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Rightscorp, Inc. (RIHT)

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Last Post: 11/18/2015 8:16:36 AM - Followers: 30 - Board type: Free - Posts Today: 0

Rights Corp..

Rightscorp (OTCQB:RIHT) monetizes copyrighted Intellectual Property (IP).

The Company's patent pending digital loss prevention technology focuses on the infringement of digital content such as music, movies, software, and games and ensures that owners and creators are rightfully paid for their IP. Rightscorp implements existing laws to solve copyright infringements by collecting payments from illegal file sharing activities via notifications sent through Internet Service Providers (ISPs).

The Company's technology identifies copyright infringers, who are offered a reasonable settlement option when compared to the legal liability defined in the Digital Millennium Copyrights Act (DMCA). Based on the fact that 24% of all internet traffic is used to distribute copyrighted content without permission, Rightscorp is pursuing an estimated $2.3 billion opportunity and has monetized major media titles through relationships with industry leaders.

One Year Target Price :  $6.71 (assuming a 4X Price to Sales Ratio)

CFA Research Report:

Is The Piracy Threat Really Decreasing?

Flat or declining revenues at major media companies like Sony and Viacom is contrary to recent reports that digital piracy is declining.

Recently, there has been a lot of discussion surrounding a few articles suggesting that online piracy is decreasing.  From where I sit that is not the case.  I am the Chief Technology Officer and Chief Operating Officer of a company that helps monetize copyrighted intellectual property (IP) for the artists and holders of copyrights.

A brief overview of the public filings of Viacom and Sony, two major players in the production and distribution of copyrighted intellectual property shows that one has no growth over 3 years and the other has declining revenues. In fact, Moody’s recently expressed concern that Sony will be unable to maintain future profitability and has downgraded the Company’s debt rating to “junk” status. Due to various external circumstances including “rapid changes in technology”, Moody’s announced that it would be difficult for Sony to improve their financial position in the near-term

Much of the claims that piracy is declining are based on a new report published by Sandvine,  To get our levels set correctly here, Sandvine is a Canadian company, which as it ends up, makes software to assist ISPs to “shape” i.e. control, BitTorrent traffic.  BitTorrent is the primary tool for file sharing and pirating content online.  This report declares that “Filesharing now accounts for less than 10% of total daily traffic in North America”  This has been widely touted in various blogs as a decrease in piracy.  Specifically, the report states that during the second half of 2013, filesharing’s share of aggregate peak-period traffic in North America (not worldwide) fell to 8.93% from 10.5%. This data is being shown as proof that the proliferation of legal services that distribute copyrighted content such as Spotify, Netflix, YouTube, are helping to combat the fight against piracy.

If we had written a narrative regarding the same data, we would have stated that BitTorrent piracy grew by data volume during the period.  Since Sandvine’s clients are ISPs, they don’t want to highlight this embarrassing fact about how their clients are harming companies like Sony and Viacom, so they feature the statistics that paint their client’s in the best light. 

In regards to their narrative on their findings we see problems with the report–all of which should cause companies, investors and owners of copyrighted IP to be skeptical of any optimism about the decline of online piracy. Among them:

1) The report estimates that total traffic from the first half of 2013 to the second half of 2013 increased 20-30%.  This means that the total amount of data used for filesharing increased.  The 8.93% of internet traffic in the second half of 2013 is more movies, music and video games consumed illegally than the 10.5% indicated in the first half of 2013 because the overall “pie” grew by 20% to 30%.

2) The report shows BitTorrent’s share of total Internet traffic increased, as did total volume of BitTorrent traffic, everywhere else they measure–Europe, Asia-Pacific, and Latin America (as it has in every report published).

3) The narrative does not take into account the increase use of VPNs (Virtual Private Networks) or proxies increasingly used by BitTorrent users to “mask” where their traffic is coming from. SSL (Secure Sockets Layer) traffic, used by VPN services, more than doubled in the past year (as reported by Sandvine).  They include data on VPN usage but leave that out of their analysis on filesharing.

