Dotcom’s first interview: ‘I’m no piracy king’
Thu, 01 Mar 2012 7:30p.m.
By John Campbell
Campbell Live has spoken exclusively with Megaupload founder Kim Dotcom in his first TV interview since being arrested.
Dotcom faces a barrage of FBI charges relating to the operation of his file sharing company Megaupload.
I spoke with the internet millionaire about the charges – which include racketeering, copyright infringement and money laundering – the internet, his time in jail and the whole business model surrounding Hollywood.
The full Kim Dotcom interview transcript:
Kim Dotcom: Well you know, it’s a little bit like a nightmare, I would say. Unexpected, horrifying for my family, my wife who’s pregnant with twins has nightmares and is feeling miserable and, you know, of course I’m facing a very interesting situation.
John Campbell: Kim, you say it was unexpected. Was it totally and absolutely unexpected, did you never, ever think that this would happen somewhere in the world at some time?
KD: Well, the business is seven years old. We have been sued only once, never by any, you know, movie company or big content company and we have spent millions of dollars on legal advice over the last few years and our legal advisers have always told us that we are secure and that we are protected by the DMCA which is a law in the US that is protecting online service providers of liability for the actions of their users, so it came completely unexpected.
JC: What did your lawyers tell you about what you were doing? As we understand Megaupload, in its simplest terms, it’s a giant kind of exchange system in the sky, right? So you upload something, someone else downloads something, you’re sharing files, those files could be anything, right? How do you protect yourself against breaches of copyright by the people using Megaupload?
KD: Well supposedly, and that’s what everyone believed, is that the law is protecting us. We can’t be liable for actions of third parties, you know? As long as we follow a regime of taking things down that are reported to us, which we have done over all these years, we are protected, according to the law and, you know, I find it very surprising that this is happening because like I said we had legal advice all these years telling us that we are an online service provider and we are not liable for the actions of third parties.
JC: Where does Megaupload come from? What was the idea behind it? It was your idea, right, why?
KD: Well, you know, one day I was sending a file to a friend via email and I got a message back saying, you know, the file’s too large and the mail server has refused to send it so I thought, you know, what can I come up with, what can I do to solve that? So I basically created a server where I could upload a file and got a unique link and then I would just email that link to my friend and he would then get the file and that’s how Megaupload was started, it was just a solution to a problem that still exists today.
JC: How quickly did it take off, were you surprised by it?
KD: Well I was surprised how quickly it took off, it grew virally because every time someone was sending a file to Megaupload to submit it to somebody else, that person would then also learn about Megaupload and that feature and it would just grow and everyone would use it because it was such a useful tool…and free.
JC: Kevin Suh, the Senior Vice President of Content Protection at the Motion Picture Association of America said, and I quote, “You are the biggest copyright infringer in the world”. Are you?
KD: Absolutely not. I’m no copyright infringer. I mean, you have to look at Megaupload in its sheer size. We are talking about a network that was running on 1.5 terabytes of bandwidth.
JC: Explain that to me, how big is that?
KD: That is about 800 file transfers completing every second. We are a relatively small company; you can’t expect us to police that kind of traffic.
JC: So 800 file transfers occurring every second.
JC: 24 hours of the day, every day of the year.
JC: Every second.
JC: And you know what’s in those file transfers? You’re able to look at those 800 file transfers a second and say…
KD: Well there are other laws that protect users and those are privacy laws. For example in the US it’s the Electronic Communication Privacy Act which prohibits us from looking into the accounts of users proactively and look for things. It’s like mail, it’s private, we cannot just go in there and police what these users are uploading. But that’s why we have our own terms of service in which we tell our users, “You cannot upload anything that is infringing on anybody’s rights, you can only upload things that belong to you and before any user uploads any file to Megaupload they have to click on a little box that says “I accept the terms of service”. So we have a legally binding agreement with these users that they are not supposed to upload anything that doesn’t belong to them.
JC: Of course, that is a romantic notion though, isn’t it, that just because we tick the box accepting the terms of service that we’re going to behave ourselves when we’re in there, right? That, I mean, you must have known that people were doing whatever they wanted once they’d gone through the front door. They were exchanging any kind of files that they wanted to exchange. What opportunity did you have to police that?
