stories filed under: "streaming"

The NHL Comeback And The Opportunity In Streaming

from the the-league-with-the-least-to-lose dept

Wed, Jan 9th 2013 12:47pm — Timothy Geigner

I have long been a proponent of more widely available sports league streaming options as a method for building revenue. While I firmly believe in the concept of blackout-less and minimal cost streaming for anyone who wants to watch a game on the computer, tablet, or phone instead of on their television, I do understand that there are some hurdles to consider. Chief amongst those hurdles is the enormous contracts many of these leagues have with broadcasting partners, particularly network TV partners, which can present a great deal of friction to streaming services that aren't their own.

With all that said, if ever there was an opportunity to jump that hurdle, one embattled league would have it easier than the others, and that's the NHL. For anyone who isn't a hockey fan, the NHL lockout is essentially over and there will be a season this year. Like any league that has a work stoppage, however, one major concern is whether or not fans will come back to the sport after being denied the product for so long.

The pact is expected to last 10 years and split revenues 50-50 between owners and players, similar to the CBAs in the NFL and NBA. The players are set to return to the ice, but will NHL fans come back as well? The 2004-05 NHL lockout that wiped out an entire season did not keep fans away when hockey returned in October 2005. In fact, it was the exact opposite in many cases. Attendance increased for the majority of teams with nine teams experiencing a bump of at least 5% compared to the 2003-04 season. The Pittsburgh Penguins led the way with a 33% gain, as recent top draft picks Sidney Crosby and Evgeni Malkin made their Pens’ debut. Attendance for the Carolina Hurricanes rose 26% thanks to the team’s Southeast Division crown and first Stanley Cup title.

All of that is absolutely true, but there are a couple of things to keep in mind. First, other leagues that have had work stoppages haven't faired nearly as well. The best modern era example of a post-stoppage negative effect is the MLB player's strike of 1995, after which there was a nearly 20% decline in attendance and TV revenues fell sharply.

Secondly, not all NHL teams felt the post-stoppage bump described above. Those that did not tended to be the teams with limited television exposure in 2005. The best example of this is the Chicago Blackhawks, which blacked out all home games before and after the strike, with home attendance numbers falling in '04 from 13k fans per game to just under that number by '07. However, something magical happened in 2008: owner and blackout proponent Bill Wirtz died and his son immediately lifted the blackout restrictions. Attendance immediately rose as fans had a way to embrace the team regularly and then bought tickets, climbing to a peak of over 22k fans per game in '09.

Finally, note that the NHL is in the weakest position in terms bargaining power over TV contracts, because it receives so relatively little in revenue percentage from their main contract with NBC (who does offer limited streaming of one game per week or so).

NHL teams derived 47% of their revenues last season from arena revenues controlled by the fan. These include gate receipts, concessions and parking. The other half of revenues hail from media contracts, luxury suites, sponsors and non-hockey events. Of the major U.S. sports, baseball is the next highest at 46%, but that figure is set to drop with the explosion of local media deals in the sport like the impending Los Angeles Dodgers deal worth more than $6 billion. The corresponding percentages in the NBA and NFL are 34% and 24% respectively. The NHL simply does not have the media rights fee millions (or billions) the other sports possess.

This lockout presents the perfect opportunity for the NHL to embrace wide streaming of their games as a method for building current and future revenue through an expanded fanbase. We know that stoppages can and have hurt attendance. We know that the more options there are for fans to watch their teams play games, without restrictions, the better attendance comes back after stoppages. Finally we know that the NHL does not get the kind of broadcast fees the other leagues do, so they have the least to lose by going the non-traditional route.

The time for the NHL to embrace internet streams is now. Not with some NHL package that blacks out all the games of someone's home team. Real streaming, real exposure, real broadening of the NHL fanbase, leading to better attendance, more options for ad revenue, and ultimately more lucrative broadcast contracts.

Filed Under: fans, hockey, nhl, streaming

22 Comments

Disney Chooses Netflix As Its Exclusive Distributor Beginning In 2016

Culture

from the mouse-in-the-house dept

Wed, Dec 5th 2012 2:51pm — Timothy Geigner

Shock generally isn't an emotion I feel when I come across a story to write for Techdirt. Anger? Sure. Sadness? Of course. Dismay? You know it. But not shock. I can't say that's true in this instance. Recall two recent stories we've had about Netflix. The first is a piece I wrote about Disney opting out of their Netflix streaming deal, resulting in so-called Disney knock-offs to spring up to fill the void. The second is a story Leigh Beadon covered in which one television analyst somehow looked at parents having the ability to provide their children with more entertainment choices via Netflix and decided that was a bad thing, urging companies like Disney to veer away from Netflix altogether.

