Thanks To Streaming Fragmentation, Bittorrent Traffic Is Suddenly Rising In Traffic Share

from the equal-and-opposite-reaction dept

When it comes to the type of traffic the content industries are worried about regarding piracy, the present is no longer the past. You can see this in many ways, such as anti-piracy efforts largely focusing on illicit streaming sites, the trend in laws and takedown notices also targeting streaming sites, and the overall messaging coming out of the copyright industries about how evil streaming sites are with little distinction between the legal and illegal. All of this has been built in part on the realization that bittorrent traffic, the piracy metric of a decade ago, has been steadily dropping in its traffic market share for several years. Combined with a drastic rise in streaming traffic share, the takeaway was that pirates weren't downloading any longer and were instead streaming.

The other side of that conversation is how good, convenient streaming services like Netflix and Amazon Prime Video have taken away some of the impulse for copyright infringement as well. It turns out that if you give the public access to what they want at a reasonable price and make the content easy to get, there's no longer a need to pirate that content. Who knew?

Unfortunately, the past few years have seen a drastic fragmentation of the streaming market. Where there was once the need to essentially have one or two streaming services to get most of the content you want, exclusivity deals and homegrown content created by the streaming companies themselves has carved out more borders in the streaming services industry, often times requiring many streaming services to get the content people now want. And, because every action has an equal and opposite reaction, Canadian broadband management company Sandvine is reporting that bittorrent traffic is suddenly on the rise.

Globally, across both mobile and fixed access networks file-sharing accounts for 3% of downstream and 22% of upstream traffic. More than 97% of this upstream is BitTorrent, which makes it the dominant P2P force. In the EMEA region, which covers Europe, the Middle East, and Africa there’s a clear upward trend. BitTorrent traffic now accounts for 32% of all upstream traffic. This means that roughly a third of all uploads are torrent-related.

Keep in mind that overall bandwidth usage per household also increased during this period, which means that the volume of BitTorrent traffic grew even more aggressively.

That trend is being mirrored in other regions around the world as well. Once thought to be the declining method for filesharing, bittorrent is suddenly making a traffic comeback. And the reason is the fragmentation in the streaming marketplace. Again, there are both real dollar costs and mental transaction costs that come along with signing up for multiple streaming services. Asking a person to subscribe to 3-6 streaming services to get the kind of content package that is now the norm is no different than a bulky cable bill with multiple and complicated packages. In addition, this streaming service bloat also mirrors what cord-cutters have been running away from for years, which is the cost associated with access to all kinds of content the customer has no interest in. In other words, the streaming industry risks making the exact same mistake the cable industry made with the exact same result in pushing people to pirate content.

And it's not just me saying so. Sandvine's report reaches the same conclusion.

“More sources than ever are producing ‘exclusive’ content available on a single streaming or broadcast service – think Game of Thrones for HBO, House of Cards for Netflix, The Handmaid’s Tale for Hulu, or Jack Ryan for Amazon. To get access to all of these services, it gets very expensive for a consumer, so they subscribe to one or two and pirate the rest.

“Since these numbers were taken in June for this edition, there were no Game of Thrones episodes coming out, so consider these numbers depressed from peak!” Cullen notes.

None of this is to say that streaming and content companies can't produce exclusive content, or that every content creator should make their content available on every streaming platform. However, when the bittorrent traffic picks up, the industry also can't simply fall back on the "everybody just wants everything for free!" tired mantra that's been trotted out so often in the past. It's a direct result of the fragmentation, which is a business model issue.

Filed Under: content, copyright, exclusivity, piracy, silos, streaming
Companies: amazon, hbo, hulu, netflix

AT&T Is Very Excited To Try And Ruin HBO

from the ill-communication dept

Ma bell isn't much fun at parties. While traditional telcos desperately want to pivot from broadband and cable to video and online advertising, that transition has been challenging. Especially for a sector that has spent the last 30 years as government-pampered regional mono/duopolies. Many of these companies are good at running a network or lobbying government to stifle competition, but they're simply not very good at things like creativity, innovation, or disruption. That was recently made abundantly clear by Verizon's face plant after it tried to launch a sexy new Millennial-focused video platform dubbed Go90.

