He won't have to worry about licencing content, since he won't knowingly use copyrighted content beyond what freebies are offered to CPA partners.
I think everything you're saying makes sense for a Paysite, but he's not a paysite---just an affiliate and traffic producer which is a bit more downstream.
As for dealing with the major players to have traffic funnelled through him, he won't be able to do that initially because (a) traffic trades require that you have traffic to trade and (b) you're going to want to have your traffic stream through organic links and SEM since you likely can't afford to pay for traffic for a non-paysite: the ROI just isn't there in advertising.
This is one of the most virulent misconceptions about copyright law on HN. The DMCA does not say that you are protected as long as you honor takedown notices. In addition to honoring them, you must not have any specific knowledge of infringing use of your service that you fail to act on. If any idiot can hit the front page of your site and see that it's used mostly for piracy, law enforcement will take an interest in you once you get big. If, during discovery, they find email messages showing you conspiring to keep copyrighted material on your site, they'll charge you criminally.
But what happened instead was that a prosecutor found they were not protected under safe harbor. With the stroke of a pen, that turned the business into a criminal racket. Overly general mafia and drug war laws then allow the prosecutor to confiscate property and freeze funds, killing the business.
Of course a judge still has to sign off, but there are no provisions for the accused to defend themself or even be informed of the process.
If you don't believe commercial piracy on an industrial scale should be criminalized, then naturally you'd believe that there aren't enough due process constraints on the DoJ to pursue those cases. But if you accept the fact that creating hugely profitable high-volume piracy applications is a crime under US law, it's hard to see the "due process" problem here.
No. The DOJ destroyed the Mega business, and froze Kim Dotcom's assets, and the prosecution will take years to work its way through the courts. Worse yet, they hoodwinked our officials here in New Zealand to come along for the ride. It's a day of shame, not one to defend.
This would instantly remove their DMCA safe harbor protections as it relies on Megaupload not being aware of illegal material on their platform. Further it also requires that Megaupload have no financial gain directly attributable to the illegal material.
So basically if the Skype logs are real and the prosecutor can prove this then Megaupload was rightly indicted and should be prosecuted without the protection of DMCA safe harbor.
As a final note, though, I do note necessarily believe they should have the power to take down the business until after they've proven the illegal activity. Just in case anybody got away with that impression.
The pirate bay case in Sweden is the best example of this. The by law required impartial police investigator was hired by one of the parties the day after he finished his work. A several order higher paying job. the exact day after he finished his report on the pirate bay. When the police was asked about it, they said it was "common" practice. Later during the trial, the lawyers requested the investigator as witness (to ask about all this), and the investigator refused to return to Sweden when the court agree to the request. This however had no impact whatsoever on the judgment.
The court judgment is also hilarious funny to read, as it include some golden nuggets of complete unknown laws, not written in the actually law books (reason being, work towards a law counts too in Europe, not just what is written). For example, if you produce a service, you might get hanged for it even if you produce it with perfect fine intentions. What counts is the primary usage of said service, so if you produce a tool, and the prosecutor claims that the primary usage of that tool is crime, you can go down for it as facilitator of crime (generic). Its facts like this, that really would have me worried if I created a program like nmap. Hopefully, prosecutors won't realize this law actually exist.
The pirate bay case is an example of a website, which though safe harbor would protect them in regard to user-uploaded content. They where wrong in that regard.
The reason they haven't is that you're wrong. The DMCA doesn't stop working when you get big. It stops working when you take steps to ensure that infringing content is featured on your site.
For a bulletin board full of nerds, we sure are happy to insult each other's intelligence about what MegaUpload was. What kind of an idiot do you have to be to not understand what made MegaUpload popular? Are you really willing to write a comment in public under your real name saying that MegaUpload was a good piece of software? That sentiment doesn't make you feel embarrassed as an engineer? It was a crappy piracy site; it was popular solely because it was an effective way to upload and download pirated movies and TV shows. If it had been a Dropbox competitor, we'd all be making fun of it, instead of pretending like its founders are technology martyrs.
The adult market has no one with the clout of the RIAA to lobby congress.
I said the adult industry doesn't have an organization with clout comparative to the RIAA. That's true as far as I know.
Do you know of such a broad-based lobbying group for the adult market?
Clips4sale has a good business model. I can see this being the future. But micro-payments in porn are hard.
The biggest issue back in the day was Content licencing, which with today's whole DMCA crap, I would expect it to be far worse on a user-generated content site. If you licensed images for a specific domain and they appeared on another domain you owned, you would have legal representatives sending you emails (most of the time you would just do a deal with the owners and extend the license). This wasn't the result of the content being found by the owner, this was from organised firms that were hired just to scan images and videos looking for specific sets that they represented. When I hear about user-generated content sites these days, I think of one giant nightmare when it comes to content.
It's easy enough to throw something together and try to make some money from advertising, but to be successful in that industry boils down to 3 things. Traffic, Quality and Retention.
- You won't get subscribers without Traffic (fairly simple). If you think that you can get organic traffic off the bat, think twice. You'll need to set up some deals with guys who own key domains to have them funnel traffic through to you. (I don't know if this sort of market still exists, but I can't see that it would have died off)
- To convert the subscribers you need Quality or unique content (which the successful sites will usually do in-house or through companies that will work with them to produce unique content). If you're going to throw up a few galleries of cheap $5 content sets that everyone has seen before, you're not going to get the conversion.
- Retention, is a tricky one. Back in the day you used to count on the subscriber, doing a one off then forgetting stinging them with a re-bill or two, or three. Then when they got their bill they were too embarrassed to challenge they usually silently cancelled. As I said before, around the time I left, Visa was starting to really crack down on charge backs as subscribers had actually grown a pair and started wanting their money back. The only way to fight this is to offer what you advertise and more. You won't keep everyone happy, but you'll see a nicer charge-back rate.
For the record, I was a coder, I wasn't the guy behind the camera, or even the guy that designed the sites. I dealt with the systems, and kept them running. It's not a glamorous title to throw around at dinner parties, but it does bring up some interesting conversations when you start talking about the things that you seen in the industry.