“Here’s how it works: Rightscorp identifies IP addresses sharing files via BitTorrent. The company then sends notices to those internet users via their ISPs. So, for example, if an IP address belongs to a Comcast user, Rightscorp sends the notice to Comcast, to then forward on to the subscriber in question.
The notices are “offers of settlement.” They threaten users with the maximum legal penalty — $150,000 — but say, basically, that if you just click here right now, for $20 per infringement we can just make this all go away.
50% of each settlement goes to Rightscorp, and the other 50% goes to the client who sent them. The biggest clients are record labels, according to Ars, with BMG alone accounting for about a quarter of Rightscorp’s revenue.
Most folks who might have illegally-obtained copies of a new pop album or last week’s Game of Thrones episode don’t have a spare $150k lying around, and when faced with a scary-sounding legal threat are probably more likely to pony up $20 or $100 than to take the (expensive, time-consuming, uncertain) option of trying to defend their case in court. Last year, people who received notices paid up to the tune of about $750,000.”