AT&T suffers from the same disease, and it may soon manifest in abundance.

You'll recall that AT&T's $86 billion acquisition of Time Warner was allowed to proceed after a comically narrow reading of the market by U.S. District Court Judge Richard Leon. At absolutely no point in his 172-page ruling, did Leon show the faintest awareness that AT&T wants to use the gutting of the FCC, the elimination of net neutrality rules, and vertical integration synergistically to behave anti-competitively in the broadband and streaming video space, something that's obvious to anybody that has spent thirty seconds watching AT&T do business.

Leon took AT&T lawyers' arguments completely at face value, resulting in him failing to even apply a single meaningful condition to AT&T's latest megamerger.

And while the death of net neutrality, regulatory capture and rubber-stamped merger mania are all wonderful things for AT&T, there's still one little problem AT&T needs to overcome in order to capitalize on its wide, open anti-competitive runway: it's just not very good at this whole creativity or innovation thing. While it's clear that AT&T executives think they're really good at innovation, there are growing concerns that the company is going to meddle with HBO and erode many of the things that made the channel a standout over the last twenty years.

AT&T execs initially stated they'd be leaving HBO alone to do what the company does best. But that promise quickly evaporated this week at a town hall meeting at the network’s headquarters in Midtown Manhattan, where AT&T execs like John Stankey proclaimed that AT&T intends to dramatically reshape HBO to effectively focus on quantity and ad impressions over quality:

Mr. Stankey described a future in which HBO would substantially increase its subscriber base and the number of hours that viewers spend watching its shows. To pull it off, the network will have to come up with more content, transforming itself from a boutique operation, with a focus on its signature Sunday night lineup, into something bigger and broader.

“I want more hours of engagement. Why are more hours of engagement important? Because you get more data and information about a customer that then allows you to do things like monetize through alternate models of advertising as well as subscriptions, which I think is very important to play in tomorrow’s world.”

Of course Netflix has been taking heat for focusing on quantity over quality, resulting in a string of high-profile duds. And AT&T's version of "monetization" has historically involved things like charging broadband users more money if they want to protect their own privacy. If you're an HBO exec and alarm bells aren't ringing in your ears, you likely haven't paid enough attention to AT&T's scattershot efforts to dominate media pre-merger. Stankey then tried to equate the experience HBO was about to go through under AT&T management to child birth:

“You will work very hard, and this next year will — my wife hates it when I say this — feel like childbirth,” he said. “You’ll look back on it and be very fond of it, but it’s not going to feel great while you’re in the middle of it. She says, ‘What do you know about this?’ I just observe, ‘Honey. We love our kids.’”

On the plus side, it's clear that AT&T wants to spend billions on original content to help the new AT&T-owned HBO to match Netflix blow for blow in the streaming wars. On the flip side, AT&T's corporate culture (indisputably anti-consumer, viciously anti-competitive and historically hostile) is inevitably going to clash with HBO management. HBO has creatively crafted some of the best television in the last decade. AT&T, in turn, has expertise in things like killing net neutrality and finding new, creative ways to rip off taxpayers and its own customers.

That there are going to be tensions between the two companies likely isn't debatable. And, while success is certainly possible, whether AT&T can shake off some of its own worst habits and "improve" HBO -- without eliminating all of its finest traits in the process -- is going to prove interesting to watch.

Filed Under: competition, content, content creation, hbo
Companies: at&t, hbo, time warner

HBO Wins Stupid Copyright, Trademark Lawsuit Brought By Graffiti Artist Over 2 Seconds Of Background Scenery

from the tag-your-it dept

Whenever a company like HBO gets targeted with a lawsuit over intellectual property concerns, you might think we find it tempting to jump all over them in each and every case. After all, HBO has the distinction of being notably horrible when it comes to enforcing its own IP, from shutting down viewing parties, to offering streaming options, to abusing the the DMCA process just to keep spoilers from existing, as though that could possibly work.

But the truth is the fun we have in cases where these types are found to be in legal trouble over intellectual property only extends to when that legal trouble is in some way warranted. When its not, we find that there is a helpful other party on which to heap our ire. That's the case in a lawsuit HBO recently won against graffiti artist Itoffee R. Gayle, who complained about his work appearing in a scene of the HBO show Vinyl. The court ruled that HBO's use was de minimis, or so fleeting so as to cause no injury and therefore not be actionable.

