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Mega signs 500,000 members on first day, Dotcom claims

Jan 20: Kim Dotcom's new file sharing service, Mega, went live at 6.48am this morning, the to-the-minute anniversary of the raid on his mansion. NBR ONLINE will live blog the launch event from 7.30pm tonight, on this page, and provide intermittent updates through today. Mega's largest investor has been revealed as its CEO, New Zealander Tony Lentino. It is initially being hosted in Germany. Dotcom and his team have outlined the legal arguments they will use when Hollywood launches an expected counter-attack. The DOJ this week hinted at new charges if the Mega launch - which could be interpreted as a bail breach - went ahead. Mega offers 50GB of free online storage (more than the likes of Google Drive and Dropbox); paid options for storing more stuff (scroll down) and a unique one-click file enryption technology for that Swiss bank feel.

11pm: Despite ongoing overloading problems, Mega had 1 million visitors and signed 500,000 members duriing its first 14 hours of operation, Kim Dotcom said at a media launch at his rented Coatesville mansion tonight.

Dotcom is hoping to monetize the service by upselling some members to premium accounts. He's also no doubt looking for a ready-made audience for Megabox (a service that will sell content) and Megakey (which will offer said content free, if you're willing to install a plug that will display his ads in your browser as you generally surf the web). Megabox/Megakey will launch in around six months.

In keeping with the man himself, the event was equal parts cheesy and visionary. It included a helicopter and "FBI" agents rapelling down from the mansion roof. And with a row of mini-skirted guards in front of him, the accused pirate waxed lyrical about the role of Mega's encryption technology in an age of prying governments.

Some people say if you've done nothing illegal, what have you got to hide, Dotcom said. But many people hid many things, "even from their friends and family." Mega addressed a "human need for refuge from the community … and maintaining the balance of power between the individual and the state."

On a more meat and potatoes level, he said he wanted to build an econ-system of third-party privacy applications around Mega.

Dotcom said he hoped to one day list Mega on the NZX (for now, the company is majority-owned by a trust controlled by his wife).

ABOVE: Dotcom's mystery Mega investor and CEO Tony Lentino (with his sister Vinnie Hill). Lentino - definitely a beer straight from the bottle man - told Keallhauled he met Dotcom offline when "he came to drag one of his cars on my airstrip" (Lentino's 1000 acre property in Wellsford includes a airfield).

Dotcom included a greatest hits of his pre-emptive legal arguments for the lawyered-up Mega, and repeated his argument that Megaupload was a neutral conduit, and no more responsible for piracy than any other file sharing service. Google's YouTube has more pirated material today than Megaupload ever did, he claimed, while Google provided easy links to copyright-infringing content.

NZX-listed caft beer Moa got a look in with the catering. But this being a Kim Dotcom function, there were also bucket-sized cans of energy drink.

NBR pressed that a key difference was Megaupload paid cash incentives to uploaders (rather than an artist, label or studio, as with his proposed new services).

In hindsight, does he see that as a mistake?

No, said Dotcom. Cash incentives were only available to registered users - meaning someone could be more easily identified if they uploaded infringing material - and rewards were only given for traffic generated by a file of 100MB or less. That is, too small for most movies and TV series.

Dotcom's US lawyer Ira Rothken said Mega's copyright compliance and take-down policies exceeded legal requirements.

L-R: Lawyer Ira Rothken; Megaupload co-accused Bram van der Kolk and Mathias Ortmann. The pair had lead technical roles in Megaupload, as they do with Mega.

Dotcom was also asked about jobs for New Zealanders on Mega. He said Megaupload had employed 220. Some had got other jobs in the meantime, but he would offer any still in the job market a Mega role as his first priority. After that, locals would be first on his list.

Missing from all the hoopla was any mention of Dotcom's birthday as the event wound down close to midnight - as co-accused Mathias Ortmann and Bram van der Kolk reminded Keallhauled as they headed inside to celebrate.

The pair had been awake for 40 hours straight.

But Mega wasn't quite behaving. Strorage servers were having to be rebooted every hour in efforts to rebalance the hosting setup.

