The Biggest Streaming Service Has Just Been Shut Down by the FBI

Summary

• Five men have been convicted for running the streaming service Jetflicks, which illicitly had more content than major platforms combined.
• Jetflicks reproduced thousands of copyrighted TV episodes without authorization using sophisticated software from pirate websites.
• The FBI in Washington and Las Vegas investigated the case. The defendants face prison time for conspiracy to commit criminal copyright infringement and money laundering.

According to the Department of Justice, “A federal jury in Las Vegas convicted five men this week for their roles in running one of the largest unauthorized streaming services in the United States, which generated millions of dollars in subscription revenue while causing substantial harm to television program copyright owners.” The streaming service was called Jetflicks and had more content than Netflix, Prime Video, Hulu, and Vudu combined, and charged people $9.99 a month. As the DOJ press release states:

The Jetflicks group used sophisticated computer scripts and software to scour pirate websites for illegal copies of television episodes, which they then downloaded and hosted on Jetflicks servers. The group reproduced hundreds of thousands of copyrighted television episodes without authorization.

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A Multimillion Dollar Scheme Leads to a Prison Sentence

Just five people operated Jetflicks — Kristopher Dallmann, Douglas Courson, Felipe Garcia, Jared Jaurequi, and Peter Huber, all of whom were convicted for conspiracy to commit criminal copyright infringement. Four of the men face a maximum of five years in prison, while Dallmann also received two counts of money laundering by concealment and three counts of misdemeanor criminal copyright infringement, and thus faces a maximum sentence of 48 years in prison. The FBI in Washington and Las Vegas investigated the case.

David Sundberg, Assistant Director of the FBI Washington Field Office, said in a statement:

“When complaints from copyright holders and problems with payment service providers threatened to topple the illicit multimillion-dollar enterprise, the
defendants tried to disguise Jetflicks as an aviation entertainment company
. Digital piracy is not a victimless crime. As these convictions demonstrate, the FBI will indeed investigate those who illegally profit from the creative works of others.”

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The Streaming Era Has Devolved Into Chaos

The success of Jetflicks signals a consumer desire for simplicity — one streaming service that collects everything in one place, the function that cable television used to serve. It also reflects the tenuous state of streaming these days, as if the only way to make money through streaming anymore is by doing it illegally. If you aren’t Netflix (or don’t have Jeff Bezos’ Amazon connected to your platform), it’s hard out there for a streamer. In “The Future of Streaming (According to the Moguls Figuring It Out),” a new report from The New York Times, the failing business model of streaming is laid bare:

“The once-mighty Paramount, which owns the famed Paramount studio, CBS and a bevy of cable channels, recently replaced its chief executive and failed to sell itself after months of negotiations. Warner Bros. Discovery is frantically paying down its $43 billion in debt. Disney laid off thousands of workers and pushed out its chief executive as streaming losses mounted, and had to fend off a proxy contest from the activist investor Nelson Peltz…”

“Paramount, the media empire controlled by Shari Redstone, lost $1.6 billion on streaming last year. Comcast lost $2.7 billion on its Peacock streaming service. Disney lost about $2.6 billion on its services, which include Disney+, Hulu and ESPN+. Warner Bros. Discovery says its Max streaming service eked out a profit last year, but only by including HBO sales through cable distributors.”

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It’s extremely difficult to maintain a profit as a streaming service; as executives of multiple platforms told The New York Times, you need at least 200 million subscribers to likely guarantee that, something only Netflix and Amazon have (when combined, Disney and Hulu have just over that). On top of that, a streamer needs to continuously add and produce new films and series. In 2024 alone, Netflix plans to spend $17 billion on producing original content, which is close to what it spent in 2022.

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As such, streamers are constantly experimenting with new models and mediums. Incorporating live sports has become popular on different streaming platforms, though it’s extremely expensive for the platforms. Netflix and others have experimented with video games, live comedy, and reality television. Netflix is even working on “experiential entertainment value” by opening Netflix House in two locations, where people can watch Netflix on the big screens of a movie theater.

The future of streaming is a tumultuous mystery, but as the Department of Justice showed this week, it all better be legal.

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