It would appear that Disney is now reversing course and embracing the ever-living hell out of Netflix as the future of its distribution model.

If you’re a Netflix subscriber and you have kids, you’re about to make those kids happier. Netflix and Disney just inked a new deal, making the former the exclusive American subscription TV service for “first-run live-action and animated feature films from The Walt Disney Studios.”

This marks the first time that a major Hollywood studio decided to side with a digital distribution rather than a traditional TV provider. The deal is also a high-water mark for a company that some were speculating was ripe for takeover as recently as last month.

According to the press release by Netflix, Disney's releases, and those of its subsidiaries (including, presumably, LucasFilm), will be available on all platforms beginning in 2016. Ostensibly, this would include Netflix's streaming platform, which is a break from Disney's previous dropping of streaming through NetFlix. Perhaps even more impressive, Disney is releasing at least a portion of their back catalog through NetFlix as well, as early as this coming year.

The article goes on to note that if you think this is a dagger in the heart for pay-TV, there's still another massive hurdle to leap.

“The pay TV business as we know it is on really safe grounds until sports distribution changes,” Cryan added. “It’s technically difficult to distribute that stuff online at scale. In addition to that, the business is stacked up so you pay a lot for ESPN and other sports channels not available elsewhere. Until that changes, the core of the pay TV business is on relatively safe ground.”

Now, I happen to think that sports streaming isn't the challenge Dan Cryan makes it out to be, but he's right that the barrier is still there and it's massive. Still, keep in mind that ESPN, unfortunately the king of cable sports, is a Disney owned operation. If the house of mouse is beginning to shift the aim of its movie distribution towards a digital provider, it isn't a huge leap to bring sports streaming along with it.

Filed Under: distribution, movies, streaming
Companies: disney, netflix

30 Comments

Case Against UCLA For Streaming Licensed DVDs To Students Dismissed Yet Again

from the good-rulings dept

Mon, Nov 26th 2012 4:31pm — Mike Masnick

A few years ago we wrote about how UCLA professors were barred from continuing an existing program in which they had streamed properly licensed DVDs to students. The lawsuit came from the Association for Information Media and Equipment (AIME). We noted that one of the key aspects of "fair use" is supposed to be that it allows for educational use, and it seemed ridiculous that any such streaming wasn't fair use. After thinking it over, UCLA decided to stand up for itself and put the videos back online. AIME sat on this for eight or nine months and finally sued, arguing that its contract with the University meant that UCLA had given up its fair use rights, and that even if it was fair use, it was a breach of contract. A year ago, the judge dismissed the case, mostly focusing on the question of whether or not AIME even had standing to sue and whether or not, as a state university, UCLA could hide behind a sovereign immunity claim.

AIME filed a new (amended) complaint against UCLA... which basically restated everything it had lost over, and then added a few claims. The court apparently was not impressed. It just dismissed the case all over again with prejudice, meaning that AIME can't just refile. On top of that it actually dealt a bit more with the copyright questions. First, it was not at all impressed by AIME's decision to just replead the same exact thing a second time:

In its order dismissing the FAC, the Court dismissed with prejudice all claims against the Regents and claims seeking damages against individual defendants in their official capacity on the grounds that these individual defendants are immune from suit under the doctrine of sovereign immunity... Plaintiffs have verbatim re-pleaded those claimsfrom the FAC for purposes of appeal.... As these claims have already been dismissed with prejudice, the Court does not analyze them further.

Later the court goes through a relatively quick fair use analysis, focused mainly on the question of whether it would have been obvious to the average person that this use was not fair use. The court finds plenty of ambiguity in the fair use analysis, and thus notes that it is not obviously a case of infringement, so AIME's claim that this was clearly infringement doesn't hold up.

Then there are a few other interesting points, including a discussion of whether or not streaming is a form of "distribution." Remember that we were just discussing the whole distibution right under copyright law, even pointing out that if you read what copyright law actually says, it only refers to "material objects" in which a copyright-covered item is "fixed" -- not to transient digital files. This appears to be one case where the court actually noticed that fact, and points out that with a stream, the digital product was not actually distributed:

Under the Copyright Act, distributed items must be “material objects” in which a copy is “fixed.” 17 U.S.C. § 101. Plaintiffs’ new allegations that “the Video Furnace system administrator retains an original copy of the AVP DVD while distributing copies to end users, which copies remain on the end user’s computer as long as the Video Furnace InStream player remains open” does not change this outcome. For a copy to be fixed, it must be “sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than a transitory duration.” 17 U.S.C. § 101. The “copy” on the end users computer, as alleged, is not fixed.

