On the morning of Jan. 20, just 15 miles north of Auckland, New Zealand, police helicopters zeroed in on a sprawling estate in the sleepy hamlet of Coatesville. Armed with automatic rifles, officers rappelled out of the choppers and onto the grounds of an ostentatiously huge mansion, a 24,000-square-foot palace estimated at $24 million. Their quarry was the owner, a wealthy German native named Kim Schmitz. They apprehended him at home, where he reportedly waited out the invasion in his bedroom clutching a sawed-off shotgun.
Schmitz, 38, hardly looks the part of a Bond villain. Pudgy and bespectacled, he seems better suited to watching a Bond marathon on Spike. But in the early Aughts, he emerged from the burst of the dot-com bubble to found the popular torrent site MegaUpload and other Mega-named ventures powered by ad revenue. Under his better-known alias, Kim Dotcom, he's regarded by the international entertainment industry as a kingpin of hijacking intellectual property.
His ventures bankrolled a life of riotous excess. According to various news outlets, the more than $50 million in assets authorities seized included a fleet of Mercedes Benz sports cars; life-size sculptures of giraffes, rhinos and other exotic animals; millions of dollars' worth of art; $8 million in capital investments; and a fully loaded personal helicopter. A New Zealand judge cited the last item as evidence of Schmitz's "flight risk" status when denying him bail.
But Kiwi law doesn't criminalize wanton douchebaggery. So at the urging of the U.S. Department of Justice, New Zealand police took another tack: They charged Schmitz with facilitation of piracy. Specifically, federal prosecutors allege, Schmitz is guilty of copyright infringement through MegaUpload. They charge him and his site with stealing money from U.S. copyright holders, by disseminating protected, monetized content to consumers all over the world via the Internet — for free.
Schmitz denies the charges. He counters that what MegaUpload provides is no different from YouTube, which often features unlicensed reproductions of copyrighted works. Nevertheless, the high-rolling Internet mogul — whose vanity plates read "STONED," "HACKER" and "GOD" — stands accused of conspiring to rob more than $500 million from the music and movie industry.
"I'm an easy target," Schmitz told New Zealand's TV3 after making bail last week. "My flamboyance, my history as a hacker, you know, I'm not American, I'm living somewhere in New Zealand, around the world. I have funny number plates on my cars."
Tastelessness aside, Schmitz is right about making an easy target. From his ridiculous lifestyle to the means by which he supports it, "Kim Dotcom" is a perfect poster child for the uber-pirate archetype, a digital buccaneer with a penchant for trinkets and an amoral worldview. Yet he's also a hero to file sharers in the boundary-free etherworld of the Internet, where jurisdictions are vague, borders don't exist, and content is free fruit ripe for the picking.
So which is he? Is Kim Schmitz Blackbeard the pirate, stealing from the rank and file as well as global oligarchs? Or is he Prometheus the firebringer, delivering art directly to the people and bypassing the industry's corrupt and decrepit gatekeepers? Those poles capture something of the debate surrounding the illegal downloading of movies, music, photographs, articles, TV shows and other intellectual property from the Internet.
The furor came to a head in the U.S. in January over a notorious pair of anti-piracy bills nicknamed SOPA and PIPA, the former co-sponsored by two Tennessee lawmakers. If enacted, the bills would make Internet users everywhere culpable for alleged copyright infringement and subject to civil and criminal penalties. Though the proposed legislation is American, its implications are international. The pool of potential defendants is an ocean: According to a 2012 report published by the International Federation of the Phonographic Industry and Nielsen, one in four Internet users "regularly access unlicensed services."
Resistance among the voting public — spurred in part by highly visible public protests by the likes of Wikipedia, Google and Reddit — was strong enough to shut down both SOPA and PIPA before they came to a vote in January. Both bills have been postponed indefinitely, in what many regard as a sound defeat.
