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Peer-To-Peer News - The Week In Review - February 19th, 22
"I’m not pirating- I’m updating my library." – chrslp
February 19th, 2022
Senator Blumenthal, After Years Of Denial, Admits He's Targeting Encryption With EARN IT
Senator Richard Blumenthal has now admitted that EARN IT is targeting encryption, something he denied for two years, and then just out and said it.
Since the very beginning many of us have pointed out that the EARN IT Act will undermine encryption (as well as other parts of the internet). Senator Richard Blumenthal, the lead sponsor on the bill, has insisted over and over again that the bill has nothing to do with encryption. Right after the original bill came out, when people called this out, Blumenthal flat out said "this bill says nothing about encryption" and later claimed that "Big Tech is using encryption as a subterfuge to oppose this bill."
That's been his line ever since -- insisting the bill has nothing to do with encryption. And to "show" that it wasn't about encryption, back in 2020, he agreed to a very weak amendment from Senator Leahy that had some language about encryption, even though as we pointed out at the time, that amendment still created a problem for encryption.
The newest version of EARN IT replaced Leahy's already weak amendment with one that is a more direct attack on encryption. But it has allowed slimy "anti-porn" groups like NCOSE to falsely claim that it has "dealt with the concerns about encryption." Except, as we detailed, the language of the bill now makes encryption a liability for any web service, as it explicitly says that use of encryption can be used as evidence that a website does not properly deal with child sexual abuse material.
But still, through it all, Blumenthal kept lying through his teeth, insisting that the bill wasn't targeting encryption. Until yesterday when he finally admitted it straight up to Washington Post reporter Cat Zakrzewski. In her larger story about EARN IT, I'm not sure why Zakrewski buried this point all the way down near the bottom, because this is the story. Blumenthal is asked about the encryption bit and he admits that the bill is targeting encryption:
Blumenthal said in an interview that lawmakers incorporated these concerns into revisions, which prevent the implementation of encryption from being the sole evidence of a company’s liability for child porn. But he said lawmakers wouldn’t offer a blanket exemption to using encryption as evidence arguing companies might use it as a “get-out-of-jail-free card.”
In other words, he knows that the bill targets encryption despite two whole years of blatant denials. To go from "this bill makes no mention of encryption" to "we don't want companies using encryption as a 'get-out-of-jail-free card'" is an admission that this bill is absolutely about encryption. And if that's the case, why have their been no hearings about the impact this would have on encryption and national security? Because, that seems like a key point that should be discussed, especially with Blumenthal admitting this thing that he denied for two whole years.
During today's markup, Blumenthal also made some nonsense comments about encryption:
The treatment of encryption in this statute is the result of hours, days, of consultation involving the very wise and significant counsel from Sen. Leahy who offered the original encryption amendment and said at the time that his amendment would not protect tech companies for being held liable for doing anything that would give rise to liability today for using encryption to further illegal activity. That's the key distinction here. Doesn't prohibit the use of encryption, doesn't create liability for using encryption, but the misuse of encryption to further illegal activity is what gives rise to liability here.
This is, beyond being nonsense word salad, just utterly ridiculous. No one ever said the bill "prohibited" encryption, but that it would make it a massive liability. And he's absolutely wrong that it "doesn't create liability for using encryption" because it literally does exactly that in saying that encryption can be used as evidence of liability.
The claim that it's only the "misuse of encryption" shows that Senator Blumenthal (1) has no clue what he's talking about and (2) needs to hire staffers who actually do understand this stuff, because that's not how this works. Once you say it's the "misuse of encryption" you've sunk encryption. Because now every lawsuit will just claim that any use of encryption is misuse and the end result is that you need to go through a massive litigation process to determine if your use of encryption is okay or not.
That's the whole reason why things like Section 230 are important, because they avoid having every company have to spend over a million dollars to prove that the technical decision they made were okay and not a "misuse." But now if they have to spent a million dollars every time someone sues them for their use of encryption, then it makes it ridiculously costly -- and risky -- to use encryption.
So, Blumenthal is either too stupid to understand how all of this actually works, or as he seems to have admitted to the reporter despite two years of denial, he doesn't believe companies should be allowed to use encryption.