KD: Well, of course everybody knows that the internet is being used for legitimate and illegitimate uses. I think every online service provider has the same challenges that we have. YouTube, Google, everybody is in the same boat. So what you need to understand here is that we provided the content owners with an opportunity to remove links that were infringing on their rights. So, not only did they have an online form where they could take down infringing links, they had direct delete access to our servers so they could access our system and remove any link that they would find anywhere on the internet without us being involved. They had full access and we’re talking about 180 partners, including every major movie studio, including Microsoft and all big content producers and they have used that system heavily and you need to understand that that system was not even something that was even required by the law. We provided that voluntarily and they have removed over 15 million links.
JC: So every member of the Motion Picture Association, every film studio who is a member of the Motion Picture Association of America had direct delete access to Megaupload.com to take out copyright-infringing material – is that the case?
JC: And yet the FBI indictment against you alleges, and I quote, “Copyright infringement on a massive scale with estimated harm to copyright holders well in excess of 500 million US dollars”.
KD: Well that’s complete nonsense. If you read the indictment and if you hear what the Prosecution has said in court, it’s at least $500 million of damage were just music files and just within a two-week time period. So they are actually talking about $13 billion US damage within a year just for music downloads. The entire US music industry is less than $20 billion. So how can one website be, you know, responsible for this amount of damage, it’s completely mind-boggling and unrealistic.
JC: So are you really suggesting that you are a sacrificial lamb of some description?
KD: Well, there’s no other explanation for me because we’ve done nothing wrong. I’m no criminal, this website has not been set up to be a piracy haven. If you look at the comments out there and the discussion that is happening online, that’s what everybody feels like. It’s crazy.
JC: Because the FBI and the people that want to prosecute you are alleging, and they’ve used these words, that you are unprecedented. That the scale of your piracy is unprecedented. That there has never been anything like it before in human history, that you are the pirate to beat all pirates.
KD: Yeah. It’s kinda like weapon of mass destructions in Iraq, you know? If you want to go after someone and you have a political goal you will say whatever it takes. These are fabrications and lies. There are a hundred other companies out there that offer the same service like us. Why has not something happened to them?
JC: Can you give me a name? Just name…can you give me a couple of names?
KD: Many sites. Mediafire. It’s based in the US, offers exactly the same service like us.
JC: File-sharing opportunities?
KD: Yeah. Rapidshare, Fileserve, Filesonic. Microsoft has their own service called Skydrive. Google is launching a new service called Drive. Everyone is in this cloud arena, in the same business, has the same problems that we had battling piracy. But we are not responsible for the problem and this is, I think, what everyone needs to understand. Where does piracy come from? Piracy comes from, you know, people, let’s say, in Europe who do not have access to movies at the same time that they are released in the US. This is a problem that has been born within this licensing model and the old business model that Hollywood has where they release something first in one country but they show trailers to everyone around the world pitching that new movie but then the 14-year-old kid in France or Germany can’t watch it for another six months, you know? If the business model would be one where everyone has access to this content at the same time, you know, you wouldn’t have a piracy problem. So it’s really, in my opinion, the government of the United States protecting an outdated monopolistic business model that doesn’t work anymore in the age of the internet and that’s what it all boils down to. I’m no piracy king, I offered online storage and bandwidth to users and that’s it.
KD: When you create something that is popular, when you create a solution, you’re an innovator and you solve problems for people and they like what you have to offer, of course you automatically make money. If you have a product that is popular you make money. I had a product that was very popular.
JC: Why was it popular?
KD: Because people could surpass a lot of limitations. It saved people a lot of money, you know, you don’t need to buy a server to store your files, you can use us to distribute your files. Legal files, you know. You can use us to make a backup online of all your files. There are so many countless, legitimate uses for Megaupload that the piracy element is really just one that is minute and shouldn’t even be the primary focus.
JC: CNET, in an article that looked pretty well researched to me and well sourced said, and I quote, “among the copyright owners who’ve accused Megaupload of piracy, including software and video game companies none of them presented the FBI with more, quote, significant evidence, end quote, about Megaupload than the MPAA. Did any members of the MPAA come to you and say “we have concerns, Kim, about what’s going on in Megaupload”.
KD: Never. And I gotta tell you this – if you are a company that is hurt so much by what we are doing, billions of dollars of damage, you don’t wait and sit and do nothing. You call your lawyers and you try and sue us and try to stop us from what we are doing.