But just how fleeting was HBO's use? Well...

One episode of the show included a scene of a woman walking down a street in New York City where she passes by a dumpster tagged with graffiti that says “art we all.” The graffiti artist, Itoffee R. Gayle, claims that this depiction violated his copyright and trademark rights. According to his complaint, HBO never tried to contact him or license the graffiti. Of course, as the court agreed, HBO didn’t actually need to try to contact Gayle and no license fee was needed because not all copying is unlawful.

Looking at the use of the graffiti art in the episode, the court notes that Gayle’s claims “are premised on a fleeting shot of barely visible graffiti painted on what appears to be a dumpster in the background of a single scene” and that the art appears for no more than two to three seconds. Two to three seconds. Of an entire episode. Yup, sounds pretty de minimis to me. The court goes on, noting that the graffiti is not pictured by itself or close-up, plays no role in the plot, and “is hard enough to notice when the video is paused at the critical moment. It is next to impossible to notice when viewing the episode in real time.” The judge seems pretty annoyed by the copyright infringement claim, noting that “Gayle’s [claims] border on frivolous.”

I'll say this: the court showed far more patience and restraint than an Honorable Judge Geigner would have to Gayle. To waste the court's time with an argument over both copyright and trademark rights dealing with the background scenery of 2 seconds worth of film is so plainly absurd that anger is the only proper response. This was a clear money-grab and, frankly, one based on a premise of silly. It only takes a moment of backing up and thinking about what motivation HBO had here in using this scenery in this shot to know that nothing untoward was done with Gayle's art. It wasn't a theme, it wasn't featured, it wasn't referenced beyond barely being in the shot. It was entirely incidental.

The trademark claim fell for the same reason.

While Gayle attempts to argue that HBO intentionally picked this particular piece of graffiti art to use in the background, the court concludes, “HBO’s motive in depicting the graffiti is irrelevant to the de minimis inquiry.” The copying is not actionable, because its use was so small, even if there was a thematic reason for it. For similar reasons, the court also rejects Gayle’s trademark claims.

It's long past time that courts start issuing some punishment to those that gum up the court system with this sort of bullshit. If nothing else, putting me in the corner of HBO deserves some sort of punitive action.

Filed Under: bacground, copyright, graffiti, itoffee gayle, trademark
Companies: hbo

The Standalone Streaming Service HBO Didn't Want To Offer Now Has 5 Million Users

from the innovation-trumps-math dept

You might recall that just a few years ago, HBO had to be dragged kicking and screaming into the modern era. For years the company refused to offer a standalone streaming TV service, worried that it would jeopardize the company's cozy promotional relationship with existing cable providers (who often all but give away the channel in promotions). As recently as 2013 Time Warner CEO Jeff Bewkes was claiming that such an offering would make "no economic sense."

Why? Bewkes was worried that offering a standalone option would upset cable partners. At the time, those partners were already offering an HBO streaming app named HBO Go, but only if you signed up for traditional TV. This was art of the industry's walled garden "TV Everywhere" initiative, a misguided attempt at stopping cord cutters by only giving them innovative streaming services -- if they signed up for bloated, traditional television bundles. Bewkes was clearly worried at the time that being too damn innovative would upset industry executives and skew the company's balance sheets:

"And we would do it if we thought it was in our economic best interest. At this point we don’t think it makes sense. We don’t think the target market is sufficiently large to be attractive at this point. So what we’re doing, and we think this is working pretty well — we’re working with the [pay TV operators] to increase the penetration of HBO Go in a mutually beneficial way."

At the time we noted how HBO was letting fear trump innovation. The company was focusing so much on avoiding upsetting cable operators and worrying over the initial impact on the traditional cable TV cash cow, that it forgot that innovation often trumps the math. In reality, the math Bewkes was concerned about were performance and metrics built on a different, changing market that was on the way out. This kind of hesitation was initially great news for Netflix, whose CEO saw all of this coming long before HBO executives did:

"The goal," says Hastings, "is to become HBO faster than HBO can become us."