EARN IT is an attack on encryption, full stop. Senator Blumenthal has finally admitted that, and anyone who believes in basic privacy and security should take notice.
Oh, and as a side note, remember back in 2020 when Blumenthal flipped out at Zoom for not offering full end-to-end encryption? Under this bill, Zoom would be at risk either way. Blumenthal is threatening them if they use encryption and if they don't. It's almost as if Richard Blumenthal doesn't know what he's talking about regarding encryption.
Key Senators Have Voted For The Anti-Encryption EARN IT Act
The Graham-Blumenthal bill is anti-speech, anti-security, and anti-innovation.
Earlier today, the Senate Judiciary Committee voted to advance the dangerous EARN IT bill. We’re disappointed to see the committee advance this misguided bill. If enacted, EARN IT will put massive legal pressure on internet companies both large and small to stop using encryption and instead scan all user messages, photos, and files.
The bill could now be voted on by the full Senate at any time, or worse, included as part of a different “must-pass” legislative package. We need you to contact your representatives in Congress today to tell them to vote against this bill.
We have expanded our action tool to contact both Senators and members of the House of Representatives. If you have already taken our action to contact your Senators, please take it again to make sure you contact lawmakers in both houses.
EARN IT Would Punish Companies That Use Encryption
The bill sponsors have falsely stated that the EARN IT Act is needed to protect children. But the kind of abusive images they’re concerned about are already highly illegal under federal law. Any internet platforms that knows about child sexual abuse material (CSAM) being distributed or received are required to take action on it, and can be prosecuted if they do not.
EARN IT will allow states to lower the legal standard required for prosecutions over CSAM, and it will let the use of encryption be evidence in lawsuits and criminal trials. The overt goal of EARN IT is to pressure internet companies to start doing widespread scanning of user messages and photos. This scanning is incompatible with strong encryption.
The harms will fall on the most vulnerable people. Once we allow encryption to be compromised to scan for CSAM,, authoritarian regimes will demand the same capabilities to track information shared by activists and journalists. People subject to domestic abuse, including children, won’t have secure channels of communication to report and reach out for trusted help.
We’re glad to see that several senators echoed concerns raised by human rights groups throughout the U.S. and the world. They suggested they might not support the bill if it doesn’t strike a proper balance between fighting crimes against children, and user rights to privacy and encryption.
But the current bill does not “strike a balance” because there isn’t one to strike. The sponsors of the bill have made it clear they want to surveil user messages, and have even distributed literature suggesting which software they prefer be used.
EARN IT threatens to punish companies that don’t start following a specific list of law enforcement demands. Among them: start scanning messages. End-to-end encryption is simply not compatible with the type of surveillance that states will demand, and that the bill’s sponsors have explicitly suggested. Just this week, bill sponsor Sen. Richard Blumenthal told The Washington Post that he rejected the idea of creating a broad exemption in the bill for the use of encryption, because he didn’t want encryption to be a “get out of jail free card.”
We can still stop this bill if there’s enough public pushback. We all have a right to privacy, and to use encrypted services to protect our privacy. Don’t let Congress take that away.
Anti-Encryption Bill Passes Senate Judiciary Committee
Over 60 organizations spoke out against the new bill which could threaten encryption and incentivize increased surveillance.
The controversial anti-encryption bill masquerading as a child safety initiative known as the EARN IT Act refuses to die. A new version of the bill recently clawed its way out of a warm, shallow grave and passed the Senate Judiciary Committee on a voice vote on Thursday. Now, the reintroduced bill will head to the Senate floor.
The bill, as advertised, would remove some long-held Section 230 protections. In particular, it would mean that a company can be found legally liable for child sexual abuse material (or CSAM) that’s uploaded to their systems by third parties. Those in favor of the bill claim removing these protections will force internet companies to take a more active role in identifying and reporting the real problem of CSAM material. If passed by both houses of Congress, the bill could potentially open these companies up to a flurry of lawsuits. Democratic Senator Richard Blumenthal, who co-sponsored the bill with Republican Senator and Trump lackey Lindsey Graham, claimed the bill “is very simply about whether tech companies should be held responsible for their complicity in the sexual abuse & exploitation of children.”
But that description only tells one, deceptively limited side of the story. Civil liberty and digital rights groups have spoken out in droves against the bill, claiming it would roll back privacy protections for internet users and incentivize internet companies to engage in dangerous levels of surveillance and censorship far exceeding the purview of CSAM material.