Having too many signing up at once is a good problem to have, but tomorrow it will definitely be back to work.

InternetNZ, which adminsters the .co.nz domain, was happy to front up at the launch. Pictured: policy lead Susan Chalmers.

Dotcom's wife Mona watches her husband onstage. On paper at least, she is in control, holding 89.31% of shares in Mega Ltd through a trust. A company controlled by Lentino holds the balance. Lentino's wife Emily is in the blue dress at right.

Rothken and Lentino onstage. In the event, there was no FBI raid, but as you can see they took sensible bodyguard protection.

Dotcom's lead US lawyer, Ira Rothken (left), and Paul Davison QC share a quiet word.

... and Ortmann, van der Kolk and co-accused Finn Batato (who handles marketing).

Media set up. 

Looking down the hill from the northern slope of Dotcom Mansion's grounds (click to zoom).

A toy drone helicopter buzzes guests before the presentation kicks off - complete with a full-size helicopter used to stage a mock raid.

The FBI agents in the raid helicopter proved friendlier than those who stormed the grounds last year:

(via @timphin)
 

11am: NBR readers report best results trying to access the overloaded Mega via https://www.mega.co.nz - the "s" is the operative bit) rather than www.mega.co.nz (which your browser will likely default to if you just type mega.co.nz). Even on that first address, it's a little slow to load at least from NZ."

(The German-hosted, global service got an NZ-registered web address after Gabon - which yielded the alphabetically-pleasing Me.ga - suspended the company's domain, allegedly under US pressure.)

Kim Dotcom's colleague and co-accused Finn Batato told NBR ONLINE shortly before 11am, "We are literally overwhelmed by the popularity of the new Mega. Our tech team is sorting everything out. No major issues, just the usual challenges when you launch a big service like ours. Currently approximately 1200 users are signing up per minute. It is a huge load." 

Who knew the FBI has so many agents?

 

Jan 20, 9am: Kim Dotcom's new file sharing service Mega.co.nz is inaccessible. On Twitter, Kim Dotcom claims the service, hosted by Cogent in Germany gained 100,000 registered users in its first hour (Kim later updated the figure to 250,000 shortly after 9am), but then became overloaded by "huge demand". The site has been simply not loading for NBR since at least 8.30am. Dotcom says it is running at maximum capacity and the Mega team is working on balancing the services.

Most of those who had an early look at the new online file-sharing service yesterday praised its 50GB free storay (scroll down for paid options), simple interface and unique one-click enryption feature.

But it also drew a jab from Torrent Freak for its surprisingly illiberal, law enforcement-friendly privacy policy, and the amount of data it collects about users (read: Mega Launches: Brilliantly Secure, But Not Anonymous).

The policy includes these sections:

We keep the following personal information:
- When a user signs up for particular services on our website they may need to give us the details required in our registration form and keep that information up to date;
- Communication logs, traffic data, site usage and other information related to us supplying the services (including for serving of advertising material on our site);
- Any personal information included in data uploaded to our system including but not limited to registration information.

We keep records of IP addresses used to access our services.

While this may not be a huge issue for the mainstream, privacy buffs usually prefer more anonymity. Currently dissidents and whistleblowers are not shielded from being exposed by Mega, if the authorities come knocking.

Mega won’t hand personal information out to random strangers of course, but they will cooperate with law enforcement and comply with subpoenas as they should. In their privacy policy they state the following:

If we think it is necessary or we have to by law in any jurisdiction then we are entitled to give your information to the authorities.

We reserve the right to assist any law enforcement agency with investigations, including and limited to by way of disclosure of information to them or their agents. We also reserve the right to comply with any legal processes, including but not limited to subpoenas, search warrents [sic] and court orders.

And also this:

We can use any information we have about you as a customer relating to your creditworthiness and give that information to any other person for credit assessment and debt collection purposes.

ckeall@nbr.co.nz


Jan 19: Mega pricing revealed

Kim Dotcom's new file sharing service, Mega, was opened to trial users early this morning NZ time - just over 24 hours from its official launch at 6.48am on Sunday (the to-the-minute anniversary of last year's NZ police/FBI raid on Dotcom mansion).

