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Who's behind the Kodi TV streaming stick crackdown?

Piracy reaching 'epidemic' proportions, as copyright infringement goes plug and play

Pay TV and other copyright industries are pinning their hopes that new prosecutions of “Kodi USB stick” sellers will thwart what they call an “epidemic” of streaming piracy.

Last year, a wave of arrests were made in Teesside and Birmingham in England, with Middlesbrough shopkeeper Brian Thompson of Cut Price Tomo’s TV likely to be the first to stand trial in May. Thompson denied two charges of selling a box breaching TPMs (technological protection measures), and advertising such a box, in a hearing last week. Both actions are illegal under 296ZB(1)(c)(iii) of the Copyright Act. The case was brought by Trading Standards.

On its own, the open-source Kodi media software, formerly known as XBMC (and before that, Xbox Media Center), isn’t illegal. The team behind it said they’ll use their own trademark IP to disassociate themselves from copyright infringement operations. Kodi allows plugins, and a black economy of streaming networks and resellers has sprung up to allow users to dodge subscription fees. What’s changed in the last year, say industry sources, is that previously, configuring the USB sticks needed patience and advanced technical knowledge, with Tor and VPNs. Now it’s “plug and play,” and the unlicensed streaming services even have a slick EPG (TV guide).

Selling the hardware can land the seller in hot water. Thompson was selling Android TV boxes with the plugins configured – now he says he doesn’t. Geeky Kit, a neighbouring store to Thompson also selling Android boxes which boasted subscription-free access to Sky and BT Sports channels, was raided in 2015. According to TorrentFreak, Thompson acquired Geeky Kit’s business and its inventory.

Nick Matthew, operations manager at FACT, told us the Kodi crackdown had its roots in meetings between FACT, the Intellectual Property Office, Northumbria and City of London Police, and regional Trading Standards agencies in the North East of England. Teesside was highlighted, as it’s a “hotbed” of infringement.

“This is in criminal terms an epidemic worldwide now. It’s causing huge losses to rightsholders. That’s clearly recognised now. It’s affecting investment,” said Matthew.

“Three or four cases have gone to prosecution,” Matthew confirmed.

“Part of the work we’re undertaking is to create some case law that supports the rightsholders in their commercial dealings. Our view is that people are becoming more and more knowledgeable about their devices, what they're capable of, and what’s right and what’s wrong. Certainly there’re people in economic difficulties who maybe think they’ve got daily reasons for not paying subscriptions to these big companies. But your average person in the street knows that if you can access BT Sports or Sky Movies without paying those companies, then you’re probably doing something wrong.”

The dilemma is how to thwart the crackdown. Kodi USB sticks proliferate on eBay and Amazon marketplaces.

Clamping down on the Kodi gadgets would be easier if trading standards agencies could make Copyright Act charges stick. The alternative is more emphatic, but more laborious. A prosecution against two men selling modified Android TV boxes made without much fanfare before Christmas in Nottingham Crown Court saw a jail term for one of the men, Terry O’Reilly, a set top box supplier. O’Reilly was convicted for conspiracy to defraud, a route preferred by copyright enforcement prosecutors since SurfTheChannel operator Anton Vickerman was jailed in 2012. However, the fraud route typically takes a long time to pursue, with lots of evidence and paperwork needed, and it is therefore potentially more expensive.

And as Ari Alibhai – a barrister who has helped train FACT staff and represented media companies – pointed out, a conspiracy needs two people.

Alibhai has backed modifing the relevant part of the Copyright Act on selling circumventing kit. An amendment to the Digital Economy Act was tabled, but withdrawn, on Monday.

“The law isn’t watertight,” FACT’s Matthew acknowledged. He says he sympathises with “people who don’t have the money to pay for a premium subscription,” but points out watching licensed live TV in a pub or a friend’s house is an ethical alternative.

“We don’t want to smash down the door. Clearly we’re not going to everybody’s house in a town and start arresting people – that’s not practical or proportionate. It’s not what the clients we represent want.”

In the meantime, some unexpected pitfalls await. Buyers of dodgy XBMC sticks would fork out for a pirate subscription and find that the plugins didn’t work and the vendor had skipped town. Recently, one plugin author inserted malicious code intended to annoy a rival developer, turning Kodi users of the plugin into a “DDOS Botnet” – their sticks made repeated requests to two target websites. The developer has since retired. ®

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