Mega Piracy

January 23rd, 2013 by Dylan Leave a reply »

I’m going to assume you know that Kim Dotcom recently launched Mega, his new cloud storage system. I’m also going to assume you’re aware of his previous venture Megaupload, a popular file locker site that is currently at the centre of a major legal battle.

The allegation is that Megaupload was complicit in large scale media piracy that was taking place on their site. The fact that people used Megaupload for hosting and distributing pirated media and software is not in dispute, but how much Megaupload did to encourage that usage is at the heart of the legal battle.

So it’s unsurprising that some people believe that Dotcom’s new venture, Mega, is simply an attempt to recreate what existed before – arguably a haven for piracy.

Mega’s primary point of difference is it’s client-side encryption. In principle this means that any and all data you upload to Mega is encyrpted with keys known only to you, the uploader. No matter how much they want to (or others might demand) Mega is unable to see the contents of the files you upload to the service.

On the face of it, and listening to Kim Dotcom, this is a move designed to reclaim privacy online. It’s a valid concern when we increasingly have personal data stored in servers all over the world subject to many different countries’ laws.

However a more cynical view is that this encryption serves Mega’s interests in that they can’t possibly be held liable for the any data they host given that they are entirely unable to inspect it at all. It is this interpretation that people point to as evidence that Mega has been established to again be a haven for piracy with an extra layer of protection for the company.

I just don’t think that makes sense, at all, and the reason is simple: Money.

Mega currently offers users up to 50GB of storage for free. Their business model is based on premium accounts – like Dropbox. The don’t host advertising on their site or on downloads like Megaupload did and sites like RapidShare still do. The file locker sites also sold premium memberships that allowed users to download faster or with fewer limits – this is another thing missing from Mega.

50GB is a lot of media – probably 25-40 feature films, or 200 episodes of TV. It’s free to the user and requires no more than an email address to setup. Mega has to pay for the storage space and traffic requried to store these files.

A pirate isn’t going to pay a premium rate to Mega to host their files when they could simply setup a new account to get an extra 50GB. And Mega stands to make no money from high-volume downloads with advertising as Megaupload did.

Also the account structure, even on premium accounts, doesn’t suit large-scale distribution of the sort Megaupload is accused of – traffic limits are 2x storage limits – a free account is limited to 100GB traffic per month. They would quickly be exceeded if Mega accounts were to be used for broad distribution.

It doesn’t make sense for Mega to attract pirates as they would effectively be subsidising these downloads. In fact, if anything, it’s in their interests to avoid that usage as it would cost more to service those users than others who are using only a little of their storage and not transferring a lot of data.