"Working in concert with Interpol, British and Dutch police closed down a website in the U.K. called OiNK, claimed the world's largest Web locale for stolen and uploaded-before-release music & movie file-sharing site. The website's owner, a 24-year-old computer field worker, was led manacled from a house in Middlesbrough, northern England, concluding the initial stages of an investigation by Dutch and English police, with raids masterminded by Interpol. Also, a Teesside apartment and several Amsterdam buildings were also raided, as the joint sting smashed the by-invitation-only website. Police officers raided the man's home, his employer's offices and his father's house, as well. The site's servers were nabbed in a series of raids starting a week previous. Authorities plan to charge the man with conspiracy to defraud and infringement of copyright law.
According to the International Federation of the Phonographic Industry (IFPI), OiNK had posted 60 major album uploads ahead of release in 2007, and was the globe's largest purveyor of pirated pre-release albums, and so became the subject of a two-year investigation directed by Interpol called "Operation Ark Royal." But instead of seriously hampering online piracy, this closure will prove a mere speed bump for serious Internet recording thieves, who will simply move on elsewhere. It only underscores the colossal impact on economies by the theft of Intellectual Property Rights (IPR's), which takes $58 billion a year from the U.S. economy, according to a 2005 study by the National Center for Policy Analysis (NCPA).
The computers housing OiNK's site were located in Amsterdam, Netherlands, and were turned off by Dutch authorities. Jeremy Banks, head of the IFPI's Internet Anti-Piracy Unit stated, "OiNK was central to the illegal distribution of prerelease music online...this was not a case of friends sharing music for pleasure. This was a worldwide network that got hold of music they did not own the rights to and posted it online." The investigation into the site and its 180,000 members is ongoing, and many more arrests are possible. Members joined on recommendation of a friend, and then paid "donations" to permanently download CD's and movies, sometimes a month or more before their release. The downloaded material would then fill music and film-oriented blogs across the world, where they could not be recovered, the damage permanently done. A Cleveland Police spokesman said: "This extremely lucrative and creative scheme consisted of a private file-sharing website being set up. Membership was by invitation only." Members were asked to give donations by debit or credit card, and these "donations" were also nabbed, believed to be in the hundreds of thousands of pounds.
OiNK was the biggest invite-only, torrent-based (a highly sophisticated, state-of-the-art download matrix) website to be built. Movies, audio books music, programs, and even sheet music were free for the grab. Donations that funded website upkeep and maintenance were made via paypal. The OiNK community was simple, yet sophisticated and rigorously organized.
Pre-released albums and movies are perhaps the biggest headache currently vexing the industry, as the pre-release items are sometimes early versions of songs, or not finished movie edits, tainting the
finished product and deflating the legitimate hype surrounding an artistic product's premier. This and other types of piracy have helped diminish sales of physical CD's, as music receipts have plummeted by more than a third internationally, the last half-dozen years.
This illegal file-sharing site bust merely throws a light on a depressing subject for many in the electronic arts, such as the movies and music industries. But what is the real impact of piracy, which many see as a harmless activity? Whereas the owners of the OiNK site were making a small fortune from the site, many average citizens who engage in file-sharing believe their acts are innocent and that the already-rich-and-famous artists will not be damaged, while the industry sails along quite happily. But this is not the case. Says U.K. Cleveland Chief Superintendent Mark Braithwaite, "While some might view this type of act as a victimless crime, there's no such thing. The cost of an enterprise such as this will be added to the cost of any legitimate purchases further down the line."
The National Center for Policy Analysis wrote a fascinating article called, "THE TRUE COST OF COPYRIGHT INDUSTRY PIRACY TO THE U.S. ECONOMY," which concluded that piracy costs the U.S. economy $58 billion in total output annually, meaning revenue and other measures of gross economic performance. Lost were 373,375 jobs, from which 123,814 jobs would have been gained in the copyright industries, i.e. music or film realms, or in downstream industries, while the rest, being 249,561 jobs would have been gained in other U.S. sectors supporting copyright industries, such as movie house workers, and the like. U.S. employees lose $16.3 billion every year, and of this, $7.2 billion from the copyright industries or downstream retailers, and $9.1 billion was lost from the employees of other U.S. industries. The federal, state and local governments also lost tax revenue, being at least $2.6 billion per annum.
