Piracy monetization firm Rightscorp continues to lose money. Revenue over the most recent quarter has dropped significantly compared to last year and the company is still miles away from turning a profit. Instead of generating more money from alleged pirates, Rightscorp must set aside $200,000 to settle accused file-sharers it allegedly harassed.
For several years, piracy monetization firm Rightscorp has been trying to turn piracy into profit.
The company sends DMCA notices to ISPs and bundles these with settlement demands, intended for Internet subscribers who allegedly shared pirated content. If the accused subscribers pay $30, they avoid further trouble.
Rightscorp works with prominent copyright holders including music licensing group BMG and movie studio Warner Bros. However, thus far they haven’t been able to turn their scheme into a success.
Instead, the company has been turning a loss quarter after quarter, a trend that continues with its most recent financial figures published this week.
According to the latest financial report, Rightscorp generated just $146,043 in revenue during the second quarter of 2016. That’s 38% less than the $233,816 it made during the same period last year.
The costs during the same period were substantial, $671,781, meaning that Rightscorp recorded a loss of over half a million during the past three months. A significant amount, but due to reduced operating expenses it’s better than the $1,7 million loss it recorded last year.
One of Rightscorp’s problems, as previously highlighted, is that many ISPs refuse to forward their settlement requests. Some Internet providers flat-out refuse to forward Rightscorp’s notices and others, such as Comcast, remove the settlement part.
ISPs’ refusal to forward notices is also one of the reasons that was given for the disappointing numbers for the most recent quarter.
Rightscorp recently celebrated a court success, where Cox was ordered to pay $25 million because they failed to properly respond to its DMCA notices. This prompted the anti-piracy firm to threaten every ISP in the country, but whether that will have any effect has yet to be seen.
Under U.S. law Internet providers are not required to forward DMCA notices to their subscribers, and if they choose to do so they can remove the settlement request. With this in mind, Rightscorp’s aggressive stance may actually work against them.
After losing the court case Cox has started to process Rightscorp’s notices, but whether they also forward the settlement requests is unknown.
Interestingly, the biggest settlement news of the year actually goes against Rightscorp. The company and several copyright holders, including Hollywood studio Warner Bros, previously agreed to settle a class-action lawsuit over intimidating robo-calls.
As a result, more than 2,000 accused pirates are eligible for a $100 settlement each, and according to the quarterly report Rightscorp has set aside $200,000 to cover these costs.
Ironically, that’s more than the revenue the company itself generated from settlements over the past several months.