MPAA Secretly Settled With Hotfile for $4 Million, Not $80 Million

[CosaNostra]

Last December the MPAA announced one of its biggest victories to date. The Hollywood group won its case against file-hosting site Hotfile, who agreed to a $80 million settlement. However, this figure mostly served to impress and scare the pubic, as we can now reveal that Hotfile agreed to pay 'only' $4 million.

It’s been nearly a year since Hotfile was defeated by the MPAA, resulting in a hefty $80 million dollar settlement.

While the public agreement left room for the file-hosting service to continue its operations by implementing a filtering mechanism, the company quickly shut down after the settlement was announced.

As it now turns out, this was the plan all long. And not just that, the $80 million figure that was touted by the MPAA doesn’t come close to the real settlement Hotfile agreed to pay.

Buried in one of the Sony leaks is an email conversation which confirms that the real settlement payment from Hotfile was just $4 million, just a fraction of the amount widely publicized in the press.

“The studios and Hotfile have reached agreement on settlement, a week before trial was to start. Hotfile has agreed to pay us $4 million, and has entered into a stipulation to have an $80 million judgment entered and the website shut down,†the email from Sony’s SVP Legal reads.

Considering the time and effort that went into the case, it would be no surprise if the movie studios actually lost money on the lawsuit.

The good news for the MPAA is that the money was paid in full. There were some doubts if Hotfile would indeed pay up, but during the first weeks of December last year the $4 million was sent in three separate payments.

The huge difference between the public settlement figure and the amount that was negotiated also puts previous cases in a different light. It doesn’t take a genius to realize that the $110 million settlement with isoHunt and the $110 deal with TorrentSpy were just paper tigers too.

Whether or not the Hotfile case resulted in a net loss is probably not that important to the MPAA though. Hollywood mostly hopes that the staggering numbers will serve as a deterrent, preventing others from operating similar sites.