As Dotcom tweeted earlier this week, standard accounts will be free, and offer 50GB of free online storage.

That's considerably more than the free allocation offered by rivals such as Dropbox (2GB), Apple's iCloud (5GB) Google Drive (5GB), and Microsoft's SkyDrive (7GB) - although all the services have a raft of promotions on the go, such as the free 50GB Dropbox accounts offered to buyers of Samsung smartphones.

Click screenshot to enlarge.

Today, Mega also published pricing for premium plans, charged in Euros: €9.99 ($NZ19.50) a month for 500GB is a keen price. Google Drive, for example, charges $US19.99 ($NZ23.90) a month for an upgrade to 400GB - or at a more modest level, $US2.50 ($NZ3.01) for a bump to 25GB.

The 50GB free and the paid options are generous. But then again they need to be to lure customers who will naturally be wary of the new service - and none more so than the 50 million-odd users of Megaupload, all of whom lost all their files when the service (hosted in Virginia) was shutdown by US authorities a year ago.

A Megabox/Megakey content service will follow in around six months.

Megabox will offer music artists (or artists plus their label) a cut of profits. The companion Megakey service will sell songs in the manner of iTunes, plus offer people the option to get free content if they accept a browser plug-in, then earn points by viewing ads. Dotcom said while Megakey would replace ads, it would only replace ads served by the largest sites.

Meanwhile, NBR is one of the early Mega trialists. 

From a very quick play, the service seems as easy as advertised, with a drag-and-drop, browser-based interface:

The sites's mooted (HTML5-based) upload acceleration technology was not in evidence as files uploaded in a sluggish time similar to rivals - but that's always going to be the case for most NZ broadband home accounts, which are typically capped at 1Mbit/s upload speed.

FLASHBACK: Kim Dotcom in the dock with (L-R) co-accused Bram van der Kolk, Finn Batato, Mathias Ortmannn after their January 20, 2012 arrest on copyright infringement, money laundering, racketeering and other charges associated with Megaupload and its alleged $US175 million in illegal profits and divereted $500 million revenue from content providers. In part because of procedural and legal blunders by the DOJ, FBI, GCSB and NZ Police, the case to extradite the four to the US has seen a series of delays; the latest has pushed it back to August this year at the earliest. 


Jan 18: This morning I was out at Dotcom Mansion, where Kim and the team were gearing up for the global launch of his new file sharing service, Mega.

READ ALSO: NZ company named as key Mega partner; Mega CEO named

Mega will go live at 6.48am Sunday, the to-the-minute anniversary of the police/FBI raid that saw Dotcom and colleagues  Bram van der Kolk, Finn Batato, Mathias Ortmann on copyright infringement, money laundering, racketeering and other charges associated with Megaupload (if you missed it over the holidays the latest date for their much delayed extradition hearing is August next year).

Keep an eye on NBR, and in particular NBR.co.nz/mega over the weekend for more details of the new service, the benefactor behind it, and Kim's plan to win the hearts, and business, of the 50 million or so users who lost files in the Megaupload shutdown.

Meantime, here's a couple of behind-the-scenes pics from this morning (click any image to zoom):

ABOVE: A giant "Mega" sign being constructed on the mansion's front lawn.

The stage manager, from corporate events company Mad Ant, told me around 250 people were expected Sunday night (they'll range from reporters to people who have worked on the site to competition-winning members of the public). 

The launch (7.30pm to 9.30pm Sunday night) will also be streamed over the web (the launch is global, but Mega.co.nz has the distinction of a Kiwi-registered domain. Gabon - which yielded the alphabetically-pleasing Me.ga - suspended the service's original domain, under alleged US pressure).

Around 150 people have been involved in the setup, he said, which includes the construction of a temporary outdoor stage.

A helicopter was onsite, but Kim (still under bail conditions, albeit pretty liberal ones these days) is not extending his transportation fleet. A security guard told me it was supplied for the event by the production company.