They also have an interesting response to the anti-circumvention DMCA claim in the amended lawsuit. One of the main problems many people have with the anti-circumvention clause is that it appears to apply absent any actual infringing activity. That is, under the DMCA it appears that merely circumventing DRM, even if for legitimate, non-infringing uses, is considered against the law. But here, the court rules that since the copy is legal, there is no problem with circumventing the DRM. That's very interesting:

This Court finds that Plaintiffs have failed to cure the defects with their DMCA claim. First, the allegations in the SAC do not support a claim that Defendants violated 17 U.S.C. § 1201(a)(1)(A) by using the HVS Video Furnace software to “circumvent . . . a technological measure that effectively controls access to” the DVDs because UCLA had lawful access to the DVDs and Plaintiffs essentially allege improper usage of the DVDs.

Either way, the latest ruling is a complete victory for UCLA and yet another loss for AIME. While the question of fair use is still mostly brushed aside (unfortunately), the overall ruling is a good thing.

Filed Under: copyright, fair use, sovereign immunity, standing, streaming
Companies: aime, ucla

Pandora: We're Helping Artists Make Millions & We'd Like To Keep Doing That

Culture

from the interesting-to-see dept

Wed, Oct 10th 2012 7:02am — Mike Masnick

For all the talk of new music platforms not paying artists enough, we keep hearing counter stories. The latest is that Pandora has revealed that two artists -- Drake and Lil' Wayne -- will make somewhere close to $3 million in royalty payments from Pandora this year. Lots of other artists make many thousands of dollars as well:

Have you heard of Donnie McClurkin, French Montana or Grupo Bryndis? If you haven't you're not alone. They are artists whose sales ranks on Amazon are 4,752, 17,000 and 183,187, respectively. These are all working artists who live well outside the mainstream - no steady rotation on broadcast radio, no high profile opening slots on major tours, no front page placement in online retail. What they also have in common is a steady income from Pandora. In the next twelve months Pandora is on track to pay performance fees of $100,228, $138,567 and $114,192, respectively, for the music we play to their large and fast-growing audiences on Pandora.
And that's just the tip of the iceberg. For over two thousand artists Pandora will pay over $10,000 dollars each over the next 12 months (including one of my favorites, the late jazz pianist Oscar Peterson), and for more than 800 we'll pay over $50,000, more than the income of the average American household. For top earners like Coldplay, Adele, Wiz Khalifa, Jason Aldean and others Pandora is already paying over $1 million each. Drake and Lill Wayne are fast approaching a $3 million annual rate each.

Of course, while all of this is happening, Pandora is not yet profitable, and may never be profitable -- as it is required, under current webcasting rates, to pay about 50% of its revenue out as royalties (while terrestrial radio and satellite radio get to pay much, much less). As Tim Westergren has pointed out, because of the crazy rates, plenty of other webcasting operations have just left the business entirely -- meaning that there just aren't that many players in this space, because it just isn't profitable for the companies, even as they're developing important new revenue streams for artists.

I'll have more on this later, but it often seems that legacy players really have no concept of "the golden goose." They assume that any tech company, who is moderately successful in getting users, simply should be bled dry, paying out just about everything to artists, with nothing left for the companies themselves. They think that the music is the entire value, and the service provided is not very important. And yet, without that service, none of that money would come in at all. At some point, the legacy guys are going to have to realize that they're better off having a healthy ecosystem of services, rather than squeezing the absolute highest rates out of these companies, in a way where they can't survive.

Filed Under: artists, business models, drake, internet radio, lil' wayne, money, royalty rates, streaming
Companies: pandora

44 Comments

Amazon Has A Long Way To Go In Europe For Streaming

from the not-there-yet dept

Fri, Sep 21st 2012 3:05am — Ben Zevenbergen

It's great to see Amazon launch its music service (cloud player) in Europe. Normally we should be rejoicing the news of more competition in the user-friendly supply of digital content. However, European music and film fans have become accustomed to disappointment pretty much every time such an announcement is made for one obvious reason: you know you need to check into which handful of countries the service will actually be launched.

In the case of Amazon, the service is initially only offered in three countries: the UK, France and Germany. iTunes, similarly, had a very slow start in 2003 and dealt with 8 years of negotiations to overcome the insane hurdles the European copyright system poses. After 6 years of very gradual expansion, Spotify is nearly half way to getting there.

The snail’s pace roll out of online media services to other countries in the supposed “biggest single market in the world” is mainly due to the fragmented markets for copyright licenses. In the European Union, there are 27 different national copyright systems, one for each Member State. Each system has their own set of collecting societies, which represent the world repertoire of music exclusively for their territory.

