Yesterday evening I spoke with Hans Pandeya, CEO of Global Gaming Factory, the company that bought Pirate Bay. I asked him a few specific questions about his plans for the Pirate Bay.
The plans revolve around building a new peer-to-peer network from scratch, with a new application that uses smart peering technology to ensure bandwidth usage is as local as possible. The intention is then to sell this localized peer based distribution capacity to ISPs (though I’m not quite sure why ISPs would buy back this bandwidth when it is theirs in the first place).
Mr Pandeya stressed his commitment to supporting rights holders’ interests and incentivizing users to download legal content. The direct implication of incentivizing users of course is that they’ll get to chose from unlicensed content also, which suggests that the commitment to rights holders will fall far short of what they’ll need.
Besides likely rights holders problems, the other challenge will be to convince Pirate Bay users to download a new application to run on a new and unproven network that at outset will have minimal content.
He also explained that he expects to generate strong ad revenues from the Pirate Bay website. Yet the site, which he positions as a ‘search engine’ is a massive series of links to torrents which have been established in the Swedish court to contain extensive unlicensed content. So either he removes these and loses his traffic, or he retains them and puts himself on a collision course with the rights owners. Basically it looks like the Pirate Bay site could just be continuing as is with stronger and more robust financial backing.
My Pandeya was very bullish about the ad revenue potential of the site (though he insisted the peering business would be the main revenue source). Based upon his calculations of Pirate Bay impressions and page views he expects the site to generate €40 million a month. (FWIW those numbers feel high to me, but I’m not an online ad expert). When I asked him what he though the Pirate Bay was currently earning he said he didn’t know because it had been ‘illegal’. I found it hard to believe he will not have done the due diligence. Indeed, to have such a strong sense of the inventory and audience of the site suggests he has in fact delved deeply. So I pressed further, and eventually he said he thought that the Pirate Bay “probably” generated about €3 million a month in ad revenue, but that he “couldn’t know because it was illegal”.
Even if we say that Pirate Bay was earning a third of that, it still gives the site an annual income of €12 million, which doesn’t sit very well with the founders’ claims that it was not a strong revenue generator. Indeed if you consider the upper end of Mr Pandeya’s estimates the Pirate Bay was a €66 million business. Not shabby at all for a bunch of Robin Hoods, and far above the $1.2 million estimated in the trial.