimum payment of $750 to as much as $30,000 per infringement. If the movie studio can prove that the person knew they were downloading the movies illegally, then those numbers change to a minimum of $30,000 to as much as $150,000 per movie. As well, the very nature of BitTorrent puts users at risk of infringement. To see why, lets look at how BitTorrent works

How Does BitTorrent work?

From Maximum PC

The process begins with a company installing a BitTorrent server, which is an internet-accessible computer containing a directory of user–generated “torrent” files, each file corresponding to a media or text-based files such as movies, music tracks or eBooks.  If a user (User #1) wishes to share a movie with the world, he or she uses BitTorrent software to create a torrent file, which gives the movie a unique identifier and breaks the movie into hundreds of little pieces. User #1 uploads the torrent file to the torrent directory on the server. Only the torrent file is uploaded, not the movie.  User #2 sees the movie in the directory and wants it.  So User #2 downloads the torrent file an opens it in his or her torrent software, which communicates with other torrent software around the Internet asking them if they have any pieces of the movie file.  Initially, only User #1 has the movie so User #2’s torrent software starts receiving the movie from User #1’s computer.

User #1 is “seeding” while User #2 is “leeching”. User #3 then sees the movie in the directory and also wants it. So he or she downloads the torrent file and the torrent software starts asking around for the movie. User #1 has the entire movie on his computer, but User #2 may not have finished downloading the movie yet, so only has pieces of the movie.  User #3’s software can get the file from both User #1 and User #2. Receiving pieces of the movie doesn’t have to be in order as the movie is assembled after all the pieces are downloaded.  So, User #3 may get a piece from User #1, and even though User #2 started the torrent process before User #3, if User #3 has a pice of the movie that User #2 hasn’t yet received, then User# 2 and get it from User#3.  Determining which User to receive pieces from is all determined by the torrent software.  The torrent software coordinates and optimizes the process so that receiving the pieces is fast and efficient, giving more priority to those people who allow part of the files to be uploaded at high speed.  The more upload speeds are limited, the slower the download speed will be.

So the more people that leech or seed at any given time, the faster the process.  All those computers leeching and seeding are together called a “swarm.“ The swarms talk to each other and prioritize the exchange based on various criteria, with hundreds of users all being part of the swarm.

However, in a streaming situation like Popcorn Time, priority is placed on earlier parts of the movie so it can start playing before the download is complete.  To do this, the pieces are placed into a temporary file on the user’s computer called a cache.  Caching is a way of making sure that the streaming process isn’t interrupted when a connection gets slower or is temporarily lost.  Once enough of the movie available, the streaming begins while in the background the movie continues to download.

Are Popcorn Time User Infringers?

That download is a copy and so an infringement.  As well, by re-uploading those pieces to other users, the user is distributing the movie, and so is also infringing on the distribution right of the copyright holder.  The display right is probably not infringed, as the viewing would be considered private viewing, in the same way a DVR records something.  Private viewing is an exception to the rule. When movie studios sue users for copyright infringement, they must show that the user is infringing.  To do this, they use software that works similar to torrent software, finding pieces of the movies on a persons computer, which it identifies using the computer’s IP address.  Every computer or website on the Internet has an IP address, which is nothing more than a unique identifier, just like a street address. However, the good news for users is that lately, courts have been questioning the use of an IP address as a valid method of determining which person downloaded the file.  For one thing, multiple people may use any given computer. The IP address only indicates the computer, not the user.  As well, most home or public networks use routers.  Because there are only so many IP addresses in the world, networks get around that issue by giving an address to the router and having the router give private addresses to the users on the network.  So when the movie studios see a piece of a movie on a computer, they only receive the public address of the router, which could have many computers attached to it. So imagine someone is downloading a movie while sitting in Starbuck’s, then the only IP address the movie company has is the Starbuck’s IP and would have no idea which customer is actually downloading the movie. For those reasons and several others, courts are starting to reject the IP address as proof that a particular user is an infringer. Not every court feels that way, but it is a trend. Many people also use proxy servers, which are usually provided by third parties.  Proxy servers spoof your IP address to it looks like all the subscribers have the same IP address.  The proxy server doesn’t log any of the traffic so there is no way to know which user had downloaded the movie.  Some forks of Popcorn Time have a free proxy server built in, while in other forks a subscription is required.

Are the Popcorn Time Creators Infringers?

We now know that Popcorn Time users are likely infringers, but what about the software’s creators? The Popcorn Time teams claim that they are not liable since they do not control or manage any of the content accessible through the service; Popcorn Time is just a method of access. “We are not selling you a product, we are not ripping you off, we are just giving something out for free,” claims one developer. The movie files are only on user machines, not hosted on torrent sites.  In that sense, Popcorn Time is not copying or distributing the copyrighted movies and aren’t even hosting BitTorrent servers, but rather, Popcorn Time uses public servers from third parties. So, the software in itself is not necessarily infringing.  The developers say that it is analogous to using a car; a car can be used to commit a crime, but car manufacturers are not held liable for the crime, only the perpetrators. It’s basically a “guns don’t kill people; people kill people” defense.