For a music service such as Amazon’s cloud player to roll out into Europe, this means it has to negotiate licenses for each country. No pan-European licenses exist at this moment. To make matters worse, it's not just one license per country, but typically between three to seven licenses, each requiring a separate negotiation, in each territory. Terms need to be agreed with 1) several collecting societies, 2) publishers, 3) record companies and since 2005 – after an interesting EU initiative, which backfired hard – 4) with the big record companies setting up their own collective licensing companies for their publishing divisions. Multiply times 27. And try not to cry.

There is a proposal on the table, which aims to solve this chaos with multi-territorial licenses. However, as we have discussed before, there are many problems with collective rights management and the proposed legislation. It will probably take longer to officially adopt the legislation enabling multi-territorial licenses to be agreed upon than for Amazon to complete the arduous European negotiations.

Companies like Apple, Amazon and Spotify are able to pay lawyers and negotiators for these lengthy negotiations. But could a bunch of guys in a garage who have developed the (potentially) next big thing in digital content distribution accomplish the same? It is highly unlikely, and therefore a huge opportunity cost for innovation due to short sightedness.

Filed Under: copyright, europe, fragmented, streaming

18 Comments

HBO Hooks Up Nordic Cord Cutters; Offers Standalone Streaming Service

Surprises

from the start-chopping dept

Tue, Sep 4th 2012 7:12am — Tim Cushing

HBO has been fighting cord-cutters in the US for the past several years, refusing to offer a standalone product in any form. Its mobile offering, HBO Go, requires purchasing a subscription to HBO, and even with all the cords still connected and money laid out on the table, you're still limited to certain devices. This insistence on keeping subscribers attached to cable companies they'd rather be living without has seen HBO consistently topping the "Most Pirated" charts. Obviously, HBO would prefer "Most Subscribed," but why buy the milk when you can get whole cow for free, minus the cableco remora?

In a move sure to please certain Europeans, HBO is now offering a completely cord-free option.

The service, named HBO Nordic AB, will allow customers in Sweden, Norway, Finland, and Denmark to stream subtitled versions of the same content available in the US. Original series like Game of Thrones and Boardwalk Empire, as well as movies that are featured by the channel, will be streamable at HBONordic.com.

The service is cheap ($6-12.50/month) and gives Nordic viewers a fairly good selection of the channel's offerings. As Ars Technica points out, this move may be a reaction to Netflix's announcement that it would be offering its services in the same region. No doubt HBO would be happier placing further down the "Most Pirated" charts and Netflix has been proven to be one of the better "pirate killers." Offering a reasonably priced streaming option with all normally-attached strings detached is a good start.

In addition to cordless service, HBO will also be shredding its usual timetable. Currently, weeks or months pass between original airdates and the programs' appearance in countries like Norway and Sweden. With HBO Nordic AB, programs will be available to stream within a few hours of the original airtime.

Providing a desirable service at a good price and with a minimum of windowed "scarcity" is one of the only ways to put a dent in filesharing. Hopefully, HBO recognizes this and considers expanding this service into other countries. Here in the US, unfortunately, the symbiotic relationship between the movie studios, cable companies and premium offerings like HBO is too far ingrown to imagine this has even the slimmest chance in hell of becoming a reality. But, if it knocks HBO off the "Sharing Is Caring" lists, who knows? Maybe everyone involved (or at least, two-thirds) will see the potential, rather than morosely counting the "potential" losses. I can't see an offering like this making US cable companies happy, but really, does anyone care if Time Warner, Comcast, Cox, etc. find themselves on the business end of "The Shaft" for a change?

Filed Under: europe, hbo, hbo go, nordic, streaming
Companies: time warner

22 Comments

How Copyright Has Driven Online Streaming Innovators Insane

from the insanity-defense dept

Fri, Aug 31st 2012 10:01am — Mike Masnick

A little over four years ago, we wrote about the Second Circuit appeals court's ruling in the case over the legality of Cablevision's remote DVR. As we said at the time, the court came to the right result -- the remote DVR was perfectly legal -- but had to twist itself into all sorts of crazy contortions to make that argument fit within the confines of copyright law. That's because of the nature of copyright law itself, which is almost always reactive to technological changes and, because of that, always gets twisted up when important, useful and disruptive innovations come along. As we noted four years ago, copyright law "is simply not set up" to handle something like a remote DVR. Even though a home DVR is clearly legal, and the only real difference between one at home and one in the cloud is the length of the cord between the DVR and the TV, the legal arguments to make them both legal are quite twisted.

