BUSINESS COMPANY TOWN

How an Atlanta power couple's business has heightened Hollywood and Silicon Valley's piracy anxieties

Jeffrey and Carrla Goldstein seem to have all the makings of a power couple from a reality TV show.

They host events for local religious groups at their tony mansion outside Atlanta, complete with a bowling alley and a mural of themselves posing with celebrities. A local news publication once referred to them as their community’s “Brad and Angelina,” and their twin children were reportedly featured on the TV show “Teen Cribs.”

But the pair’s ostentatious lifestyle has another side: A lawsuit accuses their company, TickBox TV, of being one of the most prominent and fastest-growing facilitators of online piracy. TickBox TV sells set-top boxes that promise free streaming of movies and television shows.

Piracy has long been a scourge of Hollywood, but the emerging technology sold by the Goldsteins has heightened anxieties about the industry’s vulnerability to copyright theft.

TickBox represents a new and growing type of copyright theft that uses streaming devices and apps to make piracy as easy and normal-seeming as watching movies through Apple TV or Roku. The devices, which are listed at about $150, come with instructions to load software “add-ons” created by third-party developers that allow users to stream video from the web for free.

Jonathan Yunger, co-president of film production company Millennium Media, bristles at the thought of TickBox and similar businesses profiting from the illegal use of his movies. Several of Millennium’s films, including “The Expendables 3” and “The Hitman’s Bodyguard,” have lost millions from online piracy.

They're profiting from stealing. The fact that people in this country can steal, and advertise it and profit from it, is disheartening.

Millennium Media co-President Jonathan Yunger

“They're profiting from stealing,” Yunger said. “The fact that people in this country can steal, and advertise it and profit from it, is disheartening.”

The couple and their start-up have drawn the attention of major Hollywood studios and, in a twist, their streaming rivals. Eight entertainment companies — Universal, Columbia, Disney, 20th Century Fox, Paramount, Warner Bros., Amazon and Netflix — joined to sue TickBox for copyright infringement last month, asking the court to shut the company down.

The complaint, filed in U.S. District Court in Los Angeles, accuses the company of selling TickBox TV “as a tool for the mass infringement of” copyrights to movies and TV shows. TickBox TV’s promise of free content has proved an attractive draw, luring half a million visitors a month, according to the complaint.

“TickBox promotes the device as the means to ‘cut the cord,’” the studios said in the complaint. “What TickBox actually sells is nothing less than illegal access to plaintiffs’ copyrighted content.”

The suit is the first legal action by Alliance for Creativity and Entertainment, a newly formed coalition of international studios, television networks and online video giants that have joined forces to combat piracy globally. For damages, they are seeking all of TickBox’s profits and up to $150,000 per infringed work.

Neither the company nor the Goldsteins responded to multiple requests for comment. They have not yet filed a response to the lawsuit.

TickBox relies on software called Kodi, an open-source media player that developers can modify with apps for watching films and TV. Kodi technology itself, which is maintained by software engineers who work voluntarily, is legal and has legitimate uses, experts said. Some people use it as a convenient way to access content from licensed sources.

But the technology also makes it vastly easier for consumers to watch stolen movies, TV shows and sports. A TickBox device, which connects to a TV, directs people to load software add-ons that allow users to search for movies and television programs online and watch them without paying. The add-ons scrape video content from websites to stream video, including live TV and sports, from the internet without authorization.

Kodi-based piracy is a growing threat. About 6% of North American households have a set-top box or streaming stick configured to access unlicensed files and streams, according to a 2017 study by data firm Sandvine. Worldwide, experts estimate, up to 30 million people have used add-ons to watch unlicensed content.

Pre-loaded boxes are easily found on sites including EBay and Facebook’s marketplace, for as little as $40 each, mostly sold by individual small-timers working out of their homes and marketing their devices as “fully loaded” or “jail-broken.” Bigger sites sell them for more than $200.

