Winning Big From #NBCFail
On a typical day, visit the website for Hide My Ass!, a virtual private network service based in London, and you'll be greeted by the company's logo: a donkey wearing sunglasses.
But visit the website during the 2012 Olympic Games, and you'll see that the donkey has been outfitted with a red, white, and blue jacket, a sporty headband, and a gold medal. The donkey looks like he has had a successful run at the Olympics. So does HMA.
Danvers Baillieu, the company's COO, says that HMA--which allows visitors to browse the Web anonymously through encrypted private networks--has seen a tenfold increase in the number of paying subscribers since the Olympics began. Approximately two-thirds of these new customers are opting for a monthlong membership, the shortest of the subscription options. The majority of this business has been coming from the United States.
To understand the boom, tune back in to traditional media. NBC has been under attack by plenty of U.S. viewers, who think it has provided subpar Olympics coverage. Much of the criticism centers on the network's use of tape delay for large events, such as the opening ceremony. In order to watch in real time (and avoid the inevitable spoilers breaking real time on news sites and social media sites), some customers are turning toward virtual private networks or anonymous Web browsing services that allow them to view the BBC's online streaming broadcasts (usually available only for IP addresses based in the U.K.) for $9.99 a month.
VPNs provide users an encrypted connection to a server that circumvents the block that U.S. Web users can run into when visiting foreign subscription-based sites. Proxy services, such as UpsideOut's Proxify, allow Web users to appear to be from a different geographic location (like, say, the U.K.) and access content that is otherwise unavailable in the United States.
A website privacy company says it's feeling a traffic boost from the Olympics, too. "People are writing to us saying, 'I want to visit the BBC site. Can I do it through your server?'" says Justin Schlecter, president and founder of UpsideOut, a three-person online security company based in New Rochelle, New York. "And the answer is, 'Yeah.'"
Unlike HMA, UpsideOut is not advertising its products as a way to view the Olympics. But since the Olympics began, NBCOlympics.com has jumped into the top 10 most visited sites among users of Proxify, Schlecter says. UpsideOut users view more than one million webpages in a typical day.
The bump in users--and profit--during this time comes at a significant risk of violating the BBC's terms of service, which expressly prohibit a Web user from accessing its video content from outside the United Kingdom.
"Whether or not the VPN provider could be on the hook for assisting and facilitating actions of the end user is a separate question and not entirely clear," says Gaurav Mathur, a partner at Silicon Legal, a law firm based in San Francisco that represents numerous start-ups. He says violating the International Olympic Committee's copyright should also be a concern for VPN providers.
"The IOC is the original owner of all this content that's being streamed, and they are granting certain limited licenses to these content distributors like NBC and BBC. And by accessing that content in a way that's not permitted by the IOC," Mathur says.
How liable a company is for providing an avenue for that infringement is as of yet unclear, Mathur says.
Baillieu is not worried about the legal implications of allowing users a way to watch the Olympics, though. In fact, Baillieu almost seems to welcome any legal action brought against HMA by broadcasters.
"I think in reality, if half the world was using this and it was massive, maybe it would be an issue for the broadcasters," Baillieu says. "But we're talking pretty small numbers of people who use these sorts of services compared to the overall picture. And I think if [NBC or BBC] starts suing us, it would be the best publicity VPN services could have."
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