JC: So a cease and desist of some form or other. Did you ever receive any letters from members of the MPAA saying “the latest James Bond film is being exchanged, ad infinitum, through Megaupload, you must stop it”? Did you ever receive…
KD: Absolutely not. No legal document has ever reached us from any of these studios. The only thing that we get is Takedown Notices and them using the direct delete access on our website. So, isn’t it surprising to you that when I’m the pirate king and I’m causing all this damage that none of them has ever even attempted to sue us, to sue us for damages, you know? If you would run a business that loses billions of dollars because of me, you wouldn’t just sit there and do nothing. I mean, this investigation was ongoing for over two years, you know, the company was live for over seven years, the MPAA has always thrown names at us and called us all kinds of things but they’ve never actually done anything to you know, take us to court and for the very simple reason that there is a law in the US that protects us which is the Digital Millennium Copyright Act that protects online service providers from actions of their users and this is the same law that allowed Google to still exist, that allowed YouTube to still exist. You know that Viacom sued YouTube and YouTube claimed that they were protected by the DMCA and they won. And if you look at the YouTube case files, the emails that were exchanged internally we are a lamb compared to what was going on at YouTube at the time but these guys got away. They won their lawsuit and I’m sitting in jail, my house is being raided, all my assets are frozen without a trial, without a hearing. This is completely insane, is what it is.
JC: Why you, then, do you think?
KD: I’m an easy target. 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, you know, I’m an easy target. I’m not Google. I don’t have 50 billion dollars in my account and right now I’ve not a penny on my account. All my lawyers currently are basically working without a penny and they are all still on board and all still doing their job because what they see here is unfair, is unreasonable and is not justice.
JC: What did you think about when you were in jail for a month? Lot of time on your own, right? Did you have a cell to yourself? Did you have to share with anyone?
KD: Yeah, I had a cell to myself and I was primarily concerned about my family, you know, that is mainly what I was thinking about, you know, I have a wife pregnant with twins and it’s just an impossible situation and they keep the anxiety level high, they appealed my bail – I don’t even know on what grounds. It’s just ridiculous.
JC: Are you a flight risk?
KD: Absolutely not.
JC: Is there a helicopter waiting over the hill either literally or metaphorically to come and whisk you off somewhere where you can’t be extradited from?
KD: You know you gotta think about this for a minute, OK? Why would I leave after everything has been frozen, everything has been taken from me. The company that was worth probably a billion dollars plus has been given a death sentence without trial, you know, what point is there for me to run away? The only thing, and the only thing that makes sense and is logical here is to fight this and that’s what I’m going to do. I’m going to fight this all the way and I promise you, and everybody who’s watching this right now, I’m going to win because I’m no criminal and I’ve done nothing illegal.
JC: The FBI indictment, their charges, which is a very long document full of some of the most emotive language I have ever seen…
KD: It’s a press release. An indictment of 72 pages which is so maliciously designed to basically to get a judge and a grand jury in the US to agree to these kinds of actions has been unheard of. Look out there at the professional legal opinions of everyone that has seen this. It’s nothing more but a press release filled with things out of context designed to make me look as bad as possible.
JC: Are you as bad as possible, Kim? Are you a very naughty man who has been making a lot of money for yourself at the expense of content providers who take the risk, who do the work, who make things, only for you to enable people to trade in that stuff so you get rich?
KD: That is complete nonsense. I am an innovator, I create software, I create solutions, I create a website that is popular and that people want to use and have used for a lot of legitimate uses and it is just completely bizarre how I am being put on a pedestal like this and pointed at like the over-pirate of the planet. It’s insane. There is no merit to this.
JC: Do you think you would be in this position if you hadn’t driven around with…saying doctor evil, driving your Mercedes in the Gumball Rally through Europe, behaving in a larger than life way? In a way that draws attention to you, in a way that distinguishes you from the men who run Google who dress like I am dressing and don’t post videos of themselves on YouTube behaving like a lunatic? Is that why you are such a soft target, do you think?
