Last October, television producer Ziad Batal was summoned to the penthouse of the Grand Hyatt in Hong Kong. The reality TV veteran had been told by a friend, motorcycle designer Alex Mardikian, to get on a plane for a summit with a deep-pocketed acquaintance who was looking to make Hollywood connections.
After being chauffeured from the airport to the posh hotel, Batal went to a lunch meeting in a suite with a private entryway dominated by a curious statue: a life-size re-creation of the alien from the Predator movies. Batal was escorted to a conference room and introduced to Kim Dotcom, né Kim Schmitz, the 300-pound-plus, 6-foot-7 German hacker-turned-web mogul who founded Megaupload, the cyber-locker service that offered its 180 million users remote storage of movies, music and other files. The 13th-most-visited site in the world at one point, Megaupload was a pirates’ haven — a Napster on steroids, where members could share everything from Lady Gaga hits toTransformers movies with anarchists’ abandon.
The young Schmitz received his first computer at 9, according to a January Sunday Business Poststory, and earned money by copying computer games for friends. He later moved to Berlin and fell in with the Chaos Computer Club, a hacking group founded in 1981. Schmitz began using the sobriquet Kimble, a tribute to The Fugitive lead character Richard Kimble, who is falsely convicted of murdering his wife and must spend his life on the run. Schmitz’s use of this nom de guerre presaged a lifetime of shape-shifting and identifying with antiheroes and the misunderstood.
“This guy was operating the largest cyber-locker out there — thousands and thousands and thousands of links to content,” says Michael Robinson, executive vp of worldwide content protection at the Motion Picture Association of America, which lobbied the government to take action. “Someone setting up a kiosk and selling counterfeit goods on a street corner in front of a legitimate shop — you’d expect law enforcement to stop that behavior. That’s all we ask for on the Internet.”
Although exact figures are hard to come by, piracy has become an epic financial problem for content creators. The Obama administration has claimed that intellectual property theft costs the U.S. $58 billion a year, but some question that figure. The MPAA has said global piracy costs movie studios more than $6 billion a year, and still more money is spent fighting content theft, though the MPAA declined to say what it spends. One thing is clear: The entertainment industry has portrayed Dotcom as the worst facilitator of copyright infringement.