Microsoft-funded Russian Startup Aims To Stop Net Piracy
May 15, 2012

Microsoft-funded Russian Startup Aims To Stop Net Piracy

A Microsoft-funded Russian startup company has developed a new technology to stop the downloading of pirated content.

The company, Pirate Pay, said it has already worked with Walt Disney Studios and Sony Pictures to stop “tens of thousands” of illegal downloads on sites such as BitTorrent.

Film and music industries have long seen BitTorrent as a major threat to their business, claiming the site costs them billions in lost revenue each year.

But Pirate Pay says its system can prevent these losses by posing as legitimate BitTorrent users, then “confusing” peer-to-peer networks in a way that results in disconnections, making it impossible for people to share files.

Critics of the company say the method will ultimately be ineffective, while others question the true extent of the financial impact of peer-to-peer file sharing networks to Hollywood and other content providers.

The idea for Pirate Pay began three years ago when developers were creating a traffic management solution for Internet service providers.  The technology worked well, and the developers soon realized it could also be used to overwhelm peer-to-peer networks with false information.  That gave them the idea of marketing the system as a solution to prevent the illegal pirating of Internet content.

“After creating the prototype, we realized we could more generally prevent files from being downloaded, which meant that the program had great promise in combating the spread of pirated content,” said Andrei Klimenko, Pirate Pay´s chief executive, in an interview with Russia Beyond the Headlines.

The technology received high praise from the president of Microsoft Russia, and the software giant decided to invest $100,000 in the tech startup.

Pirate Pay used the funds to continue its anti-piracy work, and won its first customers -- Walt Disney Studios and Sony Pictures -- last December.

For one month, Pirate Pay´s system protected the film “Vysotsky. Thanks to God, I´m alive,” with relative success.

“We used a number of servers to make a connection to each and every P2P client that distributed this film. Then Pirate Pay sent specific traffic to confuse these clients about the real IP-addresses of other clients and to make them disconnect from each other,” said the 29-year-old Klimenko.

Pirate Pay says it blocked 44,845 attempted illegal downloads of the film, although there is no way of knowing whether the blocked downloaders simply tried again later.

The company did not disclose its earnings from the “Vysotsky” assignment, but said that projects typically cost clients between $12,000 and $50,000, depending on the resources required.

“We try to conduct deals with a profit margin,” said Klimenko.

“However, significantly more is currently being spent on development than what we are earning, and thus there is not yet an opportunity to recoup our expenses from revenue.”

Pirate Pay says it plans to consolidate its place in the Russian market over the next couple of years, and then expand internationally.

Critics of Pirate Pay´s technique, such as security researcher Richard Clayton from the University of Cambridge, say the technology will only work in the short term.

"If you flood the network with lots of lies, then you will be short of real things,” he said in an interview with BBC News.

"[But] the networks are robust about this in the long term because you will say to your peer 'please give me this data', and when it gives you the data it will say 'this doesn't match' and throw it away."

Clayton, who writes about issues of Internet security, said peer-to-peer networks would ultimately adapt, sharing information about "bogus" peers such as those used by Pirate Pay.

"You don't solve social issues with technical fixes,” he said.

"The social issue here is that a lot of people think that the legal offerings are too expensive and don't provide what they want.”

"Once you solve that, nobody's going to want to mess around with complicated bits of software to get what they need."