KD: Well first of all let me be clear. Those videos and the things that you see online are not posted there by myself. These videos are 10 years plus old and I am a fun loving guy, OK? I enjoy my life, I have a big kid inside me and I didn’t see any reason why I have to wear a suit and be stuck up. You know, when I have earned my money and, you know, enjoyed my life, fulfilled my dreams, there is nothing wrong with that. And those clips were long before I had a wife and a family and kids, you know, my priorities have changed. I’m a family man, you know, I am not doing these kinds of things – that was childish stuff, and it was fun at the time and I don’t regret it, but that is not me today, I am a different guy. I just want to have a safe future for my kids and, you know, provide my family with a great home and that’s why we moved to New Zealand and we’re really surprised what is going on here.
JC: Is that why you are here? Did you come to NZ to re-invent yourself and to become a family man or did you come to NZ to get away from this kind of stuff, the FBI. Why are you here?
KD: No, I am here because of my family. I have little kids you know we were living in Hong Kong. Hong Kong is a concrete jungle. There is no fresh grass, there are no trees, there are no grills, you know, no birds flying around. I wanted to give my kids an environment of, you know, happiness and nature and peace and that is why we came to NZ. You know, you don’t have nuclear power, you are not on any target list of any nuclear nation, you know, it’s amazing. NZ is a beautiful country, we came here on a holiday, we fell in love and we decided to move here for our kids, to give them a great future.
JC: What’s your future now, Kim?
KD: You know, I mean I am a fighter and I am going to fight this thing. I feel confident I am going to win because at the end of the day I know, my family knows, and everybody around me knows that I am no criminal and I have done nothing wrong. So I will fight it. It’s all I can do.
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9/01/2013 10:30:41 p.m.
It is like saying that HDD companies like Seagate and Maxtor, etc are responsible for the piracy that is sometimes placed on the hard drives.
Or like saying that internet companies are responsible for the piracy because they make a profit from the clients that use the internet to watch illegal movies.
He was a service provider and as long as he took action for every file reported then I don't find it fair to charge him of anything.
25/08/2012 8:12:52 a.m.
This is a clear case of the US government overreaching its legal and legitimate powers to make a sacrificial lamp out of Mr. Dotcom in another country. I am a US citizen and am just appauld at what has happened. This is a purely political agenda forced by the media companies in the USA. I should mention that I am 52 years old and have never downloaded an illegal copy of a music or movie, simply because I am not into this stuff. However, I completely agree with Mr. Dotcom, his position and his defense. If what has happened to him is correct, then the UPS, FedEx, and postal services should be held responsible for illegal items being shipped thru their services. This is as crazy as holding a city responsible for theft or murder happening on its streets. I certainly hope that Mr. Dotcom can defend himself against these outrageous and nonsense charges and come out of all this intact. At this point it should really be the New Zealand courts and government that should come to his aid and put a stop the US Government's bullying.
5/08/2012 10:22:40 p.m.
Maksym Kozub wrote:
While I do not know his real motivation, whether he is a crook, etc., I definitely have more sympathy for him than for The Pirate Bay's owners who keep saying things like "We do not care".
4/07/2012 2:32:06 a.m.
Nick From New York City wrote:
He's great. What a guy. Im sure he knew piracy was happening. But so did YouTube. He's exactly right. But YouTube has in fact gotten in line. (hard to find much copyrighted material there) But Kim seems to be a good person. A hacker who grew up and learned to make a lot of money.
25/06/2012 10:46:58 p.m.
@JAYNE: I have to disagree with you about postal companies. They do make profit from any mail, regardless of its content. They actualy live from it. On the other rewarding someone for popular file doesn't have to be a motivation for piracy. Drivers, independent movies , personal funny videos etc. Most popular downloads can go in cache so they could be downloaded faster. So I see sense in rewarding it (and also it is great motivation to use MU instead of RS, MF, 4Shared...). Ofcourse Kim knew its servers were used for piracy too, but he did what was possible to prevent it. Deleto option was a nice idea in that direction.
8/06/2012 9:56:30 p.m.
joel c wrote:
We may as well just get rid of the entire internet then. Urgh.
2/06/2012 10:02:50 p.m.
DAN: I agree with you that Dotcom's empire is like people sending drugs by mail. The difference is that postal companies do not profit from drugs traffiking, and have a far more stringent detection system in place than Kim's simple 'delete content'button.
