May 19, 2020

Why the FBI, MPAA & RIAA are Fighting a Losing Battle

Bizclik Editor
3 min
Why the FBI, MPAA & RIAA are Fighting a Losing Battle

Written by Chris Ward

For the past week the news has been awash with the story of Megaupload, its owner Kim DotCom and its ‘racketeering and money laundering’ directors. The exemplification of the cyberocker website seems to have had its desired effect, at least in the short term, as similar websites have tightened their policies in reaction. Certain sites, such as Filesonic and Fileserve, have even prevented users from downloading files uploaded by others.
Why Megaupload was targeted where other websites were not will remain the knowledge of the FBI for the time being. Inevitably there will be a long ensuing court case, and it will be some time before the outcome has been decided. The Megaupload operation was of course heavily backed by the Motion Picture Association of America (MPAA) and Recording Industry Association of America (RIAA). No doubt they will view this as a major coup over the world of piracy, but in the long term it will have arguably little effect.
The fact that companies such as Megaupload make a profit from illegal filesharing is a subject of much contention. However, if there was a better developed infrastructure that offered an equally convenient, legitimate alternative, there would not be such opportunity for illegal services to operate. The money that is spent trying to eradicate services such as Megaupload could be better invested in subsidizing such an infrastructure, as well as supporting content creators that are hit worst by piracy.
According to a recent report published in New Media Age (NMA), consumers are becoming increasingly willing to pay for online movie and TV content. This is partly thanks to streaming services such as Netflix and LOVEFiLM, which are starting to offer a larger catalog of content at a reasonable price. The recent integration of these services with Xbox and PS3 will only facilitate further the conversion of users from illegal to legitimate services, but a complete solution is still a long way off and such services need a large uptake and support in order to succeed. As NMA editor Justin Pearse points out:
Make it easy and people will pay, make it useful and they’ll keep paying. The refusal of people to pay for anything in digital is a bit of a self- defeating truism. Most people, most of the time, are happy to pay for anything.
This considered, perhaps it would be more worthwhile for the likes of the US (and other) Governments, the MPAA and the RIAA to focus on supporting legitimate services, rather than trying to wipe out the illegal ones. Removing sites such as Megaupload will not stop online pirates, it will function only to push them deeper into anonymous ‘darknets,’ such as the Tor Project. Once people are part of an anonymous service that cannot be tracked, it may be harder to convert them to users of legitimate services. The recent opposition to the SOPA and PIPA bills should act as a warning of the consequences that punitive filesharing legislation could have, such as the increased use of darknets.
Ultimately, it is legitimate streaming services that will reduce online piracy. For the time being, organizations such as the MPAA and RIAA are spending money fighting a losing battle; money that could be better invested in lawful services that would help to bring in more revenue for content creators. Piracy cannot be ignored, but an equally convenient, legal alternative for online video needs to be in place before it is targeted with laws and court cases.
Follow Chris on Twitter: @_chrisw

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May 15, 2021

M&A activity key lever for future tech sector growth

Kate Birch
2 min
With M&A activity in the technology sector soaring, dealmaking is likely to be the key lever for growth as businesses look to recover post-pandemic

Despite the continuing uncertainty of the pandemic, the tech sector has witnessed soaring dealmaking activity over the past year, rocketing in the second half of 2020, with the last quarter of 2020 a record one for M&A activity, and momentum continuing into 2021.

Dealmaking in tech sector soars in past year

And the latest figures bear this out with the number of technology M&A deals totalling US$208.44bn globally in Q1 2021, according to GlobalData. While the US holds top spot both in volume of deals (1034) and total value (US$140.61bn), Europe ranked next with 649 deals (US$44.49bn) with the UK continuing its reign as Europe’s biggest M&A market with 204 deals.

In particular, megadeals – those valued at US$5bn or more – soared in 2020 representing 59% of all global technology sector deal value in 2020, up from 47% in 2019, according to the latest edition of the EY Technology Global Capital Confidence Barometer.

This tech sector trend towards megadeals is backed up by EY’s CCB data, with 16% of tech sector respondents planning to pursue transformative deals valued at US$5bn or more in the near-term.

While technology deal activity “all but stopped at the beginning of 2020 after fluctuating between historic highs and lows, companies pivoted quickly and tech M&A exploded in the second half of the year”, says Barak Ravid, EY Global TMT Leader for Strategy and Transactions. 

M&A activity level for tech sector growth

Looking ahead to the future, technology executives are optimistic, with nearly half (47%) expecting profitability to fully rebound this year, according to CCB data, compared to 23% across all sectors, and with more than half (51%) planning to pursue M&A in the next year in order to sustain growth.

According to Ravid, M&A activity is increasingly becoming a key lever for growth as businesses look to recover.

“To position themselves for future revenue growth, tech companies are now adjusting their M&A strategy to focus more on a target’s business resilience, digital technology alignment and to gain market share through consolidation,” says Ravid.

However, with an increasingly competitive deal market and ongoing geopolitical tensions, the majority of tech execs expect to see more competition in the bidding process for assets over the next year, primarily from private capital.

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