Since then, we've seen a whole bunch of startups try to offer variations of streaming video online -- often relying on that quite twisted ruling in Cablevision. Each time we write about them -- companies like ivi, Zediva and Aereo -- we tend to note that all of them are doing incredibly inefficient and convoluted things on the back-end to try to stay within the confines of the law, as established by the Cablevision ruling. But to any objective observer considering what makes the most sense for a company and its users, all of the Rube Goldbergian designs of these companies seem entirely pointless. The goal is the same: to reasonably offer streaming services that match what people can do at home with a DVR or a DVD player -- but it has to be twisted to make that work within the whacked out language of the law.

And that's because the law is never written with innovation in mind. Quite the opposite. The history of copyright law is that every time something new comes along, Congress duct tapes on some new "right" to make it work. The 1909 Copyright Act was driven by the scary, scary invention of the player piano, which was going to wipe out the sheet music business or something. But the internet mucks with all of that -- in part by bringing together different roles that had previously been separate. The end result is that different aspects of copyright law may or may not apply, depending on where you sit.

Law professor James Grimmelmann has picked up on this and written an absolutely brilliant piece over at Ars Technica, where he dives into the nitty gritty details of all of this to explain how copyright law for streaming went insane. Here's the opening:

Suppose I could offer you a choice of two technologies for watching TV online. Behind Door Number One sits a free-to-watch service that uses off-the-shelf technology and that buffers just enough of each show to put the live stream on the Internet. Behind Door Number Two lies a subscription service that requires custom-designed hardware and makes dozens of copies of each show. Which sounds easier to build—and to use? More importantly, which is more likely to be legal?

If you went with Door Number One, then you are a sane person, untainted by the depravity of modern copyright law. But you are also wrong. The company behind Door Number One, iCraveTV, was enjoined out of existence a decade ago. The company behind Door Number Two, Aereo, just survived its first round in court and is still going strong.

The whole piece is totally worth reading. But it keeps going back to the same thing. Thanks to a combination of ridiculously antiquated copyright law and the 2nd Circuit's right result-but-for-odd-reasons ruling in the Cablevision case, we have a ridiculous setup where no one ever seems to take into account just what's happening for the end user, but rather focuses on the back-end to either jump through silly hoops (if you believe these services are legal) or to find questionable loopholes (if you're a copyright maximalist) to try to show that your service is legal. The end result is not only very bizarre, convoluted and inefficient systems that make no sense, and which no sane person would choose to set up as a business, but also one where we just see an ongoing stream of wasteful legal battles.

In talking about Zediva -- the company that set up individual DVD players in a data center which could stream only a single copy of an actual DVD playing at a time to a single user -- Grimmelmann again notes that none of this makes any sense:

And once again, it's a business model that would not exist in a world with copyright policy that was not demonstrably insane. Rapidly spinning optical discs make sense as a distribution technology because they're compact and durable. But they're a hassle and a half for playback, because they scratch, skip, and make random access a pain. If you're going to use the Internet for distribution, better to take the DVDs out of the picture and use them as coasters. But since Cablevision had opened up what seemed like a gap in copyright law, Zediva poured shiny lacquered discs into the breach.

Is there a way out of this that doesn't necessarily require a total dismantling of copyright law? Grimmelmann suggests that the more common sense (i.e., not insane) approach would be to actually look at what the end-user experience is:

Perhaps we can think about the problem of copyright on the Internet another way. Instead of asking which back-end technologies are legal, it might make more sense to ask what it is legal for users to do with computers on the front end. This approach would let people spend less time worrying about the exact definitions of "reproduction" and "performance" and more time thinking about users' rights, especially under fair use.

Cablevision itself illustrates what might have been. The whole point of the RS-DVR was that it was a perfect substitute for a home DVR. Reasoning by analogy, then, we might say that the two ought to either both be legal or both be illegal. And since home DVRs seem here to stay, it ought to be permissible for Cablevision to offer its customers exactly the same service they could have gotten by buying a gizmo. Call it "noninfringing personal fair use" and we can all go home.

Unfortunately, he notes that such a result wasn't possible in the Cablevision case, because Cablevision itself chose not to litigate the fair use issue in its case. End result? More insanity.

Of course, even Grimmelmann's solution potentially leads to some other issues, as well. For example, we've long argued that an embedded video on a website isn't infringing because it's no different than a link -- and that if there's infringement, it's from the uploader or hosting provider, rather than the intermediary who posted the embed code. But under Grimmelmann's "end user" analysis, then anyone who embeds could be liable as well, as to the end user, it wouldn't appear any different than a site that hosted the content. That raises some difficult questions as well.