Even though SOPA and PIPA are hibernating, however, the arguments surrounding them aren't cooling down. If piracy is eroding the foundation of the entertainment industry, as the bills' proponents claim, is sweeping new legislation really the best way to fight it? And if existing laws allow the U.S. to crack down on Kim Schmitz all the way in the Southern Hemisphere, why are tougher laws needed? Someday soon, consumers, artists and lawmakers will have to decide which is more dangerous: leaving Kim Dotcom to plunder the seas of online content, or unleashing the bureaucratic equivalent of the Kraken to stop him.
In Nashville, it's more than an arcane discussion of intellectual property rights. Labels, publishers and performers claim online pirates are helping themselves to billions in booty from Music Row's coffers. The victims, they say, aren't faceless suits: They're working musicians, struggling songwriters and fledgling bands whose means of making a living are being shoplifted. The industry has hired lobbyists to make the case both on Nashville's Capitol Hill and in Washington that illegal downloading is outright theft and should be punished as such.
"We've seen our local music industry decimated," says Rep. Jim Cooper (D-Tenn.), who co-sponsored SOPA in the U.S. House. "They've lost billions of dollars of sales. I don't pretend it's the good old days ... but there's got to be a way to protect songwriters and protect Internet freedom at the same time."
But is legislation the answer? And if industry executives are slow to adapt to a changed media world, where does that leave the artist?
That's what Chris Sevier wonders. By day, Sevier is a Nashville copyright attorney. By night, he's shlepping for his record label, Severe Records LLC. Severe Records' current artist roster boasts only 16 acts, positioning the company far from the Sonys and UMGs of the entertainment world, and even further from those companies' multimillion-dollar salaries.
Even so, Sevier says, piracy has "a trickle down" effect on his business. He believes that doing something about the problem is better than doing nothing. As a musician, label owner and lawyer, Sevier sees every angle of the controversy over copyright infringement versus free speech. Perhaps for that reason, he comes down somewhere in the middle.
"Generally speaking, I'm a proponent of legislation like SOPA and PIPA," Sevier tells the Scene. "It speaks to authors' rights. We shouldn't sacrifice the whole for the one. I don't buy that this is a free speech issue, necessarily, because that argument ignores the rights of creators who should be getting paid for their work."
At the same time, he doesn't think SOPA or PIPA would solve the problem of how to reclaim material that has already been made available for free. He also believes the legislation as written could create PR nightmares and tangles of new litigation.
"We have to be careful, because any time we resort to going to the courts and increasing litigation, that isn't a way to fix things, either," Sevier says, adding that copyright cases can drag on for years and aren't good publicity for record companies. "So the fact that they could possibly go in there [and prosecute] unilaterally seems like a due process violation."
Sevier laments the departure of friends who have left Music City for greener musical pastures over the years, saying that he doesn't think the industry of the high-flying '90s, when compact discs were king and cash was flush, will ever return.
"It's terrible," he says. "They would have gainful employment [in Nashville] if the problems weren't there."
But even Sevier admits those "problems" have as much to do with an industry reluctant to compete with pirates as much as it does with pirates themselves.
"I wish they would spend resources in ways that would try and create leverage and harness the situation where content can be monetized instead of making it some kind of free speech issue," Sevier says. "And I hate making it a free speech issue, because authors' ideas are going to be obliterated if nothing is done. I think those free speech rights must be protected, absolutely, but there's got to be a way to do something while respecting those rights at the same time."
He argues that current Internet copyright law — such as the Digital Millennial Copyright Act and the PRO-IP Act — isn't sufficient. But it's a big jump from the DMCA, which grants immunity to websites accused of carrying unlicensed copyrighted material if websites remove the material themselves, to the likes of SOPA, which would pave the way for unilateral legal action. And given the proficiency of hackers to always stay one step ahead of the curve — the hacktivist collective Anonymous claimed responsibility in January for taking down the RIAA's website "for the lulz" — it's dubious whether this legislative quantum leap would net any positives to curb piracy, and by proxy protect content creators.
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