“Let’s be clear,” the Electronic Frontier Foundation said in a statement, “The new EARN IT Act would pave the way for a massive new surveillance system, run by private companies, that would roll back some of the most important privacy and security features in technology used by people around the globe.” The bill could also have huge implications for the end-to-end encryption systems which have become more common in major messaging services.
The bill’s whittling away of privacy protections could potentially affect everyone but poses a particularly powerful threat to the LGBTQ community whose posts are disproportionately mislabeled as sexual content. The EARN IT act, critics warn, would potentially follow in the footsteps of previous Trump-era Section 230 changes FOSTA-SESTA, which had a significant negative impact on the LGBTQ community and sex workers.
“The EARN IT Act is one of the most poorly conceived and dangerous pieces of Internet legislation I have seen in my entire career, and that’s saying a lot,” Fight for the Future’s Director, Evan Greer said in a statement
In an interview with the Washington Post, Blumenthal said the zombie EARN IT Act would prevent encryption from being the “sole evidence” of a providers’ liability for CSAM material but added the bill would not offer total exemption encryption either. Blumenthal reportedly referred to encryption exemption as a “get-out-of-jail-free card.” In other words, Blumenthal is saying that a company can’t be sued over CSAM just because they use encryption but he’s admitting that companies won’t be able to claim that their inability to see into encrypted communications exempts them from liability. Okay.
Somewhat reassuringly, the new bill may still undergo some changes before it’s voted on in the Senate according to Center for Democracy & Technology CEO Alexandra Reeve Givens, who said a collection of senators, including Democrats Cory Booker and Republican Mike Lee voiced concerns and urged changes to the bill.
Concerned internet users have made their opinion about the EARN IT Act clear. A petition opposing the bill was recently uploaded by the digital rights group Fight for the Future and has amassed nearly 600,000 signatures at the time of writing. Meanwhile, more than 60 organizations including the Center for Democracy and Technology, the ACLU, and Access Now, jointly sent a letter to senators Dick Durbin and Chuck Grassley.
“By opening providers up to significantly expanded liability, the bill would make it far riskier for platforms to host user-generated content,” the organizations wrote. “Those liability threats could cause providers to stop hosting user content altogether. On the other hand, providers that do continue to host users generated content would potentially have more of an incentive to engage in overbroad censorship of online speech,” particularly of LGBTQ users. And while EARN IT proponents continually fall back on the bill’s supposed boon for child safety online, rights groups argue the bill would actually make it more difficult to protect children.
Senators: CIA has Secret Program that Collects American Data
The CIA has a secret, undisclosed data repository that includes information collected about Americans, two Democrats on the Senate Intelligence Committee said. While neither the agency nor lawmakers would disclose specifics about the data, the senators alleged the CIA had long hidden details about the program from the public and Congress.
Sens. Ron Wyden of Oregon and Martin Heinrich of New Mexico sent a letter to top intelligence officials calling for more details about the program to be declassified. Large parts of the letter, which was sent in April 2021 and declassified Thursday, and documents released by the CIA were blacked out. Wyden and Heinrich said the program operated “outside the statutory framework that Congress and the public believe govern this collection.”
There have long been concerns about what information the intelligence community collects domestically, driven in part by previous violations of Americans’ civil liberties. The CIA and National Security Agency have a foreign mission and are generally barred from investigating Americans or U.S. businesses. But the spy agencies’ sprawling collection of foreign communications often snares Americans’ messages and data incidentally.
Intelligence agencies are required to take steps to protect U.S. information, including redacting the names of any Americans from reports unless they are deemed relevant to an investigation. The process of removing redactions is known as “unmasking.”
The CIA on Friday said the program highlighted by the senators and another disclosed this week are “repositories of information about the activities of foreign governments and foreign nationals.” In a statement, the agency said the programs were classified to stop adversaries from compromising them.
The agency also said it kept members of congressional oversight committees “fully and currently informed of its classified activities related to these two programs.”
“In the course of any lawful collection, CIA may incidentally acquire information about Americans who are in contact with foreign nationals,” the agency statement said. “When the CIA acquires information about Americans, it safeguards that information in accordance with procedures approved by the Attorney General, which restrict the CIA’s ability to collect, retain, use, and disseminate the information.”