But there's a reason for that: because these laws were designed for a very different era and very different technology. The concept of an open internet, and even something like an "embed code" is completely foreign to copyright law, meaning that it's legality is very much in the eye of the beholder. And really, that just serves to highlight the real problem here: copyright law isn't built for modern technology, and that's creating all sorts of problems for innovative services.

Either way, Grimmelmann's whole article is absolutely worth reading, so go check it out, even if it may make you bang your head repeatedly at the pure insanity of the situation we're in today.

Filed Under: copyright, insanity, streaming
Companies: aereo, cablevision, ivi, zediva

27 Comments

Court Says You Can't Innovate If It Would Negatively Impact NBC's Business Model

Innovation

from the of-course-not dept

Tue, Aug 28th 2012 10:52am — Mike Masnick

While there's been a fair amount of focus lately on the legal status of Aereo, the company offering broadcast TV over the internet by setting up a bunch of individual antennas and letting people access them online, there's also the ivi case. ivi, if you don't remember, offered what sounds like a very similar service to stream broadcast TV over the internet (for a fee). However, it used a completely different legal theory, believing it had found something of a loophole in the Copyright Act; namely Section 111 which allows cable providers to rebroadcast content for a compulsory payment to the Copyright Office.

The district court was not impressed, and basically said that ivi was trying to do an impressive tapdance -- defining itself as a cable provider to be able to use Section 111, but then claiming it was not a cable provider under the Communications Act. On appeal, ivi has lost again (pdf and embedded below), as the appeals court went a simpler route, and pointed out that reading the legislative history of Section 111 makes it clear that it was not intended to be used by services over the internet.

While I had bounced around on this earlier, I actually think that the court is probably right here, in terms of what Congress' intent was.

There still are some troubling parts to the ruling, mainly concerning purely faith-based claims by Judge Denny Chin that a service like ivi creates irreparable harm to the TV networks. Chin specifically claims that if ivi streams the videos online it hurts the networks:

First, ivi's live retransmissions of plaintiffs' copyrighted programming over the Internet would substantially diminish the value of the programming.

I don't see how that's true at all -- and it's certainly not obviously true. In fact, it could increase the value of the programming by making it easier and more convenient for more people to watch. Judge Chin tries to back up this statement by arguing that because the TV guys often sell ads targeted at specific segments and times, this could mess with that:

Plaintiffs broadcast their copyrighted programming to various communities at different scheduled times, for example, based on time zone or local network provider. For this reason, negotiated Internet retransmissions -- for example, on Hulu.com -- typically delay Internet broadcasts as not to disrupt plaintiffs' broadcast distribution models, reduce the live broadcast audience, or divert the live broadcast audience to the Internet.

If ivi were allowed to continue retransmitting plaintiffs' programming live, nationally (and arguably, internationally), over the Internet, and without plaintiffs' consent, ivi could make plaintiffs' programming available earlier in certain time zones than scheduled by the programs' copyright holders or paying retransmission rights holders. ivi's retransmissions of plaintiffs' copyrighted programming without their consent thus would devalue the programming by reducing its "live" value and undermining existing and prospective retransmission fees, negotiations, and agreements. ivi's retransmissions would dilute plaintiffs' programming and their control over their product.

But... that makes no sense. If that's true, then one could just as easily make the same argument about VCRs or DVRs. Yes, they disrupt the "traditional" way that a certain industry's business model works, but that doesn't necessarily mean that it's automatically diminishing the value of the original. After all, the TV guys made the same arguments about both VCRs and DVRs and now most of them admit that the DVR has actually helped their business by increasing the value of shows by making them more easily watchable by people. There's no reason to think the same thing wouldn't be true here.

In the end, as we argued from the beginning, the situation with ivi and Aereo (and Zediva and others) is silly. They're all looking for loopholes in the law to do what should clearly be allowed anyway. But because of the ridiculously expansive nature of copyright law, which is allowing legacy players to kill off new technologies, such things aren't allowed. And we end up with results like this, where an interesting concept (even if it tried to jump through crazy legal hoops) is flat out declared to break the law and shut down. Innovation be damned. NBC has to sell you more diapers via the commercials it's always sold in prime time. And you're not allowed to mess with that.

Filed Under: cable systems, copyright, innovation, online, streaming, tv networks
Companies: ivi

Indie Musician Zoe Keating Defines Transparency; Breaks Down Exactly How She Makes A Living

Business Models

from the can-i-get-a-matching-offer-from-any-major-label? dept

Fri, Aug 10th 2012 9:33am — Tim Cushing

We're used to hearing broad statements about the income of major labels, mostly about how little it is and why that needs to be "fixed." We've also shown how any disclosure about income from the labels is less than a one-way street (more of a cul-de-sac filled with vacant lots) when it comes to their own artists. When it comes to making a living by making music, it often seems that beyond very public Kickstarter campaigns, not many people actually know how much money is flowing to artists and from where.