Anti-piracy groups estimate there are as many as 750 websites dedicated to selling pre-loaded boxes and distributing add-ons. Many of these sites buy blank devices from manufacturers in countries like Ukraine and China, and load them with add-ons that facilitate illegal streaming.

Because it is less cumbersome than traditional pirate sites such as the Pirate Bay, set-top box piracy also tends to attract older users and families, intellectual property experts said. It even looks more legitimate than typical infringing sites, with a user interface that resembles Netflix or Hulu.

“It’s growing because it’s so easy to use,” said Jan van Voorn, senior vice president of content protection for the Motion Picture Assn. of America. “It goes to a whole new audience that is not necessarily very tech savvy. On top of that, this provides you with a slick interface that’s friendlier and easier to use than other forms of piracy.”

The suit against TickBox is part of a wider crackdown on Kodi-powered piracy by the studios and streaming services. Software developers recently shut down multiple sites that provided illegal add-ons after receiving a letter from the anti-piracy group representing the studios and streamers. Last year, a man in Britain named Terry O’Reilly was sentenced to four years in prison for selling set-top boxes modified for copyright theft.

Despite the impact on their business, many filmmakers were surprised to learn of the new threat.

Gale Anne Hurd, producer of “The Walking Dead,” hadn’t heard of so-called Kodi boxes until a couple of months ago when anti-piracy activists showed her a demonstration in Washington, D.C. She said she was stunned by how easy it was to find illegal copies of TV shows and movies, including recently released “Victoria & Abdul,” and seamlessly watch them for free using Kodi-powered add-ons.

“It was far worse than anyone could've imagined, even me,” Hurd said. “I always thought piracy would be a step behind in terms of technology. And I was shocked.”

TickBox TV, which registered as a corporation in November, is based in an office park in Sandy Springs, Ga., according to public records. The company promotes its device as a way for consumers to avoid paying expensive cable bills.

Users can “plug the TickBox TV into your current television and enjoy unlimited access to all the hottest TV shows, Hollywood blockbusters and live sporting events in one convenient little device … absolutely free,” the company’s website said, according to the complaint. “Tickbox TV searches the internet where it will locate and stream virtually any television show, Hollywood movie or live sports event you want to watch … without you having to worry about paying rental fees or monthly subscriptions.”

Customers can use their remote control or keypad to search for movie titles by name. A search for 20th Century Fox’s movie “War for the Planet of the Apes” found 44 results for the big-budget film on various sites in September, when the film was not available for legal home viewing, the studios’ attorneys wrote. The user then picks which version to watch.

Until last year, Jeffrey Goldstein ran Impulse Marketing Group, an Atlanta-based company that provides digital advertising for the subprime credit industry, according to his LinkedIn page.

Goldstein has also maintained a side business called SideTick, a streaming service that lets users rent movies and TV shows. One of the shows promoted on the site is a video series called “Jeff and the Rabbi,” in which Goldstein and a local religious leader discuss current events and theology. The rabbi did not respond to a request for comment.

The Goldsteins have maintained a lavish lifestyle. Their four-bedroom, four-bathroom, 12,355-square-foot house has been used to shoot films, commercials and rap videos, according to a 2015 interview in the Atlanta Jewish Times. The lot features a four-sided infinity pool, while the house boasts a dining room with a Venetian ceiling and Fendi chairs.

“Our kids saw this old house go on the market. So we bought that and the house next door to demolish,” Jeffrey Goldstein said, according to the article.

There are signs of financial problems, however. Last year, a $986,023 state tax lien was filed against them, according to public records.

TickBox has recently toned down some of the marketing language on its website that advertises free access to content. Instead, the website now emphasizes its user friendliness and versatility.

The bottom of the site now includes a disclaimer: “TickBox TV should not be utilized to download or stream any copyrighted content without permission from the copyright holder.”

ryan.faughnder@latimes.com

@rfaughnder

Copyright © 2017, Los Angeles Times
EDITION: California | U.S. & World
53°