Half way through my interview, a surprise guest dropped by: Lowndes Jordan partner Rick Shera (pictured left with Dotcom's US attorney Ira Rothken). The Auckland intellectual property specialist has joined Dotcom's legal team, which now numbers 20, as the giant German lawyers-up ahead of the Mega launch, and anticipated movie and music company flak.

Lots of room for a stage when you have a golf-course sized backyard.

Check back in Saturday morning for more as Kim and his US lawyer are candid about the challenges facing the new venture - but also heartened by some surprising backers.

ckeall@nbr.co.nz

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Comments and questions

Sure that headline shouldn't read mega lunch?

Inspector Clouseau on secondment to the FBI is plotting his attendance as we speak. Incognito wink wink.

I thought the FBI was only supposed to concern themselves with domestic issues. The CIA on the other hand... Oh, and I'd just like to apologise to the rest of the world on behalf of the American people for our imposition of legal, societal and other hypocritical "norms" on the resat of the world. Does the US really need to intimidate Gambia or whatever? The police state has completely run amok, and what's worse is their enforcement of law has become completely subjective.

The wonderful thing about these Intellectual Property lawyers is that they blissfully forget when tax practitioners set up structures they think they are legal as well. And very well might be.

But then the law changes or "public policy" results in Courts deciding they are not. Good luck chaps.

The not-so-wonderful thing about IP lawyers is that they dream up these absurd copyright laws in the first place, then manage to convince their peers that I’ll be a great thing (for them?). Next minute, they're enshrined in law (well, that’s how NZ absurd copyright law first came into being).

Copyright law is perhaps the most insidious, complex and least understood law with regards to IP ownership throughout the world, and is a serious impedient to economic growth. Lawyers love it, which is precisely why it should be struck from the statute books everywhere.

Actually, copyright is not complex. It works like this. Some things other people own and sell you a license to use. If you start manufacturing your licensed copy illegally then that is theft and you get prosecuted. It's an old-fashioned view of ownership which many Gen Y people don't understand today, especially around music and videos. Old fashioned is not wrong, though. Gravity is old fashioned.

I was very closely associated with a copyright action (but neither as a plaintiff or defendant), that languished before the NZ Courts for approximately 10 years. Not only do I have a unique insight into the complexity of copyright law, I also have a unique insight into shortcomings of the Courts in hearing such matters, and the significant economic cost and collateral damage the Courts can cause, when they get it wrong. There seems to be some parallels between Dotcom’s case and the one in which I was associated where 1) The Plaintiffs case was almost entirely fabricated. 2) The Plaintiff used his high public profile and connections with the Police, to attempt to intimidate people associated with the defendant 3) The Plaintiff successfully used the Court as a mechanism to threaten/ward-off, legitimate market competitors for a period of about x 10 years, pending a substantive trial into the matter. The matter never went to trial and it wasn’t until about another x 4 years later, that an individual with no knowledge of the matter (and who had not sighted one page, of the thousands of pages of evidence), actually established copyright ownership, all within about 15minutes of pointed questioning. As it turned out, it was neither the plaintiff or, the defendant, but another party entirely who owned the copyright.

The answer to all the Dotcom what-ifs.To secure long-lasting loyalty from big and small noting Kiwis. A few free ice creams.

It seems to be working for him.

Uploads haven't been working all day as far as I can tell ... no more upload, just Mega.

Hello all, the site is not loading at all. Is it server overload or the domain being different issues?

Let me know if Mega Insta reseller is genuine.

This is gonna be 100% awesome!!!

TUCK, TUCK, TUCK. I want my godam Mega dangit!!! What is going on, comonnnnnnnnn!!! Mega, Mega, Mega. I want my Mega, dangit!

The popularity does not surprise me at all.

The chance to have the use of other people's property for free has always been popular.

Witness the popularity of politicians who promise to take from the winners and give to the losers.

What's concerning for our society, though, is that this widespread appropriation of people's property is against their will.
This is not a good indicator at all. It's even worse that it stands unchecked.