All the while, HBO and Time Warner's timidity and failure to listen to consumers resulted in many of its shows breaking piracy records. And while HBO couldn't be bothered to offer a legitimate standalone streaming alternative to piracy, it did spend a lot of time and money trying to derail these efforts, including "poisoning" seeded copies of HBO programs on BitTorrent and sending out oodles of nastygrams to ISPs. Other HBO executives, meanwhile, seemed to share the cable industry mindset that this whole cord cutting thing was just a temporary phenomenon that would blow over.

HBO finally did buckle to offering a standalone streaming service (dubbed HBO Now) in 2014. Just a few years later and the service has just breached 5 million subscribers. And oh, the numbers HBO was so worried about are looking solid too, with HBO Now generating $19 million in revenues for the two months it aired of Game of Thrones Season 7. In this case it all worked out well for HBO, but the company could have enjoyed a much healthier head start if it company executives hadn't let fear trump natural evolution.

Filed Under: a la carte, cable, hbo, ott, streaming, streaming tv, tv
Companies: hbo

Charter, Disney Execs Pledge To Crack Down On Streaming Password Sharing 'Piracy'

from the missing-the-whole-point dept

For years now Netflix and HBO CEOs have stated that they see streaming service password sharing as little more than glorified advertising. These execs have long argued that once users realize they enjoy the product, they'll usually sign up for their own account (something particularly true of kids once they leave home and get a job). Even then, these companies already impose a limit on the number of simultaneous streams their services offer, and already charge more for a greater number of streams -- so it's not like these companies are giving away the farm for free anyway.

But for the last several years incumbent broadcast and cable executives have been engaging in breathless hysteria regarding such password sharing. Charter CEO Tom Rutledge has grown increasingly agitated over the practice, arguing that HBO and Netflix's tolerance of password sharing shows a "complete lack of control and understanding in the space," while going so far as to argue that a "lack of control over the content by content companies and authentication processes has reduced the demand for video because you don’t have to pay for it."

Of course you may have noticed that the "demand for video" is higher than ever before, based on Netflix's now 50 million monthly streaming subscribers and the massive rise in all manner of viewing options. And Netflix CEO Reed Hastings (who understands his own business pretty well at this point) has gone so far as to state he "loves" the practice:

"We love people sharing Netflix," CEO Reed Hastings said Wednesday at the Consumer Electronics Show here in Las Vegas. "That's a positive thing, not a negative thing."...A lot of the time, he said, household sharing leads to new customers because kids subscribe on their own as they start to earn income.

Yet some cable and broadcast executives continue their bizarre assault on a problem that isn't. At recent industry events both Rutledge and Disney exec Justin Connolly lamented what they call a rise in password sharing "piracy," hinting that they intend to crack down on the practice in the near future:

"Tom Rutledge has had enough. The chief executive officer of Charter Communications Inc., which sells cable TV under the Spectrum name, is leading an industrywide effort to crack down on password sharing. It’s a growing problem that could cost pay-TV companies millions of subscribers—and billions of dollars in revenue—when they can least afford it.

“There’s lots of extra streams, there’s lots of extra passwords, there’s lots of people who could get free service,” Rutledge said at an industry conference this month...“It’s piracy,” Connolly said. “It’s people consuming something they haven’t paid for. The more the practice is viewed with a shrug, the more it creates a dynamic where people believe it’s acceptable. And it’s not."

You'd think Rutledge, the highest paid executive in America last year, would have a slightly better grasp on the industry he works in and where it's headed. Again, Netflix and HBO impose simultaneous stream limits, so it's not like they're giving away the store. And again, these executives have clearly stated they see password sharing as advertising, so calling it piracy makes no coherent sense. It's a reflection of the hubris often seen in the traditional cable TV sector, where they believe every natural market evolution is an existential threat.

Of course Rutledge is the same CEO that just spearheaded a completely botched merger with Time Warner Cable and Bright House Networks that resulted in higher rates, fewer upgrades, and higher prices. Rutledge's company is also currently being sued for failing to deliver advertised broadband speeds and for using hidden fees to covertly jack up service costs. Disney's ESPN properties, meanwhile, were so blinded by the belief they could nurse the traditional cable cash cow forever, they failed to see the cord cutting trend coming and have lost tens of millions of viewers as a result.

