El paquete update -- Cuba's largest private employer?

For several years, I've been tracking Cuba's "paquete semanal," a weekly distribution of entertainment, software, games, news, etc. on portable hard disks and flash drives.

I've noted that the compilation and distribution of the material is well organized and complete, leading to speculation that it is run by the Cuban government -- it generates revenue, provides jobs and acts as an "opiate of the masses" -- who needs the Internet when you have el paquete? (There is precedent -- there used to be a government storefront in Havana where one could bring floppy disks and get copies of the latest software releases).

Even if the government does not run el paquete, they turn a blind eye to its very visible advertising and distribution. In return, the package (like the illegal local area networks) does not include any politically sensitive material.

ABC News reports that el paquete is Cuba's number one private employer, bringing in $4 million a month:

They do not cite their sources, but it is not an outlandish claim. I don't know how many people are employed in the private sector, but, considering the goofy list of jobs that are eligible for self-employment, it is believable that this popular, ubiquitous service could be the leading private employer.

And $4 million a month does not sound like a lot of revenue for such a widespread operation. According to the ABC report, terabyte hard drives with the week's material are delivered to customer's homes for 5 CUC (about $6.50). The subscriber copies as much as he or she wants and the drive is picked up the next day. That subscriber may, in turn, distribute material to others on flash drives or their own portable hard disks.

Elio Hector Lopez, who claims to be the head of el paquete, described a different price structure in a Forbes interview:

Most customers get the drive at home, where they exchange it for last week’s drive and the equivalent of $1.10 to $2.20. (Distributors selling to other distributors charge ten times as much.)

Regardless, $4 million seems plausible. Lopez went on to say that the original founding group had broken up, but evaded the interviewer's questions about operational details.

The following video gives a view of the distribution of el paquete:



It includes an interview of "Dany Paquete" (shown above), a 26-year old "who looks more like a lazy college sophomore than a kingpin of a national blackmarket of pirated media." He is one of two competing national distributors in Havana.

The documentary does not disclose details on the gathering of information, but suggests that editors in Miami and Havana select movies, music, etc. each week.

Dany sounds more like an MBA business man than a drug dealer and is unafraid to appear on camera. The Cuban government clearly tolerates el paquete. Even if officials are not being paid off, it satisfies many consumers, making them less likely to press for open Internet access. Had he been writing today, Karl Marx would have said "el paquete is the opium of the masses."

I recently had an opportunity to ask a senior State Department spokesman whether el paquete copyright violation had come up during discussions with the Cubans and he said "no," but the agenda of Bilateral Commission includes discussion of claims for damages. The focus will no doubt be on Cuban claims for damages resulting from the embargo and US claims for nationalized property -- might that be stretched to include "Orange is the New Black?"

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Update 11/25/2015

A recent news report sheds light on the economics of el paquete distribution. It features the video shown below -- an interview of an anonymous distributor of el paquete to end users. He pays $2 a week for the paquete and the price he charges his customers is a function of the amount of data they copy. For example, eight Gbytes costs 10 Cuban pesos, about 50 cents. To become a distributor, he had to invest in a computer -- an old tower PC -- and portable external hard drives.

Distributing el paquete is a side job. He earns about $32 a month, which he uses to buy extra food -- and he sees the latest episode of his favorite TV shows.

El Paquete and Mi Mochila -- sneakernet competitors

I would be curious to know how one submits and ad or music video for distribution in El Paquete and who and how much they pay to have their material included.

Michael Voss (@mvosscuba) of CCTV just did a news segment on El Paquete, a weekly distribution of entertainment and information on flash drives. Voss says El Paquete, which sells for about $2 per week and is available throughout Cuba, has has increasing amounts of advertising, like this ad for a local restaurant:

and videos of Cuban talent like Joel La J, lead singer for the band Los Metalicos.

El paquete is a cool response to a lack of connectivity, but I am left wondering who is assembling this material. Voss says "there's no single person or organization putting the weekly package together; rather it’s a loose knit grouping (sic) across the country." That does not answer my question though -- there are many neighborhood distributors, but who compiles the material?

Cuban blogger Isbel Diaz Torres (@Isbel_oc) has suggested that El Paquete might be produced by the government. I would be curious to know how one submits and ad or music video for distribution and who and how much they pay to have their material included.

El Paquete seems to have a sanctioned competitor in Mi Mochila, a collection of material curated and distributed by the Joven Clubs. Unlike El Paquete, the source of Mi Mochila is known and, as a Joven Club project, it is sanctioned by the government.

Is this inter-government competition? Regardless, I expect that the issue of government sanctioned copyright violation will have to be addressed during the negotiations leading to the US and Cuba establishing diplomatic relations.

The CCTV segment:



Update 8/11/2015

The BBC reports that "the advertising firm ETres offers Cuban businesses such as restaurants, photographers and beauty salons the opportunity to reach their prospective clients for a fee via the Paquete."

The Miami Herald also has an article on the return of advertising to Cuba.

Please, Cuba -- no billboards!

At most, allow murals and street art like "Wrinkles of the City:"

Cuban government support of the weekly "packages"

Cuban blogger Isbel Diaz Torres has written a two part post on the information "packages" that are distributed each week in Cuba.

In part one, he lists 12 factors that lead him to believe that the Cuban government may be behind these weekly packages. I will not list the 12 factors here -- you can see them in his post -- but he makes a compelling case that the package service could not run as smoothly as it does without government participation or approval.