Is the challenge that we face with IP really that different to the challenges around competing claims to real estate that lead to the Torrens system?
What if we started a central register for copyright holders to register their files?
What if there were three or four basic bundles of rights of freehold/leasehold/unit titles in the land context? These could be assigned to each file.
What if these could be easily embodied and implemented by new file extensions that were otherwise a mirror of their parent file type ie an fmp3 might be a "free" mp3.
What if we could come up with a datasearch protocol that could allow
copyright holders/compliance stakeholders to trawl file sharing sites electronically with the confidence of all stakeholders?
By allowing all parties to operate at their typical operating level of efficiency (ie, leveraging high-tech database and software algorithms) we could match a dispute resolution process to the scale and intensity of the realities of the file-sharing sector.

The third paragraph above should read: "What if there were three or four bundles of IP rights (compare freehold/leasehold/unit titles in the land context)"?

This is an argument for efficiency by simplifying the organisation and processes around IP rights. Not the reduction or undermining of those rights. I envisage those bundles being discovered by comparing the trends in IP licensees.

My concern is that fundamental to our current economic leverage is the principle that property rights are transferred by agreement.

I don't think we should institutionalise or legitimise systems for undermining this principle because it will have far-reaching consequences.

This business model actively undermines this because its owners know that its customers will use it to share files illegally.

I am keen for innovation and information sharing but not at the expense of the principle requiring agreement to transfer property rights.

Consider the consequences if we allowed real estate or consumer goods to be transferred against suppliers' will? Much of our efficiency and leverage would be undermined and lost.

The potential for a central register supported by a high-tech database and search algorithms is it would allow either the state or the market to require/pressure businesses like this to check or allow others to check their customers uploads against this database of rights.

Brands could be established that embody certain levels of compliance: ie, similar to the branding around digital certificates.

The rest of the world's IT journalists are already calling it Mega-Fail. Meanwhile, the brown-nosers here keep sucking up to fatty. Maybe they're hoping for an invite to the next party?

Strewth, you must read the wrong articles or more perhaps crawled through dozens of glowing reviews until you found one that satisfied your prejudice. The Mega launch is an unprecedented success and a couple of hay seeds who are struggling to understand the internet and its future are like you - the present-day dinosaurs.

Dozen's of glowing reviews? How do you get a glowing review when you can't get onto the thing, even to upload a 160byte txt file?

An unprecedented success? How can you claim that after 48 hours?

Lets start with the worlds best IT news site, The Register.

http://www.theregister.co.uk/2013/01/20/mega_launch_fail/

Computerworld[dot]com ignores it completely.

PCWorld says "Bug ridden, could be good one day"

So what we are left with is a bunch of brown-nosing from local journos (and people like you) who were fed canapes and champaign. Nice!

Oh, boo hoo - what a tosser.
So it seems you were one of the 500,000 sign-ups on the first day, an unprecedented number in the IT world and the scale of which is being broadcast on BBC and Sky news, etc, world wide and you are bitching you can't get your little photo up. Instead of chucking stones, chill out and enjoy history in the making. Fatty jokes on you.

Ah yes, a classic case of under-estimating requirements. Why it is that when Wheedle was (rightly) castigated all round for completely botching their launch with inadequate website/servers/bandwidth, you're busy toadying up for this, which is equally inept?

Sadly, we can't all be convicted frausters and petty small-minded gamers who launch DDOS attacks on websites after being kicked off for cheating. Boo, hoo, I feel so upset that I'm not like that. Nearly as sad as you are.

Comparing website visits is irrelevent considering Mega is website only, whereas I never go to the Dropbox website as I have their app on my iPhone and iPad and their desktop app on my laptop.

The genius of Dropbox is it just works. From what I have heard, Mega isn't working as it should.

You can change your password on Mega.co.nz at https://mega.co.nz/#account

You can't compare Dropbox with Mega, but I think Mega will soon introduce a similar app that will integrate into your desktop

The real question is what Hollywood will do. People are unlikely to use Dropbox for sharing illegal files, it's been made for teams / businesses. Yes, there will be people who will be abuse it, but only a small percentage compared to Mega. If you would like to discuss this, please visit internetfreedom.net, where we want to discuss the legality of file sharing services

Mega-search.me is live and going again .... Full of pirates treasures....

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