Zoe Keating, who's been featured on Techdirt before, mainly due to run-ins with ASCAP and Universal, has opted to go fully transparent. She's uploaded a Google Doc, breaking down every source of income in detail. Hypebot breaks down the breakdown:

Clearly, the best way to support Zoe (and other independent artists like her) is to purchases directly from the artist. Just by taking a look at the pie chart, it is evident that the vast majority (nearly 97%) of her recorded music revenue comes from fans purchasing her music as opposed to streaming it. Less than $300 came from Spotify, while more than $45,000 came from iTunes.

“Music sales have been a consistent 60-70% of my total income,” Zoe told Hypebot. “The rest comes from concert fees and film/commercial licensing.”

Perhaps an unsurprising number, it nonetheless is a great reminder of why connecting with your fans is so important. If you can make that connection, it makes selling infinite items that much easier. As is pointed out by Hypebot, Spotify accounted for only $300 of Keating's income. This could be construed as being precisely what's wrong with Spotify, but Keating's take on this low number doesn't reflect that:

“The income of a non-mainstream artist like me is a patchwork quilt and streaming is currently one tiny square in that quilt,” Zoe said in her Google Doc.

She also doesn't seem to be concerned, as others are, that Spotify and other streaming services will supplant tracks sales and reduce her income.

Streaming is not yet a replacement for digital sales, and to conflate the two is a mistake. I do not see streaming as a threat to my income, just like I've never regarded file sharing as a threat but as a convenient way to hear music. If people really like my music, I still believe they'll support it somewhere, somehow.

This isn't to say she doesn't have any reservations about the streaming service. In her Google Doc notes, she points out that, at this point, she feels artists should view it more as "a discovery service rather than a source of income." This could change, though, if Spotify makes a few alterations. First of all, Keating would like to see it open its availability:

I've said multiple times what my issue with Spotify is: fairness. I care about making the playing field level for all recording artists: signed or unsigned. Let it be a meritocracy.

At this point, Keating is still unable to get one of her albums ("Into the Trees") onto Spotify due to the lack of a digital distributor who won't take a cut of her iTunes sales. In order to get her music on Spotify, she has had to run her albums through an aggregator (CDBaby, TuneCore, etc.) in order to make them available. As it stands now, her latest solo album isn't generating any Spotify income.

She also feels Spotify could turn itself into a better platform for musicians:

I wish Spotify would do more to facilitate the connection between listeners and artists - i.e. show that the artists is playing nearby, or add links to buy music. It's early days, so maybe this will happen eventually.

Away from the streaming front, Keating also addresses those who have suggested she leverage her success and sign with a major label to "extend her reach:"

My financial picture would be worse if I was on a record label. Some people say that if I was on a record label, I'd have a larger reach and therefore would be making more money. To this I'd like to point out that I make instrumental cello music. There is about as much chance of my music becoming mainstream as there is of me being elected President of the USA (hint: not possible, I was born in Canada and there are naked pictures of me at Burning Man). While it is probably true that the right label could help with the reach part, I don't think they could help me enough to offset their cut, and you know what….no label has ever approached me and the ones I've approached said no, so I'm guessing they think the same thing.

There's sure to be more discussions springing from this data and her comments. Having turned herself into a "data point," Keating is now encouraging all artists to do the same. As she points out, if we're ever going to figure out where the music industry's headed, we need to collect as much information as possible from where it is now. Hopefully, Keating's transparency will result in many more "data points" offering up detailed pictures of how they're making money by making music.

Filed Under: indie musicians, itunes, revenue, streaming, zoe keating
Companies: apple, spotify

Judge Posner: Embedding Infringing Videos Is Not Copyright Infringement, And Neither Is Watching Them

from the at-all dept

Fri, Aug 3rd 2012 10:22am — Mike Masnick

Recently we've seen a number of cases, both civil and criminal, brought against websites that involve either links or embeds of videos hosted elsewhere. UK student Richard O'Dwyer is facing extradition and criminal charges for hosting a site that did exactly that. But, as many of us have wondered in the past, how is such a site infringing at all? After all, the videos themselves were uploaded by other people to other sites. The streaming occurs from those other servers. The embed just points people to where the content is, but it does that neutrally, no matter what the content might be.

A few months ago, we wrote about how the MPAA had jumped into a copyright infringement appeal involving porn producer Flava Works against a video "bookmarking" site called MyVidster. The MPAA argued that links and embeds are infringing, in support of a questionable district court ruling against MyVidster.