The CIA released a series of redacted recommendations about the program issued by an oversight panel known as the Privacy and Civil Liberties Oversight Board. According to the document, a pop-up box warns CIA analysts using the program that seeking any information about U.S. citizens or others covered by privacy laws requires a foreign intelligence purpose.
“However, analysts are not required to memorialize the justification for their queries,” the board said.
Additional documents released Thursday also revealed limited details about a program to collect financial data against the Islamic State. That program also has incidentally snared some records held by Americans.
Both Wyden and Heinrich have long pushed for more transparency from the intelligence agencies. Nearly a decade ago, a question Wyden posed to the nation’s spy chief presaged critical revelations about the NSA’s mass-surveillance programs.
In 2013, Wyden asked then-Director of National Intelligence James Clapper if the NSA collected “any type of data at all on millions or hundreds of millions of Americans.” Clapper initially responded, “No.” He later said, “Not wittingly.”
Former systems administrator Edward Snowden later that year revealed the NSA’s access to bulk data through U.S. internet companies and hundreds of millions of call records from telecommunications providers. Those revelations sparked worldwide controversy and new legislation in Congress.
Clapper would later apologize in a letter to the Senate Intelligence Committee, calling his response to Wyden “clearly erroneous.”
According to Wyden and Heinrich’s letter, the CIA’s bulk collection program operates outside of laws passed and reformed by Congress, but under the authority of Executive Order 12333, the document that broadly governs intelligence community activity and was first signed by President Ronald Reagan in 1981.
“It is critical that Congress not legislate without awareness of a ... CIA program, and that the American public not be misled into believe that the reforms in any reauthorization legislation fully cover the IC’s collection of their records,” the senators wrote in their letter. There was a redaction in the letter before “CIA program.”
Intelligence agencies are subject to guidelines on the handling and destruction of Americans’ data. Those guidelines and laws governing intelligence activity have evolved over time in response to previous revelations about domestic spying.
The FBI spied on the U.S. civil rights movement and secretly recorded the conversations of Dr. Martin Luther King. The CIA, in what was called Operation Chaos, investigated whether the movement opposing the Vietnam War had links to foreign countries.
“These reports raise serious questions about the kinds of information the CIA is vacuuming up in bulk and how the agency exploits that information to spy on Americans,” Patrick Toomey, a lawyer for the American Civil Liberties Union, said in a statement. “The CIA conducts these sweeping surveillance activities without any court approval, and with few, if any, safeguards imposed by Congress.”
Big Tech Sold Out on Its Promise of an Open Internet
A new report from the Tech Oversight Project shows how tech giants have shifted their priorities under the threat of antitrust action.
2021 was a bad PR year for Big Tech. Lawmakers, advocates, and scholars filled pages of books and held hours of hearing exalting what they viewed as an industry being strangled by a handful of players using anti-competitive practices to solidify their position as kings. Ironically, those exact same tactics were vehemently opposed by the Big Tech companies themselves less than a decade ago. Like an aging punk throwing out their raggedy jean jacket for a blazer, Big Tech sold out.
That’s according to a new report by the Tech Oversight Project shared exclusively with Gizmodo. The report—titled Whiplash: Inside Big Tech’s Open Internet Flip-Flop—lays out a laundry list of times where Big Tech companies have seemingly expressed support for many of the same policy goals they’re currently fighting to quash. It also comes as Congress muses over several key pieces of antitrust legislation taking aim at Big Tech’s alleged monopolistic business practices.
The report spotlights Google, Amazon, and Facebook’s fierce defense of net neutrality in 2014 where the companies repeatedly cited an “open internet” as a critical component to innovation and economic growth. Tech’s biggest players, as a New York Times article from the time states, “put their reputations and financial clout behind the challenge.”
These high-minded priorities for an open internet were shouted from the rooftops by Big Tech’s most prominent voices at the time. “The internet has created this remarkable set of free markets, open competition, and competitive growth, and we need to keep it free and open,” Former Google CEO Eric Schmidt said in a 2007 address to the Progress and Freedom Foundation Aspen Summit. “It’s actually important!” Then, in a 2017 Facebook post that’s almost laughably absurd hearing it now, Meta CEO and aspiring Metverse overlord Mark Zuckerberg espoused the urgent need to “keep the internet free and open.”