In other words, these two execs have plenty of other problems they need to deal with before focusing all of their ire on a problem that isn't. And when looking for advice on the evolving video market, maybe you should steer clear of folks that pretty clearly have little to no understanding of adaptation or where the market is headed.

Filed Under: justin connolly, password sharing, reed hastings, streaming, tom rutledge
Companies: charter, disney, hbo, netflix

After Previously Claiming the Economics Would Never Work, HBO Streaming Now A Major Windfall

from the evolution-doesn't-care-that-you're-afraid dept

For years, HBO and owner Time Warner fell into the trap of telling customers what they wanted instead of the other way around. You might recall that HBO and Time Warner spent years waging a rather scorched earth assault on piracy and other "unauthorized viewing," going so far as to poison show torrents and shut down "Game of Thrones" viewing parties. A major problem with this approach is that HBO wasn't fully providing pirates an alternative. While HBO was offering streaming to existing cable customers, it spent years ignoring consumer calls for a standalone streaming video platform that didn't require cable.

There were any number of reasons for this myopia, the biggest being that like any good legacy company, HBO and Time Warner execs were afraid of wounding the traditional cable cash cow (even if said cow was already showing signs of notable mortality at the time). More specifically, HBO was afraid of hurting the cozy, heavily-subsidized relationship HBO enjoys with many cable providers, who all but give the channel away on occasional promotion. So while offering a standalone streaming platform was essential in evolutionary context, HBO consistently insisted it just couldn't make the economics work for such an option.

So while Time Warner and HBO execs were busy trying to downplay cord cutting as a fad, the piracy of HBO programs continued to smash BitTorrent swarm and other piracy records. That was until March of 2015 when HBO was forced to finally acknowledge the changing tides and launched HBO Now, its standalone streaming app. Fast-forward a little more than two years, and that decision is looking pretty good now in hindsight:

The “Game of Thrones” effect is in full force for HBO NOW, the premium network’s streaming service for cord cutters. According to new data from app market data provider App Annie, the iOS and Android versions of the HBO NOW mobile app have together generated $19 million in U.S. revenue for the two months containing the airing of “Game of Thrones” Season 7, as of Monday, August 21.

App Annie says it expects HBO NOW’s mobile apps to pull in well over $20 million by the end of the month.

The show’s outsized popularity has again sent the HBO NOW app flying up the Top Revenue charts on the iOS App Store, too. Roughly one month after the Season 7 premiere, HBO NOW became the number one app in terms of Overall iPhone revenue. It grabbed that spot on August 16th, 2017, and remained the top app by revenue for two more days.

That's pretty good for a service executives had to be dragged kicking and screaming toward, though you'd wonder how much more successful the platform could have been with an earlier start. And while "Game of Thrones" piracy is still booming, and HBO is still sending nastygrams to user ISPs in the hopes of thwarting it, at least HBO is now offering these users a legitimate alternative. An alternative that could provide more value over time if HBO experiments with price, or works on partnerships with smaller ISPs that have been contemplating getting out of traditional cable TV because they lack the leverage to compete with industry giants.

It's a similar predicament that's now facing ESPN, which, like HBO, spent years believing it could stand in the wings nursing its cash cow with a dumb look on its face while the entire pay TV ecosystem shifted under its feet. With cord cutting, phase one usually involves denying that the trend is happening, followed by acknowledging the trend but insisting it's some kind of fad. That's usually followed by the pretense that you saw and prepared for the trend all along despite all the data showing the opposite. It's usually good to throw in some make believe about how you're the one that gets to decide when to adapt for good measure

There's no doubt that adaptation will make these companies less money over the short term, but executives often struggle to realize a core truth: they don't have a choice. Cord cutting and the shift to IP video is happening whether these executives like it or not, and they can choose to stand mid-river in futile opposition to the flow, or adapt and take an early hit as the legacy cash cow dies, but be much better positioned for the future, whatever consumers determine they want it to look like.