Bittorent

The problem with this line of thinking is that it neglects to take into account “the inducement rule;” a form of secondary liability in which a person or company induces another to commit the illegal act, but the inducer isn’t actually committing an illegal act. The “inducement rule” holds companies or individuals accountable for infringements if they clearly encourage users to infringe or provide access only to infringing content and no other legal content. However, according to the Supreme Court, that liability requires more than ”mere knowledge of infringing potential or of actual infringing uses . . . the inducement rule … premises liability on purposeful, culpable expression and conduct.” The key here is purposeful. Did the creators of Popcorn Time know that the software could be used for infringement purposes, but also created it for other uses?  That is very unlikely based on the way the software works as well as comments from the teams.  Open up Popcorn Time and you only see copyrighted content. There isn’t even a YouTube channel. Popcorn Time only delivers movies from torrent sites, without any way to input legitimate torrents.  It is made specifically to watch movies that the creators know are not licensed.

From a practical perspective though, it would be hard for law enforcement to target all the contributors and team members in multiple countries.  Each person would require individual prosecution, with the proof that they were malicious in creating the software.  It is possible that ignorance of the law, (i.e. believing that the project was legal after advice from the “4 lawyers” they claim to have consulted on the issue), may mitigate the punishment for some.  A more likely outcome, however, is that some people may go to jail.  Even if that occurs, it won’t matter much as the software will still be available and probably updated regularly with many other programmers striving to keep it alive.

The more likely target for law enforcement would probably be either the torrent sites that Popcorn Time uses or the owners of the sites that are hosting the Popcorn Time software downloads. That’s not an easy task.  The movie studios have been battling the PirateBay, the world’s largest torrent site, for decades having the site taken down multiple times only to find it popping back up on new servers in other countries. The fight has taken its toll on the PirateBay owners, though. In November the Pirate Bay’s servers were taken offline and were down for almost three months. The PirateBay cofounder Peter Sunde spent 5 months in a Swedish prison for assisting in copyright infringement. Founders of Pirate Bay have all recently been held in custody for their actions. In November, Cofounder Fredrik Neij was arrested in Thailand waiting to be tried for assisting in copyright infringement. Cofounder Gottfrid Svartholm-Warg got himself into a totally unrelated mess by illegally hacking into criminal records and drivers’ license records at a company called Computer Sciences, and sentenced to three and a half years in a Danish prison.

The battle against Popcorn Time would be much more difficult than the Pirate Bay action since there are no particular servers being controlled by teams. If a server is removed, the software will automatically jump to an alternate. An alternate approach has had some success.  The studios have tried to have the domains names taken away form there owners, but that only temporarily stops the software form being downloaded before the owners choose a new domain name and reestablishing their sites.  The movie studios successfully had the first iteration of Popcorn Time’s domain removed but new forks immediately popped up at other domains. Take any down and there are thousands of domain name registrars and hosting companies where forks of Popcorn Time can thrive.

 Now it looks like at least one of the Popcorn Time teams may be pushing back. An anonymous Popcorn Time developer recently stated that the added pressure is motivating him and his colleagues to finish a version of the software that operates entirely by connecting viewers’ computers and doesn’t rely at all on central servers. “When we release this, there will be nothing to be taken down again,” he says.

_____________

It is clear that Popcorn Time’s success is due to the fact that it solves a customer need; a centralized place that people can watch all their favorite content.   Is it legal . . . no, but with proxy server’s and other IP masking technologies, getting caught isn’t that easy. Why is it so popular? Some will say its success is due to the fact that the content is free, but other’s say that it is merely because the user’s receive content in a way that they want.  One thing is certain, if enough people use it we could see serious implications for Netflix, Amazon and a host of other online content providers. Popcorn Time’s success highlights the broken nature of the film industry, which a bunch of technology geeks understood better than those running the media empires.  Expect Popcorn Time to live for quite a while.  While it may have setbacks, we are likely see projects it flourish over time, at least until the film industry starts bringing content distribution in line with consumer needs and expectations.

About the author

Steve Schlackman

As a photographer and Patent Attorney with a background in marketing, Steve has a unique perspective on art and law. Should you have any questions on Intellectual Property contact him at [email protected] His photography can be seen online at Fotofilosophy.com or on display at the Emmanuel Fremin Gallery in New York City.

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  • After watching some movies on popcorn time i got a warning from verizon about copyright infringement violates but i am not downloading anything i am just watching. Am i breaking the law for just watching Popcorn Time?

    • As the article says “Your download is a copy and so an infringement. As well, by re-uploading those pieces to other users, the user is distributing the movie, and so is also infringing on the distribution right of the copyright holder.” Think about it this way, if you are watching a movie without paying for it, then you are infringing. As the article says, there may be a trend toward IP addresses being insufficient proof in some courts, but it is still only a defense, which only applies after you are sued and defending yourself in court.