Now, both of those companies are among the top opponents of burgeoning antitrust measures.
So what changed? Well, according to the Tech Oversight Project’s Executive Director, Sacha Haworth, Big Tech somewhere along the way saw an avenue to entrench their status and in doing so chose money and consolidation over their past principles.
“These Big Tech platforms endorsed an open internet when it suited them and now that they are monopolies they want to effectively close the door and lock it behind them to prevent anyone else from becoming as successful as they have been,” Haworth said. Haworth went on to draw a through-line between Big Tech’s skyrocketing market valuations and their pivot toward gatekeeping business practices. At the time of writing, Apple, Microsoft, and Alphabet had achieved valuations of $3 trillion, $2.2 trillion, and $1.8 trillion respectively.
The recently launched Tech Oversight Project sees brewing antitrust legislation as a key component to reigning back Big Tech’s influence. The group, which The Washington Post notes receives funding from eBay founder Pierre Omidyar’s left of center Omidyar Network, told Gizmodo it’s focused on a campaign-style approach to holding tech behemoths accountable. That push comes on the heels of increased spending and lobbying efforts from tech giants.
The Tech Oversight Project sees a strong public appetite for antitrust efforts. The organization pointed Gizmodo towards a new Data for Progress poll where 71% of Democrats and 44% of Republican likely voters said they supported the American Innovation and Choice Online (AICO) Act, one of the new antitrust measures. Other polling released this week from Morning Consult found that 38% of adults thought the federal government should regulate tech more, compared to 29% in 2019. And unlike most other issues, antitrust has broad bipartisan support, both among the public and with lawmakers, which has made it all the more appealing for groups looking for ways to direct Big Tech’s influence.
“Companies like Google, Amazon, Facebook, and Apple prove themselves hypocritical monopolists time and time again,” Tech Oversight Project spokesperson Kyle Morse said. “We deserve a level playing field and clear rules of the road that encourage competition, spark the next big idea, and provide consumers with a choice in how they use the internet.”
Big Tech’s supposed policy flip-flopping goes beyond milk toast statements or blog posts. Last month, in the days leading up to the Senate Judiciary Committee’s mark-up of the American Innovation and Choice Online Act, Apple and Google, in particular, spoke out publicly against the bill with Google saying the antitrust efforts would somehow “break” many of its most used services. The giants were so concerned that CEOs Sundar Pichai and Tim Cook reportedly personally contacted multiple lawmakers urging them to oppose the legislation. Similar frantic calls to lawmakers were dished out last year after a bipartisan group of House members introduced five antitrust bills taking direct aim at the companies.
Those specific cases are part of a much broader lobbying effort involving staggering amounts of cash. Big Tech lobbying shot up last year once antitrust efforts began gaining more steam, particularly among the companies most likely to find themselves on the receiving end of pro-competition policies. Last year, Meta reportedly spent an all-time high record of $20.1 million on lobbyists while Alphabet spent around $9.6 million. Alphabet’s spending marked a 27.5% increase from the previous year. Meta and Amazon meanwhile both increased their lobbying expenditures by 7% compared to 2020 figures. Apple, for what it’s worth, spent slightly less in 2021 despite a relatively high level of scrutiny from lawmakers and regulators.
All that money waving has contributed to the fracturing of the tech industry writ large which collectively once shared a broader set of policy interests. That change was made clear late last year following the death of The Internet Association which once stood largely unchallenged as the tech industry’s top lobbying arm. Part of IA’s downfall came because its biggest previous members, like Meta and Alphabet, were reportedly at odds with smaller, and even not-so-small firms who wanted the lobbying firm to advocate for more open internet policies.
2021 was the year academics and lawmakers proved there’s an appetite for antitrust. Now, in 2022, those same forces will have to prove if that appetite is enough to ward off what’s shaping to be a year of combative pushback from some of the country’s most powerful companies.
“The tectonic plate has shifted away from smaller companies that have fought against some of these anti-competitive practices monopolizers engage in,” Haworth said. “There’s a reorientation of alliances here with the monopolies fighting to maintain their monopolies, versus pretty much everyone else.”
