Copyright holders thought they had scored a major victory last month when one of the biggest file-sharing networks in the world was shuttered. Megaupload had been responsible for an estimated 30% to 40% of all file-sharing traffic worldwide, but a recent study suggests that the network’s closure did absolutely nothing to slow piracy related to file-sharing. To compound matters, another network that has flown under the radar for some time has now been dragged into the spotlight, and it may pose one of the biggest threats yet to copyright owners and their content. Read on for more.

“Tribler” is a peer-to-peer file-sharing client that is completely decentralized. “The only way to take it down is to take the Internet down,” the software’s creator says.

The Tribler BitTorrent client has been in development for more than five years and according to the researchers at Delft University of Technology in the Netherlands who built it, it has experienced 100% uptime since it first launched.

Unlike standard BitTorrent clients that rely on torrent sites to find and download content, Tribler is based on true peer-to-peer technology that requires no intermediate servers. Instead, the client installed on users’ computers communicates directly with other PCs on which Tribler is running.

“Our key scientific quest is facilitating unbounded information sharing,” Tribler creator Dr. Pouwelse told TorrentFreak in a recent interview. “We simply don’t like unreliable servers. With Tribler we have achieved zero-seconds downtime over the past six years, all because we don’t rely on shaky foundations such as DNS, web servers or search portals.”

Though it took an extensive investigation and coordinated efforts across multiple continents to take down Megaupload and its founder Kim Dotcom, the task was simple compared to stopping the threat posed by decentralized clients like Tribler. Joe Morganelli, founder of copyright consulting firm Morganelli Group, thinks true peer-to-peer clients like Tribler will change the way BitTorrent is used, making it infinitely more difficult for authorities and copyright owners to combat piracy.

“With no central location it will make going after individuals so much more important,” Morganelli told BGR in an interview, though he acknowledges that this approach has not been terribly effective in the past. ”The crusade against a normal individual has had very little effect since there are millions of people,” Morganelli continued. “With the central location, it makes for an easy lawsuit.”

Tribler is free to download and use, and its code is completely open source.

On Wednesday, Sweden’s Supreme Court announced that it decided not to grant an appeal in the long-running Pirate Bay trial. After a nine-day trial in April 2009, Peter Sunde, Fredrik Neij, Gottfrid Svartholm and Carl Lundström were found guilty of assistance to copyright infringement and sentenced to one year each in prison and payment of roughly $7 million in damages. Each defendant appealed the verdict, and in November 2010 the sentences were shortened, but the fines were increased. The new sentence was again appealed, and now the Supreme Court has rejected those appeals. Sunde must serve eight months in prison, with Neij facing 10 and Lundström to face four months. Svartholm, who missed the hearing do to illness, will be forced to serve a one year prison sentence. One of the defendants, however, reached out to TorrentFreak and informed the website that he plans appeal the new sentence at the European Court of Justice.

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Piracy is still a huge problem according to the music industry and Hollywood, and it’s hard to dispute the notion that downloading a paid digital product without actually paying for it is theft. Now, as TorrentFreak releases its list of the 10 most pirated movies of 2011, we can see a possible correlation between illegal downloads and movie revenue continue to take shape. Read on for more.

Fast Five — the fifth film in Universal’s Fast & Furious franchise — was the most pirated movie this year according to TorrentFreak, having been downloaded 9.26 million times. The Hangover II followed with 8.84 million downloads, and Thor was the third most pirated film with 8.33 million illegal downloads. Source Code followed with 7.91 million downloads and I Am Number Four rounded out the top-5 with 7.67 million downloads.

At the same time, movie ticket sales and box office revenue declined for the second straight year in 2011 according to The Numbers. Moviegoers purchased 1.24 billion tickets in 2011 compared to 1.33 billion last year, and revenue from ticket sales sank to $9.9 billion this year from $10.46 billion 2010.

Perhaps even more telling are DVD sales figures in 2011 compared to 2010. While legal digital downloads certainly gained popularity in 2011 and likely had a more significant impact on DVD sales, the disparity between DVD revenue in 2010 compared to this year is much more pronounced than it has been in the past. Seven movies saw DVD sales that exceeded $100 million in 2010, lead by Avatar, which pulled in more than $183 million. In 2011, no DVD did $100 million in sales; Disney’s Tangled was the highest-grossing DVD of the year with just $96 million in sales.

A complete list of the top 10 most pirated movies of 2011 along with torrent download totals and worldwide gross revenue totals follows below.

Read [top 10 torrents] Read [ticket sales, revenue] Read [DVD sales]

It is a sad day for torrent lovers. A few days ago, an injunction was granted to several Hollywood movie studios that prohibited CB3ROB — thepiratebay.org’s hosting company — from connecting the site to the internet. Torrent Freak is reporting that CB3ROB director, Sven Olaf Kamphuis, has decided to “stop routing The Pirate Bay’s traffic until his lawyers have carefully read and reviewed the legal documents.” The report goes on to say the torrent site has, “already set the backup process in motion which will bring the site back online. The Pirate Bay’s servers are untouched and getting the site up and running only requires the routing (IP-tunnel) to go through another provider.” At time of publishing thepiratebay.org was down. 