      Verizon uses the six strikes program so read about that here https://torrentfreak.com/verizons-six-strikes-anti-piracy-measures-unveiled-130111/

  • Yeah this article demonstrates a fundamental lack of understanding in the word download and what constitutes a copy.

    Lets educate. User 1 has bought and purchased a copy of a movie legally. By a matter of law and previous legal precedent, as I am sure you know, an individual who purchases media has the right to protect the investment by securing it into an extra copy or 2 and storing it in a few different locations; allowing replacement copies to be available if the original becomes unusable. We went over all this back in the 80s with sony and the vhs recorders. Again recall that if you copied a vhs and a friend wanted to borrow your movie, it was completely legal to let them borrow the copy. You did not have to share the original.

    Now anyone who owns media legally and decides to loan that media to a friend is also, as a matter of precedence, not doing anything illegal. Owners of media are allowed by law to share said media.
    The internet simply created a new way to share you movie with more friends over greater distances.

    Now here’s where the rubber meets, whats the difference from loaning a buddy a vhs copy for which he/she is required to return, versus loaning a friend a digital copy they are required to return? That digital copy could be lent out via bluray, dvd, flash drive, or in this case over the internet. Popcorn time simply supplies a conduit to facilitate sharing. When the loan of the movie is complete on popcorn time, and the streaming stops, there is no usable meaningful files left on the computer. The little bit left over in cache would not constitute a movie or even a true copy of a movie. Simple put you cant now go i to the cache and watch the movie anytime. It does not work like that.

    Let me give a good example cause your a lawyer and i know how much you like money. When a bank transfers money electronically, is it copied or transferred? Right all the computer is doing is creating a visual representation of the electronic information you have sent. The same is true for this cache you are stuck on.

    Its not really a copy, but more or less, its the way those at a separate location can view a referenced object. To further clarify, if the original content loaner removes the movie of the torrent site and no longer wishes to share the movie, suddenly those cache file, which had very little value to begin with, have absolutely zero value after the removal.

    Another example. Video chat. When you look at someone in a video chat, what are you viewing? An actual copy of a person? Are you looking at an actual person? No and no. The computer is simply putting up a visual representation of the person you are talking to. There are not suddenly two of your girlfriend, or whoever you are talking to, walking around. The same is true for computer files. The network sees the file as one but simple accessible and viewable from multiple locations.

    the end result in action is no tangible usable file is ever fully and completely transferred or stored on the borrowers pc.

    Finally this is what makes me so disappointed in hollywood. Its one thing to want to discourage outright copying and distributing content, especially for profit. But it is an entirely different thing when the invented interest are attempting to blur the lines and muddy to water enough to make normal people believe that not just copying and distributing is illegal, but so is sharing. This malicious anti-american anti-fair use assault on citizens needs to be addressed. Misrepresenting the nature of how sharing is done on computers as some kind of piracy endeavor is so disingenuous.

    • Generally, if you want to be condescending, you should also be correct. Although, even then condescending probably isn’t really nice. I am trying to make my readers aware of the law, whether the laws are good or bad. Now, since you have decided to regale us with incorrect statements, I have to either censor your comment, (which I don’t like to do) or spend time correcting you (which I now have to do). Plus I think it is good to remind people that what they read in comments sections of websites aren’t always correct, Anyway, I’ll just pick a couple of highlights which I think will get the point across.

      First, your VHS concept is wrong, (and it’s actually the Betamax case.) While you can make a copy for your personal use, and movies can be loaned, or even sold under the “first sale doctrine,” the point is that there are a limited number of physical movies. When you give one away, you lose one. So you can only lend one at a time. Not so with digital media. While someone is watching a movie on Popcorn time, there is an extra movie in the world and you are lending multiple pieces of the movie. Your distributing. The movie is in the cache and the fact that it is transient does not alleviate the fact that it is a copy. Aereo tried that argument and they lost. I don’t necessarily think they should have lost, but there it is.

      Second, when a user downloads even part of a file, it is what us money hoarding lawyers call a copy if its constitutable in any manner. A part of a movie, even in pieces could be considered an infringement. It depends on a lot of things. We actually don’t decide that ourselves, we get that from the Supreme Court. It’s also distribution. Some people have used the de minimus defense, wherein the user doesn’t download enough or distribute enough to harm the copyright holder, but deciding that usually requires spending lots of money on us greedy lawyers. I won’t even get into contributory infringement. I think you get the point.

      If you want to respond with a more thought-out commentary, that leaves the condescension at your home, please do. But I will censor anything that doesn’t match thise requirements

      • I have a question. A company gave me a device to test that has Popcorn and other features built in. When I click on a movie to watch I can push download or just watch now. I was instructed to not download. Just watch it and turn off afterwards. So in this instance am I just watching and not distributing?? Thanks.

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