Filed Under: game of throwns, hbo, hbo now, streaming
Companies: hbo, time warner

As HBO Screams About GoT Episodes Leaking From A Hack, HBO Leaks Next GoT Episode Early

from the fine-everything's-fine dept

I love HBO's Game Of Thrones. I hate everything we have to write about it, however, because the stories are typically dumb in the usual ways that stories are dumb here at Techdirt. From HBO happily playing the evil villain in protecting the show's IP in the most overly-protectionist manner possible, to HBO screaming about the show being heavily pirated while everyone else comments about how good a thing that actually is, all the way up to the occasional overt hacking that occurs, where episodes from the show leak early, everybody freaks out, and then HBO and GoT go on to rake in tons of eyeballs and money anyway. One of these hacks just occurred, as you may know, resulting in a ransom not being paid to the hackers, who were then eventually arrested. While episode four of the current season did indeed get leaked, it wasn't the hackers who leaked it, but someone at an HBO distribution partner. So HBO screams about hacks while someone with in its own house is leaking episodes.

And now it just appears to have happened again. Episode six has now leaked out and fingers are being pointed at the Spanish division of HBO itself for the leak.

Trouble continues for HBO as another episode of the popular Game of Thrones series has just leaked online, days ahead of the official premiere. Copies of the sixth episode of the current season, titled ‘Death is the Enemy,’ are currently circulating on various streaming portals, direct download, and torrent sites.

At the moment it’s not confirmed how the leak came about but some suggest that it was leaked by HBO itself in Spain. Several people have posted screenshots and videos that suggest it was made public by HBO unintentionally.

With no counter-narrative yet from HBO, which you'll recall loves to scream about hacks and piracy, the accidental leak from HBO is the only explanation on offer as of the time of this writing. And, look, mistakes like this happen. The point of this post isn't to point the finger and laugh at HBO for accidentally leaking an episode itself.

No, the point is that these leaks just don't matter. The show continues to rack up the same astounding viewership numbers, leaks and all. It's wildly successful. It has been spun off into board games and all manner of merchandise. It's to the point that nobody batted an eye when HBO refused to pay the hackers' ransom to not release the episodes early. There would be no point. Hell, when the first four episodes of season five of the show were leaked early, that season broke the show's viewership records.

So chill, HBO. Leaks from hackers, leaks from distributors, and leaks from your own offices aren't going to bring the piracy dragons to your doors to destroy your keep.

Filed Under: game of thrones, leak
Companies: hbo

Court Sends John Oliver, HBO Back To State Court To Fight Bob Murray

from the what-an-odd-footnote dept

Second Bob Murray post in a day? Second Bob Murray post in a day! It would appear that the whole ACLU amicus brief side show will remain a side show. The federal district court has sent the case back to state court where it originated. We had written about HBO moving the case to federal court and (correctly) predicted that Murray would likely try to have it sent back to state court, but (incorrectly) predicted that it wouldn't work.

Just as background: in many cases, defendants want these cases in federal court because of the general belief (and you can debate whether this is accurate or not) that federal court judges are more sophisticated in understanding legal issues than their state court counterparts. This can be a little unfair to state judges (and a little too nice to some federal judges), but the general rule of thumb is if you have a strong case, it's better to be in federal court. But, this case is moving back to state court over lack of "diversity." I'll leave it to lawyers to offer a more complete explanation of diversity, but the short layman's version is that it's basically about whether or not the parties are in different states. If they are, you can move to federal court. If they aren't, you're in state court. As we explained, HBO/John Oliver had tried to argue that Murray's inclusion of various West Virginia companies that he owned was a fraudulent attempt to avoid diversity rules, as those companies weren't really mentioned in Oliver's piece. Murray and Murray Energy are based in Ohio. Oliver and HBO are based in NY.

However, here the court finds that it was proper for Murray to include the various West Virginia coal mining companies he owns as plaintiffs.

The Plaintiff Corporations in question were, therefore, properly joined, and the case should be remanded to state court. First, Mr. Murray is the CEO and director of each of the Plaintiff Corporations and is listed as the controller of the mines owned by those corporations. Not only is Mr. Murray heavily interrelated with these corporations in a formal business sense, but a reasonable person who knows of Mr. Murray, especially in West Virginia or another coal state, would find it nearly impossible to separate Mr. Murray from his corporations and mines. With such a strong interrelationship between Mr. Murray and the Plaintiff Corporations, defamatory statements made about Mr. Murray in his professional capacity may be easily seen as negatively implicating the operation of his corporations.