Nintendo Enemy Bowser Scores 3-Year Prison Sentence For Selling Switch Hacks
It seems Bowser always has Princess Peach locked up in another castle, and he really should be held accountable for that. There's also a real life Bowser linked to Nintendo, but in a much different way. His name is Gary Bowser, and he just received a 40-month prison sentence for his role in creating and selling hacking software used to pirate Nintendo Switch games.
This moment was a long time coming. The US Department of Justice arrested Bowser in October 2020 and accused him of being one of the ringleaders of Team Xecuter, a notorious hacking group that built and profited from mod chips and jailbreaking software for popular game consoles from Sony, Microsoft, and Nintendo. Or as the DoJ dubbed the organization, a criminal enterprise.
The hacking group was initially adamant that its hardware and software modifications that circumvented copyright protections were intended for homebrew application development, not to enable users to steal software. That may have been partially true (with a *wink* *wink* and *nudge* *nudge*). Nevertheless, Bowser plead guilty last November to two of the nine charges the DoJ brought against him.
Following the guilty plea, Bowser settled a civil lawsuit with Nintendo to the tune of $10 million, on top of the $4.5 million in restitution he already owed. He also agreed to hand over any online registries and domain names associated with Team Xecuter, and to never "directly or indirectly" infringe on Nintendo's copyrights in the future.
Those hefty penalties aside, Bowser still faced up to 10 years in prison. He got a few months over 3 years instead, for which Nintendo thanked the prosecution team.
"Nintendo appreciates the hard work and tireless efforts of federal prosecutors and law enforcement agencies to curb illegal activities on a global scale that cause serious harm to Nintendo and the video game industry," Nintendo said.
"In particular, Nintendo would like to thank the Federal Bureau of Investigation (FBI), Homeland Security Investigations (HSI) of the Department of Homeland Security, the US Attorney’s Office for the Western District of Washington, the US Department of Justice’s Computer Crime and Intellectual Property Section, and the Justice Department’s Office of International Affairs for their significant contribution and assistance," the company added.
Nintendo Has A History Of Disparaging Third-Party ROMs And Emulators
It's well known Nintendo is not a fan of the ROM scene and is ultra-protective of its IP. Not just in theory, but in practice—it has a history of suing ROM sites, one of which led to a massive $12 million infringement judgement.
Nintendo makes its stance crystal clear in an FAQ on its website. In it, Nintendo rails against mod chips and emulators, and counters popular arguments in favor of ROMs. In no uncertain terms, Nintendo says "downloading ROMs from direct download sites, linking sites or other illegal sources, even when you own a copy of the video game, is not allowable under the Copyright Act." It reiterates this sentiment in the legal section of its Australian port where it says, "It is illegal to download a Nintendo ROM from the internet whether or not your own an authentic copy of the game."
MoviePass is Officially Coming Back
This time without the firm that ran it into the ground
Two years after the wildly popular subscription service MoviePass crashed and burned, its co-founder Stacy Spikes is determined to bring it back. Spikes says MoviePass will return this summer.
The company, recently bought by Spikes after his unceremonious ouster from MoviePass in 2018, held its launch event today at the Walter Reade Theater at Lincoln Center in NYC. Spikes began by wasting absolutely no time addressing the Helios and Matheson Analytics-shaped elephant in the room. The firm is now infamous for being the parent company of MoviePass that managed to blow the entire thing up shortly after the firm bought the startup, which became famous for offering unlimited movie tickets for a monthly fee.
“A lot of people lost money, a lot of people lost trust,” Spikes said, claiming he was among those who were hurt by the company’s mismanagement. During the opening moments of the event, Spikes oscillated between addressing the disappointment of being pushed out of his company, joking about MoviePass’ loyal consumers — as well as its power users, who Spikes cracked are the reason the company went out of business — and finally, the process of snapping the company back after its parent company went bankrupt in 2020.
“We’re looking at this from another point of view,” Spikes said of the company’s relaunch, adding that he now plans to run the business like a “co-op.” Spikes added that MoviePass users will be able to hold partial ownership of the company, with its most premium tier inclusive of a lifetime subscription.
