BOB GARFIELD:
“Piracy is the greatest obstacle the film industry currently faces.” Those were the words of Dan Glickman, chairman of the Motion Picture Association of America, before a House subcommittee hearing in 2006. Movie and record companies claimed combined annual losses of more than five billion dollars due to file-sharing, pitting the entertainment industry against those who believe all content wants to be free.

Wired magazine’s Daniel Roth chronicled a recent battle in the piracy wars in the February issue of Portfolio and the battle begins with MediaDefender.
DANIEL ROTH:
MediaDefender is a company hired by the Hollywood studios and hired by almost all the record labels. And what they do is they go on to all kinds of sites on the Internet where you can find free music, free movies, free games – you can download all of this content – and they put up fake versions of all of those movies, games and songs.

Like there’s a site called The Pirate Bay, which is the biggest site for finding free content. It’s sort of a Google of piracy. And you go on there, you can find Die Harder, and you download it, and if MediaDefender does their work correctly, you should spend two days downloading this movie or a day and a half, depending on your Internet connection. And it gets in and you open it up and it’s all static. MediaDefender has spoofed you.

So Hollywood hires this company. They go out, they put these fake versions of the files all over the Net, and the idea is to drive people who are trying to download crazy. They'll stop downloading them. They'll then go to Virgin Records and buy the movie, you know, legitimately.
BOB GARFIELD:
And the media companies are feeling pretty secure with MediaDefender. As far as they know, it’s working.
DANIEL ROTH:
Yeah, absolutely. They pay millions of dollars to have MediaDefender try to protect their content online, and they see this as they're going to fight fire with fire. These pirates and these college kids, they're going to go online and use their high speed connections and they're going to download all of this stuff that the movie studios have worked so hard to create and they're going to steal it from them, is the way they see it. And they say, you know, we're going to battle back at you with technology.

Now, the problem is there are a lot more people and a lot more kids out there with a huge amount of technological background who have a vested interest in making sure that Hollywood’s attempts to stop them don't actually work.
BOB GARFIELD:
Okay. So – arrgh – enter the buccaneer Ethan, a high school kid who was bored during Christmas break. What did he do?
DANIEL ROTH:
He’s really more of a hacker than a pirate. He just tries to find weaknesses in different companies’ firewalls. He happened to get into MediaDefender. Didn't know what the company was. Started poking around and discovered that this was a company that tried to put up fake versions of these files and try to defend the Hollywood studios.

And for about six months, Ethan just sat there and watched the company. He could listen to their phone calls. He watched all of their email traffic. He got the entire Outlook database of the CEO. He knew how much people were paid. He knew all their Social Security numbers. And he just watched and waited.

And in September, he took all of this email he had collected and he published it on the exact same networks where you can download all of these movies and games, places called BitTorrent networks. It was a huge file, and he said everyone could download these emails. They can learn how MediaDefender works and the pirates will now be able to defend themselves because all their tricks are revealed. And, in fact, all their tricks were revealed.
BOB GARFIELD:
When he posted all of the company’s internal files, he invited other hackers, I guess, to go still deeper into that company. What’s been the result of his hacking?
DANIEL ROTH:
The result of his hacking is that MediaDefender is in serious financial trouble. The company lost close to a million dollars within a couple weeks of this happening. They have found that their defenses don't work as well as they used to. The pirates have been able to develop even smarter systems.

So they've been able to look under the hood, see how Hollywood tries to operate against them and say, all right, well, we can now defend ourselves against this.
BOB GARFIELD:
Where has it left the studios and the record companies? I mean, is the drawbridge down? Are the gates open or have they come up with other ways to keep pirates away?
DANIEL ROTH:
You know, they are total believers in their ability to use their own billions and billions of dollars to fight this. They think they're going to win. If it’s not going to be MediaDefender, it'll be something else. The lawsuits are still going on against the college students. There are huge pushes going on in Washington right now to make it so that universities, if they don't stop filesharing on their campuses, then they won't receive federal funding.

There are fights in each of the state legislatures to make sure that pirates don't have easy access to this content. They're going international. So there is absolutely no stopping the movie studios or record labels right now, despite showing little in the way of success for what they've been doing.
BOB GARFIELD:
And what about Ethan? As we speak, he’s probably sitting in Algebra II, Trig or something. Is he going to wind up, you know, working for MediaDefender or for Sony or something?

DANIEL ROTH:
I only pray that one day the federal government figures out a way to put him in their employ, make him work for the NSA or something, because he’s definitely got some great tools. But I certainly don't ever see him going Hollywood.
BOB GARFIELD:
[LAUGHS] Okay. Dan, I appreciate it. Thank you so much.
DANIEL ROTH:
Thank you.
BOB GARFIELD:
Daniel Roth. His report titled, The Pirates Can't Be Stopped, is in the February issue of Portfolio.

BROOKE GLADSTONE:
One final note on the piracy wars. The website The Pirate Bay, the one Daniel Roth referred to as the “Google of piracy,” is run by four friends from Sweden, a country historically with lax intellectual property law.

A little more than a week ago, however, Swedish authorities charged the four men with, quote, “promoting other people’s infringement of copyright laws.” If convicted, they could face up to two years in jail.

Whatever the outcome, it appears unlikely that The Pirate Bay can be shuttered. Said one of the men last week, “We don't know where the servers are. We gave them to people we trust. It could be three countries. It could be six countries. We don't want to know,” he said, “because you'll have a problem shutting them down.”