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Let's say you own a website and you post a picture of Pamela Anderson on it. Everyone someone downloads that picture from your website it costs you bandwidth. Each website has a set amount of bandwidth they can use in their monthly hosting package. The more people who view that photo on your website, the more it costs you in bandwidth. But that's ok because the more people that visit your website (in theory) the more money you are making.
But now imagine some guy who runs his own website likes your picture and want to display it on their website and instead of just out right stealing it (file, save as and then uploading it to their own server), they find it's best to just display it by pulling it from YOUR server and as a result it will cost YOU bandwidth. Now you get all the expense of the traffic without the benefit of the exposure and that means no revenue from that traffic.
I started in this business in 1996. From 1996 to about 2001 the cost of bandwidth was insane. More so than I even care to think about right now. So hotlinking even one photo could have been VERY costly for a website owner.
I can remember before the days of CPANEL and hotlink protection programs doing daily checks to see if anyone was doing it because if you let it go to long unchecked and it hits you, it could cost you thousands.
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