4) We believe that the report is misleading when it states “Long are the days when filesharing accounted for over 31% total daily traffic, as we had revealed in our 2008 report.”  The total amount of fixed data transferred on the internet grew by more than 310% between 2008 and 2012 from 9,927 Petabytes per month to 31,388 Petabytles per month.  We are still waiting for total 2013 internet traffic totals.  So 8.93% of internet traffic in 2012 used for filesharing is a lot more music and movies files than 31% of internet traffic in 2008.

4) The report hinges its filesharing debate solely on public BitTorrent, ignoring the rise in popularity of “dark nets” including Tor and other encrypted digital lockers used for online piracy.

5) Despite the increase in total traffic, U.S. digital track sales decreased for the first time ever in 2013, dropping from 1.34 billion to 1.26 billion, according to Nielsen SoundScan. CD sales also declined, dropping 14% to 165 million.

The data provided by Sandvine says nothing about the number of files share, or the number of files shared per person. That is the information that matters, and what we attempt to solve everyday at Rightscorp.

Ignoring all the other factors, this is reason alone to question the claim that “piracy is decreasing”.

VPNs and Proxies

US BitTorrent users are becoming more savvy and turning to VPNs to mask their traffic from their ISP. It has been shown that this method is effective in avoiding piracy lawsuits and strikes. TorrentFreak, a popular piracy blog, reports “a majority” of BitTorrent users are turning to VPNs.

The results in the Sandvine report show that SSL (Secure Sockets Layer) traffic, used by VPN services, has increased significantly over the last report, more than doubling from 2.5% to 5.4% of total traffic. Since actual traffic has increased even more, the true usage of VPNs could be significantly more.

As TorrentFreak pointed out

“This increase in VPN use also means that the actual percentage of BitTorrent traffic is even higher, since the Sandvine report puts the traffic generated by these users in the SSL category.”

Other Piracy Channels

The metric Sandvine uses for all “piracy” is BitTorrent. This is flawed, as recently many pirates have been abandoning torrent-based peer-to-peer file sharing, partially because there are many other ways available to share material.

Dark nets” such as Tor and other encrypted digital lockers have experienced an exponential growth in number of users in recent months. Particularly following the attention drawn to them by the Edward Snowden case. Other popular anonymous networks including I2P, and Freenet have combined to more than double in size in the past year.

The limitations in Sandvine’s tracking data for anonymous networks such as Tor suggest that the report is missing one of the fast growing segments of the piracy market.

What Does This Mean?

Well, to be frank, piracy is not decreasing, and investors should be skeptical about reports stating that it is. On the contrary, there are many reasons to believe that it is in fact on the rise. Artists are still unable to properly monetize their copyrights.

Hopefully, with services, including our own at Rightscorp (RIHT), artists will be able to protect what is theirs. Additionally, Rightscorp has been successful at getting VPN companies to adopt its copyright monetization services to discourage misuse of VPN services.

The cultural acceptance of piracy–particularly with young people–creates a lot of media incentives to mask the consequences of this system. It also leads to optimistic reports like the one above.