The event was at times a little bizarre, with muted clapping audible when Spikes paused to make sure his jokes and proposals were landing with live attendees. Spikes sounded at times more like he was delivering an enthusiastic Ted Talk about theatrical releases than a product launch. He hyped the relaunch under his new vision, which, he says, will be “powered by web3 technology.”
“Moviegoing is not going anywhere; cinema is not going anywhere,” Spikes said.
The company’s original engineering team is returning for the business’s relaunch, according to Spikes, and the service will launch this summer. Under the new model, MoviePass will run on tradable credits that roll over month to month. Subscribers will also be able to use their credits to bring a friend, a markedly different approach from the single-user card system that MoviePass used previously, which could prove annoying for non-cardholders.
MoviePass 2.0 will also work on a tiered system, Spikes said. Spikes shared images of a beta version of the new app and the credit-based system, which will vary based on things like peak moviegoing hours. MoviePass’ ambitions for subscribers are, charitably, ambitious. Spikes wants to claim 30 percent of the moviegoer market by 2030, MoviePass’ “moonshot” goal.
Somewhat unsurprisingly, MoviePass will incorporate aspects of Spikes’ existing business PreShow, a technology that has been used to allow gamers to trade ad views for in-game currency. (This sort of format for moviegoing was previously teased by Spikes to Insider.) The way that PreShow works is that you have to actually view the ad — it tracks whether your attention is trained on your phone. Once users “complete the PreShow,” they’ll be awarded credits that can then be used to buy tickets through the MoviePass platform.
Spikes told attendees at the event that MoviePass’ most loyal fans will be “deputized” to beta users and will be able to use the experience for its first year for free. At some point during the summer, these users will be contacted about the beta programming.
Launched in 2011 with a small team of developers and headed by co-founder Spikes, MoviePass’ second life follows a series of comically disastrous failures under the direction of Helios and Matheson Analytics. The firm bought a majority stake in the company in 2017 and, subsequently, ran it straight into the ground.
Spikes was fired from his own company by Helios and Matheson Analytics executives Ted Farnsworth and Mitch Lowe in 2018, reportedly for raising concerns about the service’s unsustainable $10-per-month payment structure (which was meant to be temporary, according to Spikes). Shortly thereafter, the service began imploding — it was hemorrhaging money, the service underwent abrupt changes, and the app sometimes didn’t work at all (which was later reported to be intentional). The service eventually shut down in 2019, and Helios and Matheson Analytics filed for bankruptcy the following year.
Then, last winter, Spikes bought back the company and announced plans to relaunch the service. Speaking at the time with Insider’s Jason Guerrasio, who covered the MoviePass saga extensively, Spikes said that the decision to buy back the brand he helped form “was encouraged by the continued interest from the moviegoing community.”
He added, “We believe, if done properly, theatrical subscription can play an instrumental role in lifting moviegoing attendance to new heights.”
Spikes seemed to shrug off existing subscriptions launched by individual theater chains, instead suggesting that MoviePass would offer more options and more flexibility than a single exhibitor could. Since MoviePass folded, plenty of theaters have launched their own power user subscription models that will compete directly with a now-late-to-the-party MoviePass. MoviePass will also have to convince these exhibitors to sign on, something they were initially prickly about in a pre-pandemic market.
A lot has changed for movie theaters since MoviePass shut down in 2019 — and a lot will have to change for MoviePass, too, if it wants this second run to have a better ending.
MoviePass will Track People’s Eyes Through their Phone’s Cameras to Make Sure they Don’t Look Away from Ads
MoviePass head Stacy Spikes said that they wanted to avoid people putting down the phone and avoiding the ads
MoviePass, a service that let users watch movies inexpensively but shut down in 2019, is returning as an app that will track users’ eyes when they watch adverts.
The new service will use facial recognition and eye-tracking technology to ensure that viewers eyes are looking at promoted content in exchange for access to films.
“It’s a way to close that loop and make it far more efficient of a system,” co-founder Stacy Spikes said, as reported by Motherboard.
“I want to be able to see it for free. Advertisers have put a pre-show together not unlike what you’d normally see when you go to a movie theater but this is customized for you.”
The tracking will happen only on the user’s device with the digital currency then going to a virtual wallet. The facial recognition algorithm, using the phones’ cameras, will make sure the user is not ignoring the advert.
