Korean Prosecutors Arrest Five Streaming Media CEOs

Looks like China isn’t the only country cracking down on streaming video sites these days. Korean prosecutors have arrested the CEOs of five media storage companies for alleged violation of copyright laws, but critics believe that hosting streaming videos of anti-government candlelight vigils might have something to do with the arrests as well, according to the Korean newspaper Chosun Ilbo.

The paper reports that two of the five companies targeted were Kutech and Nowcom. Kutech runs the popular Endisk site, while Nowcom maintains a site called PDBOX that offers media storage and P2P video streaming. Nowcom also maintains a similar service called Club Box, as well as a YouTube-like site called Afreeca.com. Critics charge that Afreeca is the real target of the crackdown because it has been hosting government-critical programming and video recordings of the recent protests against meat imports.

South Korea has one of the highest broadband penetration rates in the world; 40 MBit connections in the home are not uncommon. Koreans used to make use of these fast connections by swapping files P2P-style, but users have migrated to web-based storage solutions since the popular file-swapping system Soribada was forced to shut down in 2005.

Webhard, one of the oldest and most popular storage platforms, is run by LG. Indeed, “webhard” has become synonymous with web storage, much like Kleenex is with tissue. The company has, however, gotten lots of competition in recent years from sites that offer large amounts of free storage as well as added bonuses, like video streaming: Endisk offers its users up to 1 TB of free storage; PDBOX gives away 100 GB of storage to new users.

Free accounts do, however, have limited download speeds. Users have to buy or earn rewards points to get faster downloads, and you can earn points if other users download your files. This rewards system seems to be at the core of the investigations against the companies involved. Prosecutors have told Chosun Ilbo that the company rewards heavy uploaders with up to 10 percent of the money it makes from movie downloads.

Webhard services have been targeted by prosecutors and the entertainment industry for a while now, but Korean activists have always criticized efforts to shut down or restrict those services as heavy-handed and “a surrender (…) to pressure from the U.S.”

Anti-U.S. sentiments are also at the core of the dispute about the recent crackdown. Protests against the government’s decision to allow imports of U.S. meat have hit the Korean government hard in recent weeks. Nowcom execs believe their company was targeted because it offered these protests an online forum, according to JoongAng Ilbo. The newspaper quotes a company statement as saying:

The arrests naturally make us question whether the government authorities are conducting this probe with a politically motivated intention to prevent the expansion of candlelight vigils. Nowcom never helped Internet users infringe upon copyrights of materials.