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Rightscorp, ‘We Aim to Protect Millions of Copyrights as we Continue to Lose Money’
May 14, 2014
Amanda Marie
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Welcome to the era of strict copyright protection enforcement in which we’re told is so important to pursue, but yet we see a company seeking even more copyrights to protect, that can’t seem to ever profit from doing so. On Wednesday, Rightscorp, Inc. announced its 1st quarter 2014 financial results, and while the "I’ll protect your copyright for you" business may be bringing in substantial revenues, the company’s bottom line on its profit and loss statement leaves very little to be desired. In the first quarter of 2014, the company revealed a net loss of $640k.

The first quarter of 2014 financial information for the company's "pay up or else" operations is as follows, as reported by the WSJ:

Financial Highlights:

• 284% increase in revenues to $188,933 for the first quarter ended March 14, 2014, from $49,256 for the same period in 2013 due to growth in copyrights, ingestion rates, and increase in settlements from cases closed

• 21.6% sequential increase in revenues from $155,381 in the fourth quarter of 2013

• Cash on hand increased 633% to $264,667 at March 31, 2014 from $36,331 at December 31, 2013

• $783,488 of equity capital received during the three months ended March 31, 2014, which led to a boost in ingestion rates of active copyrights into the Company's monetization system by 400%; and

• As of March 31, 2014, the Company is still set to receive a balance of $750,000 under the $2.0 million financing commitment obtained through its going public transaction.

Operational Highlights:

• Authorized copyright catalog increased to over 1.5 million, including many award-winning films, best-selling authors and over 13 tracks on the Billboard Hot 100

• Participation from Internet Service Providers (ISP) increased- Rightscorp recently announced it has received payments from over 70 ISPs, a 40% increase from year end 2013

• Company reports a boost in ingestion rates by 400% as a result of equity investment which directly impacts the Company's growth potential

• Reports more than 60,000 cases of copyright infringement closed as of March 31, 2014; and

• Expands its footprint globally into Canada with the engagement of Canadian Law Firm and files patents to operate in Europe, China, Israel, Japan, Brazil, and India.

Rightscorp CEO Christopher Sabec commented, "Our first quarter results represent a solid growth trend for Rightscorp. We continue to gather momentum on many fronts including the growth of our copyrights under representation, the ingestion of our authorized copyright catalog, and expansion in the number of ISPs that help monetize our business through settlements. We continue to make material upgrades to our technology and processes, which accelerate our ingestion rate and increase the base of participating ISPs."

Mr. Sabec continued, "As we look out over the next year, we expect to maintain our strong sequential quarterly growth. We now have more than 1.5 million authorized copyrights in our catalog. Each day we are ingesting content at an accelerating rate. At last count, we had run roughly 80,000 copyrights through our ingestion process; this leaves room for significant growth through the ingestion of this already approved copyright catalog. Existing clients, who have tested our service with a limited number of copyrights, are following-up by authorizing us to monetize much larger portfolios. We are currently in discussions with entities that own millions of additional copyrights, spanning various industries, including film, music, print, video games and software, in the U.S. and abroad."

With all that being noted, and also knowing that Rightscorp has plans to expand operations, Mr. Sabec has yet to comment on the massive losses the company is seeing. Asking an alleged pirate to pay $20 or else threaten them with litigation certainly isn’t working well from a profit standpoint, but yet the rightsholders and the ISPs are getting their share. While they continue to incur large operating costs during their massive growth of adding new copyrights to protect, at this rate it could be years before they ever see profit, if they ever do. It’s obvious that the company isn’t seeing that protecting the copyrights really isn’t worth anything to them. It actually costs them money to do so. But hey, who are we to judge. It’s all about protecting those copyrights by using scare tactics on alleged victims and hoping for settlements, right?


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