The bottom line is that Megaupoload was a business, and an extremely profitable one. Dotcom made money of the files being shared on his website. The more popular a file was, the more views it received, the more moneyhe could make in user subscriptions and advertsing. In fact, Megaupload offered monetary rewards to users uploading 'popular' content.
I don't disagree with you, DAN, that file sharing may be the future of the entertainment industry. It most definitely is. But the profit being made from innovations like file sharing should be coing back to those who hold the copyright for the shared content. i.e: the artists/creators/producers.
Dotcom is an extraordinary man. He is ridiculously intelligent, and was able to use that to make an enormous about of money for delivering a service that people wanted. But that doesn't mean that his website was ethical, and legal. And we should all keep in mind that the man was smart enough to make millions out of a conceptually simple website. He is probably smart enough to defend himself on a technicality as well.
In summary: Dotcom is a very smart man. Smart make himself rich of other peoples movies, music and files; and he is definitely smart enough to fool the general public into thinking that he's the underdog, who has been wronged by that big scary organisation we call a government.
Do not let a very clever media campaign, lots of PR and media training, and a gifted team of attourneys distract you from the facts. Dotcom made money by knowingly distributing other peoples' property. END.
31/05/2012 10:47:23 a.m.
Robin Carpenter JP. wrote:
I think the CIA and America should keep there noise out of New Zealand businesses and stop thinking they own the Internet.
I like Kim Dot com and think its appalling how the New Zealand Government has obtained a search warrant and closed down this high ranking website.
Mr Dotcom in his short time in this country has donated millions of dollars to needy New Zealand People.
Lets get behind Mr Dotcom instead of some knocking him.
What an asset he is two this country.
I would love to meet him some day with his knowledge of internet software he could help so many of us.
I'm sure that if the prime Minister, Mr John key had been informed of what was happening to Kim Dotkom and his New Zealand Business, he would not let this happen to a New Zealand resident, or a New Zealand company.
The prime minister Me Key being the head of the SIS in New Zealand, why was he not informed until the day before the police arrested him and removed the company's assets.
The courts are slowly giving the personal and company's assets back to Mr Dotcom
I feel that they know they made a blunder.
This is past a joke, what New Zealand Company will be next the Americans will wreck?.
Give him his computers back and remove all court proceedings and lets keep to New Zealand law, Not what the CIA in America thinks.
let Mr Dotcom get on and run his business the way he wants to run it and let him be like all other New Zealand Business people,
Tell the Americans to run there own country and stop trying to own the Internet it not theirs to own or to decide what is there Copyright.
God help us if this is what we have two look forward to in the future days of doing business in New Zealand.
Robin Carpenter. JP
17/05/2012 6:26:47 p.m.
We had a Juke box in our hotel with all the latest music (which we paid for ourselves) One day we got a visit from a clown telling us we could not play that music in our bar because we were breaching copyright. Im the wrong person to argue with. He didnt come back again after that visit.
15/05/2012 4:28:54 a.m.
First of all you do have a great justice system there in New Zealand where people can get sent to jail without a trial and without a hearing and where a huge company can get wiped out without a hearing or trial.Other people all around the world follow this and this is not a great advertising for your country.JAYNE wrote: "He may not have breached the copyright himself - but he did knowingly enable it."The post office is also knowingly enable people to send drugs with the mail.Why aren't they sued for being a drug courier?The point of the whole topic is that the music and movie companies are still living in the stone age and still haven't realised that there is something called the internet.Steve Jobs recognised it early and opened the iTunes store which offers MP3 downloads.It reminds me of the postal service.The email came around and instead of getting into the email business they prefered to stay in the past.Now that less and less people send letters they complain about their losses.Typical case of managers who have no idea of the new technology.Why don't the movie and music companies offer a media flatrate for example.Say you pay 25 $ a month and can watch as many movies as you want and listen to as many songs as you want?And the money would be distributed to those whose videos you watched or whose music you listened to.Most people would pay this and the music and movie companies would earn more than ever before.But these retarded people think that people will be buying CDs and DVDs forever not realising that these times are pretty much over.The only people who still buy CDs or DVDs are those with age 40+ but sooner or later these people will die and there are not enough buyers left to support the system.Also thanks to Federal Reserve money fraud system generated inflation people have less and less money in their pockets and just aren't willing or even aren't able to pay 25 $ for a DVD anymore.
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