The court admits that the statements by Oliver were about Murray himself, and not his companies, but says the two are so closely identified with one another that it doesn't matter for this purpose. Also some of the comments Oliver made, while about Murray, were specifically about actions at Murray-owned companies.

The allegedly defamatory statements made about Mr. Murray did refer to him in his professional capacity. First, the Crandall Canyon Statement refers to a collapse at a mine Mr. Murray chaired and operated regarding the cause of the collapse. Second, The Black Lung Statement refers to Mr. Murray in his professional capacity because his decisions regarding Black Lung regulation would be made as the chairman and operator of the mines. The alleged “character assassinations” of Mr. Murray, including the Geriatric Dr. Evil Statement, refer to Mr. Murray in his capacity as a private individual because they bear no relation to his professional conduct. However, because the interrelationship between Mr. Murray and the Plaintiff Corporations is so strong, it is possible that those comments may defame the corporations if it was determined that the comments discredited the way the Plaintiff Corporations were operated. The Crandall Canyon statement implies that the Plaintiff Corporations are run by a dishonest figure, while the Black Lung statement implies a lack of care for the safety of Mr. Murray’s employees. Even without the character statements, there would be sufficient cause for the Plaintiff Corporations to have a possible chance of success in a defamation action based on comments made about Mr. Murray

Random aside: for reasons that I do not understand, in the midst of the above paragraph the court adds a footnote explaining Dr. Evil in much greater details than seems necessary.

1 For those who might not be familiar, Dr. Evil, whose real name is Douglas Evil Powers, gained notoriety as the villain of the Austin Powers film franchise. He is a parody of Ernst Stavro Blofeld, a nemesis of James Bond. Along with his cat, Mr. Bigglesworth, a colorful supporting entourage, and a plethora of secret lairs, Dr. Evil made several attempts at taking over the world, before ultimately finding redemption by the end of the final film.

First: SPOILER ALERT. And second, I mean, sure. That's a decent summary (and I must admit I don't remember Dr. Evil even having a real name, but it's been a while since I've seen the films), but I'm not sure why this footnote is necessary in a straightforward decision to remand. Almost feels like the judge wanted to get in something oddly humorous in such a weird case.

But back to the meat of the ruling. The court says that since the statements could defame the companies in West Virginia and (whoops...) HBO and those West Virginia coal companies are incorporated in Delaware, there's no diversity jurisdiction to move the case to federal court:

Defendants’ primary contention is that the Plaintiff Corporations were not properly joined because the defamatory statements were not of and concerning the corporations, giving the corporations no possibility of asserting a right to relief. As discussed herein, this Court finds that defamatory statements made about an executive of a business may be sufficient to defame his business where the statement was made about the individual in his professional capacity and reflects negatively on the operation of the business. Therefore, the Plaintiff Corporations may have been defamed by statements made about Mr. Murray, giving them a possibility of success in this action as set forth by Ashworth, 395 F.Supp.2d at 403. Because the Plaintiff Corporations have this possibility of success, they were properly joined. This joinder destroys the diversity jurisdiction, which would have allowed a removal to this Court because the Plaintiff Corporations and Home Box Office, Inc. are all incorporated in Delaware. Therefore, this action should be remanded to state court.

All in all, a pretty straightforward decision on remanding -- and, of course, it makes no statement on the merits (or lack thereof) of the actual defamation claims. This is probably not a big deal in the overall case, as Oliver/HBO's argument is much, much stronger when it comes to whether or not his statements were defamatory (as the ACLU so nicely explained in their now-irrelevant amicus brief), but it is at least something of a setback for Oliver and HBO. And, in case you're wondering, the 4th Circuit (where this is) does not tend to allow remand orders like this to be appealed. So they're likely stuck in state court. That's a bit of a hassle for Oliver/HBO, and a bigger annoyance for reporters like myself who do have access to federal court records while state court records in West Virginia are (annoyingly) not so easy to access.

Filed Under: bob murray, diversity, dr. evil, john oliver, remand, west virginia
Companies: hbo, murray energy