“As I’m looking at it, it’s playing back. But if I stop and I’m not paying attention to it, it actually pauses the content,” Spikes said.
“We had an early version of this where you know what happened. People put the phone down and left and didn’t pay any attention to it. Right now 70 percent of video advertising is unseen. This is a way that advertisers get the impact they’re looking for but you’re also getting the impact yourself.”
In the future, people would be able to buy products that were advertised to them through the MoviePass app and earn more credits to watch more films. It is reported that this technology will be available in the summer.
MoviePass shut down in September 2019 after two years following a price drop in its subscription plan that let users buy a movie ticket per day for only $10 per month. That decision, to the financial detriment of the company, came after analytics firm Helios and Matheson purchased a majority share in the company and fired Mr Spikes.
Mr Spikes said the new MoviePass will be “powered by web3 technology.” Web3 has been characterised by its advocates as a mesh of blockchain technologies such as cryptocurrencies and NFTs that will become the next iteration of the internet. Others have criticised it as a power-grab by venture capitalists.
One of the claimed benefits of Web3 is that users can have power over how a digital service is run. For MoviePass, that would be through users being able to hold partial ownership of the company and the most premium tier including a lifetime subscription. Mr Spikes said that he intended to run the business like a “co-op”.
Netflix Customers Mock Company’s ‘Price Update’
TV Answer Man
Thousands of Netflix subscribers have taken to social media sites to bash the streaming service’s characterization of its new price increase as a ‘price update.’
The TV Answer Man reported last Saturday that Netflix has alerted existing subscribers of the new monthly prices in an e-mail with the following subject header:
“We’re updating our prices — here’s why.”
Netflix does not mention anywhere in the e-mail that the subscriber’s monthly price will actually increase; it just says it will be ‘updated.’ The streaming service announced last month that it’s raising its monthly prices by $1-2, but it hadn’t informed subscribers of the increase until now.
“We hope you’re enjoying everything Netflix has to offer. We’re updating our prices to bring you more great entertainment. Your monthly price will change to (new plan price) on March 12, 2022,” the e-mail says.
After publication of the article, online forums such as Reddit have been overflowing with comments from Netflix subscribers accusing the streamer of trying to hide the price hike. One Reddit board established to allow people to discuss the article now has more than 1,100 comments and many of the writers have resorted to humor to describe their anger.
“So I’m not canceling my subscription but I’m updating my subscription status?” writes RC-5.
“It’s not media piracy, it’s “alternate show sourcing,” quipped I_might_be_weasel.
“I have update my subscription status to: Canceled,” writes mike626.
“I’m not pirating- I’m updating my library,” says chrslp.
“It’s not a cancel of subscription, it’s a usage update,” writes sasu168.
“Thanks Netflix. I also updated my subscription setting to cancelled,” says reinking.
“Going to try this at work. It’s not a raise, it’s an income update,” said ‘lucidinceptor510.
“I love the idea that someone in corporate communications and/or public relations spent hours think tanking a way to respond to the anticipated backlash of the increase in price. And how they legitimately thought responding with “price update” would somehow make people go “ooooh. ok, then. We’re straight,” sneered orange_cuse.
Ah yes, this is where Netflix’s “price update” charges me an additional fee to my monthly rate to still only watch the small handful of shows that I watch on their service while they continue to pursue new content that I will never watch. BUT IT’S NOT A PRICE INCREASE! pic.twitter.com/EKlkZyJ6q7
— Packy (@packysmith) February 17, 2022
So if Netflix is not giving us a price increase, but a price "update", that means I'm not canceling my subscription but I'm updating my subscription status.
— Hogtrough (@Hogtrough) February 14, 2022
Netflix isn't telling their existing customers they're having a price "increase" instead, they're referring to it as an "update". At $15.50 per month, Netflix’s standard tier now slightly out-prices HBO Max ($15 per month) .@TheRiseGuys .@Paige933 https://t.co/sukxNGTl4n
— 933ThePlanetRocks (@933theplanet) February 15, 2022
The Netflix e-mail has also been a hot topic on radio stations and other social media sites including Facebook and Twitter. But it remains to be seen if the price increase, and the company’s ‘update’ e-mail, will result in a significant number of cancellations. Netflix has raised prices before without any serious blowback from subscribers.
Until next week,
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