The appeals court ruling has now come out, written by Judge Posner, and it's absolutely worth reading (embedded below). Posner goes into great detail about how MyVidster's linking and embedding features don't even come close to infringing. They're not infringement and they're not contributory infringement. He goes through a pretty accurate description of how embedding works, and why MyVidster is separate from the uploading/hosting/streaming. But then he notes that those watching the videos aren't even infringing, so there isn't even any infringement for MyVidster to contribute to:

Is myVidster therefore a contributory infringer if a visitor to its website bookmarks the video and later someone clicks on the bookmark and views the video? myVidster is not just adding a frame around the video screen that the visitor is watching. Like a telephone exchange connecting two telephones, it is providing a connection between the server that hosts the video and the computer of myVidster’s visitor. But as long as the visitor makes no copy of the copyrighted video that he is watching, he is not violating the copyright owner’s exclusive right, conferred by the Copyright Act, “to reproduce the copyrighted work in copies” and “distribute copies . . . of the copyrighted work to the public.” 17 U.S.C. §§ 106(1), (3). His bypassing Flava’s pay wall by viewing the uploaded copy is equivalent to stealing a copyrighted book from a bookstore and reading it. That is a bad thing to do (in either case) but it is not copyright infringement. The infringer is the customer of Flava who copied Flava’s copyrighted video by uploading it to the Internet.

Got that? It's actually important. He's saying that those who are watching a video that someone else uploaded are not infringing on the reproduction right under copyright. Only the uploader has potentially violated that right. So there can't be a contributory infringement claim over that right.

Of course, copyright includes a few other rights beyond reproduction. There's also the "public performance" right. After running through a few different theories there, Posner again finds no clear case of infringement.

Flava contends that by providing a connection to websites that contain illegal copies of its copyrighted videos, myVidster is encouraging its subscribers to circumvent Flava’s pay wall, thus reducing Flava’s income. No doubt. But unless those visitors copy the videos they are viewing on the infringers’ websites, myVidster isn’t increasing the amount of infringement.... An employee of Flava who embezzled corporate funds would be doing the same thing—reducing Flava’s income—but would not be infringing Flava’s copyrights by doing so. myVidster displays names and addresses (that’s what the thumbnails are, in effect) of videos hosted elsewhere on the Internet that may or may not be copyrighted. Someone who uses one of those addresses to bypass Flava’s pay wall and watch a copyrighted video for free is no more a copyright infringer than if he had snuck into a movie theater and watched a copyrighted movie without buying a ticket. The facilitator of conduct that doesn’t infringe copyright is not a contributory infringer.

In other words, the person watching the video isn't doing a public performance (though the hosting server may be). But since myVidster is only helping the person watching the video, then it's not violating the public performance right either.

As we noted in our post about the original case, part of the ruling hinged on myVidster losing its DMCA safe harbor protections by not having a repeat infringer policy. But Posner notes that the DMCA safe harbor isn't even in question here because those viewing the videos have not infringed and thus there is no copyright infringement related to myVidster for showing the embeds:

myVidster received “takedown” notices from Flava designed to activate the duty of an Internet service provider to ban repeat infringers from its website, and Flava contends that myVidster failed to comply with the notices. But this is irrelevant unless myVidster is contributing to infringement; a noninfringer doesn’t need a safe harbor.

This ruling makes it clear that watching embedded videos is not infringing and then neither is hosting the embed code. While limited to the 7th Circuit, this ruling could still be quite handy in a number of other cases, including O'Dwyer's and the Rojadirecta case, which also involves embedded videos. Eric Goldman is a bit more skeptical of the impact of the ruling, arguing that Posner reasoning isn't particularly clear (well, he calls it a "train wreck.") While I rarely disagree with Goldman, I'm not convinced that this is such a train wreck. While Posner's explanation is, at times, convoluted, he does clearly make the main point: if there's infringement, it's completely disconnected from the user watching the video and the site doing the embedding.

Either way, Posner vacates the lower courts ruling, and notes that there are a few other issues with the case (mainly having to do with some other aspects of myVidster's business), but the main fight shows no infringement. Oh yeah, and Posner doesn't even reference the MPAA's filing in the case, suggesting how compelling that argument was...

Filed Under: copyright, embedding, hosting, secondary liability, streaming, watching
Companies: flava works, mpaa, myvidster

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Court Says You Can't Innovate If It Would Negatively Impact NBC's Business Model

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Indie Musician Zoe Keating Defines Transparency; Breaks Down Exactly How She Makes A Living

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Judge Posner: Embedding Infringing Videos Is Not Copyright Infringement, And Neither Is Watching Them

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