In part 2 he discusses the motive the government might have for supporting the service. Since the weekly packages include current television program episodes, movies, magazines, etc., they supply weekly entertainment, eliminating what may be the key factor behind people's desire for Internet access. He also lists other, very limited, services that the government argues substitute for Internet services. He speculates that the government wants to be able to claim that Internet access is not needed because Cubans have everything they want without it.

One cannot know whether Torres' hypothesis is true. The weekly packages are surrounded in mystery. I have asked many people who distributes them and how they get the material into Cuba and no one seems to know.

If the government is behind the weekly packages, I would suggest a simpler motive than trying to rationalize a lack of Internet access -- money. The packages are a going business with an established curating and distribution organization. Someone is making money and it might be the government or a friend of the government.

The Cuban government says information technology is now a priority, but they are limited in what it can afford.

They could surely afford to institutionalize and upgrade the weekly "sneaker net" if they were sincere. The people curating and distributing the material could be recognized as small businesses and new types of material -- like news and education -- could be included.

The big stumbling block would be copyright. The government might not want to acknowledge copyright violation. If they chose to worry about copyright, they could negotiate block licenses with the owners of the material. Since they not getting any royalties for Cuban distribution today, low royalties, perhaps with a promise of increases over time, could be negotiated.

I've made a couple of other low cost proposals the Cuban government could implement in the short run -- a satellite pilot trial leading, if successful, to a broader roll out.

If they are sincere in the desire to prioritize information technology, they could also get behind and extend the weekly packages.

Cuba's sneaker net

Yaima Pardo, 34, in her home in Cuba as she describes her project PaSA
(Paquete Semanal Autnomo), an independent weekly digital-media package for Cuba

A recent article (English or Spanish) describes the black market distribution of music, soap operas, TV programs, movies, magazines, Web sites, etc. on flash drives.

There is a tiered distribution system. A terabyte drive arrives each week in Havana and is replicated for distributors and eventually sold to end users on the street or delivered to homes. While the material is generally sold to the end user, ads are starting to pop up on distributions. The article does not say whether there are competing distribution networks or how material is selected for inclusion. A detailed description of the process would be most interesting.

The distributions contain no political messages or pornography. The article quotes one person as speculating that Cuban authorities might tolerate the weekly “packages.” It is not clear to me whether the master packages are downloaded or brought in on portable drives, but the authorities turning a blind eye would facilitate either means.

The article also describes PaSA (Paquete Semanal Autonomo) a project of film maker Yaima Pardo. Pardo and her colleagues hope to produce an independent, weekly digital-media package that will be open to more controversial content and distributed for free.

How does one post material on the Cuban "sneaker net?"

Warhol P has written a Havana Times post on the Cuban "sneaker net" -- the circulation of movies, TV shows, software, etc. on flash and hard disk drives.

He reports prices of 50 Cuban Pesos (around $2) for 80 to 500 gigabytes of material and 10 Cuban Pesos for 8 to 16 gigabytes. (These days one can get 64GB USB-2 flash drives for under $30 and 128 GB drives for under $50).

Warhol P says home delivery service is available and some consumers go to the home of the supplier to put together a package in accordance with their preferences. Other suppliers rent out hard drives for three to four days for a little over 4.00 Cuban Convertible Pesos (around $4).

But I have a question -- how does one gain access to the sneaker net? For example, I have developed some Spanish language tech teaching material for young people. It is under Creative Commons license and I'd be happy to see it distributed in Cuba. I'd also like to see the Khan Academy teaching material distributed in Cuba using KA Lite, a packaging of the Khan Academy content for use off line.

Are the sneaker net distributions put together in the US? Are they pretty much only entertainment and software or are they open to other types of material? Is there a way to submit material for inclusion?

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Update 12/16/2014

I have asked how one gets information into the weekly "paquetes" -- who compiles and organizes the material and gets it to Cuba for distribution. People have offered speculation, but no answers. Isbel Diaz Torres of Havana Times has published a comprehensive description of the weekly paquetes along with the theory that they are so well organized, regular and done without interference, that their distribution must be "a Cuban government project, possibly developed in one of those mysterious agencies in the Ministry of the Interior, hidden from the public."

There is precedent for this theory. Years ago, I visited a government storefront office in Havana where one could get copies of any current PC software. You had to bring your own floppy disks for the copies and printer paper if you wanted documentation.

This post was Part one of two. I'm looking forward to Part two.

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Update 2/8/2015

In part two, Torres restates his hypotheses that the weekly packages of digital material are delivered by or in cooperation with the Cuban government and speculates that they are doing so in order to placate the Cuban people by giving them entertainment, saying

It’s a question of keeping the “masses” entertained, docile, isolated from true consumption, in other words, the well-known social control strategy used by States to guarantee governability and that Cuba is setting in motion at a time when less and less can be justified on the basis of Cuba-US conflicts.

He speculates that the government is counting on this affordable entertainment plus access to a few second-rate services on the Cuban intranet to satisfy the Cuban people. If that is the case, they are surely wrong.

Cuba's answer to bit torrent

Yoani Sanchez posted an anecdote about her 20-year old neighbor who exchanges and sells foreign television programs, music and films in a "dizzying variety and quantity" on flash drives.

Her post reminded me of the early days, when you could walk into a government storefront in Havana and get the latest software from the US copied onto floppy disks. You had to bring your own floppies and, if you wanted a copy of the manual, your own copier paper. I was surprised at how current the software was.

Do others have anecdotes or data on the traffic in flash-drive content -- cultural or political?