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The net neutrality movement received a huge blow today when the US Court of Appeals sided with Comcast in its claim that the Federal Communications Commission lacks legal authority to demand ISPs shape internet traffic. Over the past few years, the FCC has grown increasingly concerned that ISPs would throttle connection speeds for things such as peer-to-peer file sharing and streaming media in order to dedicate more bandwidth to services it can better capitalize on. Comcast first challenged the FCC on net neutrality in 2008 when the FCC reprimanded Comcast for throttling the connections of clients who used a large amount of bandwidth through P2P networking.

As a rule of thumb, we at BGR are not in favor of government agencies (whether independent or not) imposing rules upon industries, although in this instance we’re actually finding ourselves disappointed if only for the fact we believe net neutrality must become a reality.

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Just because we might associate the company with loveable characters like Bugs Bunny and Daffy Duck doesn’t mean the characters who are running the show at Warner Bros. Entertain UK have similar personalities. After all, they’re the ones that came up with the brilliant idea of hiring a student intern, paying him or her £17,500 ($26,212 USD) over the course of a year and having them engage in a bit of digital espionage. The intern, who is to be “IT literate” and currently enrolled as a student pursuing a degree in computer science, will be charged with infiltrating torrent sites and creating bots which sniff out media which Warner Bros. and NBC Universal hold the copyrights to. Here’s a snippet from the job description:

During the 12 month internship, duties will include: monitoring local Internet forums and IRC for pirated WB and NBCU content and in order to gather information on pirate sites, pirate groups and other pirate activities; finding new and maintaining existing accounts on private sites; scanning for links to hosted pirated WB and NBCU content and using tools to issue takedown requests; maintaining and developing bots for Internet link scanning system (training provided); preparing sending of infringement notices and logging feedback; performing trap purchases of pirated product and logging results; inputting pirate hard goods data and other intelligence into the forensics database; selecting local keywords and submitting local filenames for monitoring and countermeasure campaigns and periodically producing research documents on piracy related technological developments. Various training will be provided.

Yikes.

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First, the short version: The Pirate Bay has been acquired by Global Gaming Factory X AB for $7.7 million. Now the even shorter version: WTF?! We don’t know where to start with this one. The ridiculously low acquisition price? The fact that this politically active, anti-establishment, controversial, torrent-loving site was acquired at all? A blog post on the site this morning states:

The profits from the sale will go into a foundation that is going to help with projects about freedom of speech, freedom of information and the openess [SIC] of the nets.

Fair enough. The deal is expected to be completed in August and whatever the case, expect The Pirate Bay to undergo some pretty big changes moving forward. If you’re a pirate, expect The Pirate Bay also to become infinitely less useful moving forward. Apparently those legal fees add up pretty fast.

[Via The Pirate Bay]

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The Isle of Man, a small self-governing subsidiary of the United Kingdom with perhaps the coolest flag ever (see above), is proposing a new law that would allow its residents immunity from prosecution for illegal downloading of copyrighted material. Each citizen would be forced to pay a monthly 1 Pound (roughly $1.40) fee into a communal fund that would be redistributed to copyright holders by a centralized government office. Both publishers and labels would benefit, and the residents of the Isle could breathe more easily knowing that their Torrent habits won’t land them a stint in some horrifying Isle of Man jailhouse. The downside, of course, is that the amount of compensation on the copyright holder’s side would be pretty nominal, leading us to believe that it’s going to be a hard sell. Then again, the concept has been batted around since the formative days of Napster, so there must be some appeal to such a business model. It’s certainly innovative, and some cash is better than nothing, so it will be interesting to see if regulators and government officials manage to pull this one off.

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While the popularity of torrents has shown no signs of dwindling any time soon, the MPAA-fueled case against EliteTorrents just saw its first conviction. Back in 2005, Homeland Security agents served search warrants in various locations around the country as part of “Operation D-Elite” that resulted in 10 arrests. What a fantastic use of the country’s counterterrorism resources. Now more than three years later Clintwood Virginia resident Dale Dove has been convicted of felony copyright infringement and conspiracy, and has become the first man to be convicted as a result of the case. According to prosecutors of the case, Dove was the ringleader in the group of pirated content suppliers that was EliteTorrents. Dove apparently maintained a server of his own and played a part in recruiting others to supply content and servers. While Dove represents the first conviction in this case, he will not be the first to serve time as a result. In 2006, EliteTorrents server administrator Scott McCausland pleaded guilty to two copyright-related charges tied to the distribution of Star Wars: Episode III and served five months in jail plus an addition five months of house arrest (during which has wasn’t allowed to use Linux). Dove’s sentencing will take place in September; good luck buddy.

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