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Current Price
Bid Ask Day's Range
RIHT News: Current Report Filing (8-k) 10/11/2016 05:09:07 PM
RIHT News: Quarterly Report (10-q) 08/15/2016 04:51:09 PM
RIHT News: Rightscorp Applauds $25 Million Judgment Against Cox Communications 08/11/2016 08:45:00 AM
RIHT News: Quarterly Report (10-q) 05/16/2016 06:37:39 PM
RIHT News: Notice of Effectiveness (effect) 05/05/2016 06:01:44 AM
#358 Dickie D 11/18/15 08:16:36 AM
#357   $RIHT On September 29, 2015, Rightscorp, Inc. iamnottheone 10/06/15 09:17:19 AM
#356   $RIHT recent news/filings stocktrademan 09/25/15 12:30:19 PM
#355   Position I've been watching this one fvillage 09/25/15 10:46:40 AM
#354   I agree kelseylane12 09/25/15 07:35:06 AM
#353   Ye I'll be watching as well. Chances are solmer 09/24/15 11:34:48 PM
#352   I know just watching maybe flipping if it kelseylane12 09/24/15 11:29:16 PM
#351   Be careful, stock was clearly front loaded today solmer 09/24/15 11:28:09 PM
#350   Promo start tomorrow kelseylane12 09/24/15 10:42:52 PM
#349   How come this board died out ? kidmarco 09/24/15 04:25:34 PM
#348   win some, lose some; I've seen some stellar BigAlBalbosci 08/15/15 04:15:55 PM
#347   Lol not very well. Doesn't always work snagem83 08/15/15 12:02:16 AM
#346   how did that hammer candle work out? BigAlBalbosci 08/14/15 11:56:51 PM
#345   Yeah, so am I! If the volume just MattP1920 08/14/15 11:57:24 AM
#344   I'm hoping $RIHT will get up to .18 SgtJBone 08/14/15 10:45:00 AM
#343   The volume is doing really well right now, anyway! MattP1920 08/14/15 09:54:07 AM
#342   I usually like a little more volume with SgtJBone 08/14/15 07:58:14 AM
#341   I'm going to get in on the ride SgtJBone 08/14/15 07:42:47 AM
#340   Promotion or not that's a beautiful hammer candle snagem83 08/14/15 12:47:12 AM
#339   Moon shot for RIHT today? hal8445 08/12/15 05:06:45 PM
#338   $RIHT GREAT ACTION TODAY CLOSED ABOVE 0.20 WITH jedijazz 07/06/15 07:29:17 PM
#337   $RIHT recent news/filings stocktrademan 07/06/15 11:36:33 AM
#336   Rightscorp, Inc. (QB) (RIHT) $ 0.209 + 0.027 (14.84%) jedijazz 06/23/15 04:07:50 PM
#335   RIHT wow huge volume and up over iamnottheone 06/23/15 02:49:11 PM
#334   Turd firm, shocked they haven't been sued into superclueless 06/20/15 02:59:32 AM
#333   Looks like good news. artifacts 03/26/15 05:05:27 AM
#332   RIHT promotion starting today. jenpro 03/22/15 04:18:39 PM
#331   What about the filings, where I can find it? chocolate_dip 03/12/15 01:59:57 AM
#330   RIHT - Revenues drop again for the 4th 236T568 03/10/15 07:10:33 PM
#329   Hadn't hit my screen yet CAJUN 12/18/14 07:37:53 PM
#328   $RIHT news out. Looks like the conference Magua1 12/18/14 10:39:01 AM
#327   It will be interesting to see how this unfolds CAJUN 12/17/14 10:09:55 PM
#326   10,50 sma crossover looks encouraging. If it Magua1 12/17/14 09:41:17 PM
#325   People to stuck-up here? CAJUN 12/16/14 08:58:19 AM
#324   Damn, where did everybody go? CAJUN 12/12/14 10:47:24 PM
#323   $RIHT ALL ABOUT THAT BASS BASS BASS BASS!!! TechnoAnalyst 12/10/14 12:18:04 PM
#322   Short term target hearing .50!!! $RIHT TechnoAnalyst 12/10/14 11:24:48 AM
#321   Huge interest since the article on THE STREET jedijazz 12/10/14 11:23:49 AM
#320   I think it can go higher! $RIHT TechnoAnalyst 12/10/14 11:08:04 AM
#319   RIHT Looks interesting here BoilerRoom 12/10/14 10:06:51 AM
#318   Looks like price target is .89/share!!! $RIHT TechnoAnalyst 12/10/14 09:48:35 AM
#317   $RIHT has to return millions of dollars to TechnoAnalyst 12/10/14 09:45:46 AM
#316   Wed, Dec 10, 2014, 9:05AM EST - US jedijazz 12/10/14 09:07:01 AM
#315   $RIHT 52-wk high is .97 lets go -- TechnoAnalyst 12/10/14 08:55:47 AM
#314   New APS like play!!! $RIHT UP 40%!!! TechnoAnalyst 12/10/14 01:45:21 AM
#313   $RIHT NICE CLOSE!!! TechnoAnalyst 12/09/14 05:40:45 PM
#312   Sorry, but the RIHT 3rd quarter doesn't end 236T568 12/09/14 03:04:39 PM
#311   $RIHT clever stock for your portfolio, trading 50% jedijazz 12/09/14 02:57:00 PM
#310   Found this DD from 3rd Quarter, which ended jedijazz 12/09/14 02:48:16 PM
#309   Huge opportunity here!!! $RIHT LOCK N LOAD TechnoAnalyst 12/09/14 02:09:18 PM