French Consumer Group Tries To Win Back Resale Rights For Digitally Distributed Games

from the here's-hoping dept

We talk a lot about first sale rights and resale rights at Techdirt, but of particular frustration to me is the strange capitulation to companies that sell digital copies of software. This isn't a strictly American problem, though here in the States there has been a near total abandonment of the consumer's rights when it comes to electronically delivered entertainment, be it eBooks, music, movies or games. The "you're licensing the game you paid for, not buying it" line is, on its face, ridiculous, amounting to a situation where Game "X" bought on a disc can be resold, but Game "X" bought and delivered on the internet cannot. Why a delivery method would alter the right to resale a bought product because a EULA says so is a concept that simply escapes me.

Across the pond, a French consumer group appears to agree, and it is trying to specifically attack Steam and Valve on this front.

The 64-year-old UFC-Que Choisir (the "federal union of consumers") argues that Valve must provide the capability for Steam users to resell their legally purchased digital games whenever they want. While noting that many online stores have similar resale restrictions, the group argues that the difference between being able to resell a physical game disc and not being able to resell a digitally purchased game is "incomprehensible... No court decision prohibits the resale on the second-hand market games bought online, and the European Court has even explicitly stated that it’s possible to resell software which, let’s remember, is an integral part of a video game."

As that ArsTechnica piece updates further down the post, there's some question as to exactly how true that statement is. There have been European court rulings that specifically drew a distinction between software in general and software that contained a creative component. But that seems like an awfully fine line to draw as the basis for removing a consumer's right to resell what they've bought.

An aside: Imagine applying this situation to other forms of intellectual property law, for instance. Trademark chiefly revolves around real or potential customer confusion. To that end, governments employing trademark law claim to be concerned about the public's ability to understand what they're buying. Yet, when it comes to resale rights, this interest in customer confusion evaporates. Anyone wishing to claim that the average purchaser of a Steam game wouldn't be surprised to find its the seller's opinion that they haven't actually bought the game in the traditional sense at all may do so, but I reserve the right to laugh them out of the conversation.

What makes UFC-Que Choisir's claim particularly interesting is that it coupled its demand for resale rights on digital games with an attack for Valve's claim of ownership over user-created content.

In addition to the resale complaint, UFC-Que Choisir takes Valve to task for claiming the right to reuse any user-created content on Steam "at will." This clause "denies... respect for the users'/creators' rights of intellectual property," the group says.

This would seem to ask Valve and game-sellers to pick a lane: either creative content is worthy of protection or it isn't. Using a creative component of content to deny consumers their resale rights while then happily making use of those same consumers' creative works at the same time isn't consistent.

Now, to be clear, most of the people reviewing this attempt believe it will fail. We can hope, however, that some court somewhere might take the side of the consumer and their rights regarding digital purchases.

Filed Under: digital distribution, first sale, france, resale rights, steam, video games
Companies: valve

Indian Music Industry Exec Says The Unthinkable: 'Internet Piracy Is A Good Thing'

from the he's-saying-what-we're-all-thinking!-and-saying! dept

If you've followed this site for any length of time, you've heard many opinions on file sharing from many different people. While there are many who have taken a pragmatic or even receptive approach to file sharing (and seen a bunch of "freeloaders" cough up a whole lot of cash), there are many more who only see the downside of copyright infringement.

What you rarely, if ever, see is a top level executive of a major player in the content industry state, on the record, that not only is piracy a good thing, but it may also be a necessary thing. Here's Mandar Thakur, COO of Times Music, India, commenting on the internet's upheaval of the recording industry.

I may get lynched for saying this – but I have always believed that internet piracy was actually, in some ways, a good thing to happen to the industry. If not for that, the music industry would never have pulled its act together and embraced innovation and realised changing consumer behaviour and digital distribution. The challenges the music content industry faces are too vast to lay down here but the most significant one is the fact that the very core of the industry and its business dynamics have been shaken deep due to the consumer’s changed consumption habits and habitat, and its value proposition changed forever. It’s almost akin to consumers not wanting to pay to consume Coke/Pepsi anymore. In that sense it is as good as creating a brand new entertainment industry, creating brand new value and brand new revenue models at the same time as preserving the existing value/revenue base.

Now, before someone writes off Time Music as the equivalent of a boutique label run by three guys out of their stepdad's garage, let's take a look at the facts. Time Music, India is a division of the Times Group, the "largest mass media company in India," with annual revenue exceeding $1.5 billion and the employer of 11,000 Indians.

Much of what Thakur stated has been documented here over the years. Piracy may be a problem, but it's also a sign of disruption and an indicator of underserved markets. The problem with the American recording industry is that it spent much more time worrying (and attacking) the first item on the list while ignoring the other two. From what he's stated, Thakur is apparently uninterested in wasting much more time and money trying to eliminate file sharing. This should allow Time Music Inc. to devote those resources towards making money, rather than plugging leaks.

That he would come out and state this plainly probably won't win him any friends in the IMI (Indian Music Industry), the Indian version of the RIAA. Late last year, IMI filed a petition in support of India's IT Rules, pushing to be granted the right to take down content within 36 hours, without having to serve notice to the content creator or uploader.

Thakur may also begin irritating those even higher up on the food chain. IMI is part of International Federation of the Phonographic Industry (IFPI), best known around these parts for serving up an annual report on piracy that's riddled with factual errors and filled to the brim with pleas for various governments to save it from having to make forward progress.

Not only does Thakur view file sharing as a side effect of industry stasis, he also seems to have a good grip on what consumers actually want -- and how the rollout of better and speedier connections will continue this disruption (and its attendant opportunities).

Faster access at affordable prices has always created a massive boost for consumption. At one point it was content that was king, then the portable device became the centre of the digital universe and now it’s the war of the OSes. The underlying factor across all these spurring growth (or preventing growth) has always been access and in this particular case it’s the global LTE and LTE Advanced roll- outs that will accelerate growth, especially in large countries such as India, Indonesia and China. This [growth of access] will be nothing short of an internet revolution, due to the wide-scale consumption it will create as common people’s daily habits change.

This is also refreshing. Rather than viewing across-the-board increases in bandwidth as nothing but a more efficient conduit for infringement (see also: the MPAA's comments on Google's fiber rollout), he sees it for what it is: an new, rapidly expanding market.

It's great to see such clear thinking from someone inside the industry. IMI and IFPI may not be happy with a pirate-loving COO heading a major music outlet, but it appears he's in place to catch a new market on the upswing, an uncommon experience for those in his position.

Filed Under: consumer behavior, digital distribution, india, innovation, mandar thakur, music, piracy
Companies: time music

Hollywood Continues Its Plan To Kill Netflix

from the jealousy-is-no-strategy-for-business-success dept

It's really kind of amusing (and frustrating) to watch the entertainment industry look to kill every golden goose that comes its way. Any time a new offering is successful, the entertainment industry gets greedy and either tries to demand a much larger cut, more control... or it tries to kill off the offering because it has "too much power." We saw it with the labels, when they turned on iTunes (though Apple's been able to hold that together pretty strongly) and music video games. It's part of what's been driving the record labels to give Spotify such a hard time in signing a deal to bring the (rather successful in Europe) service to the US. And it's not just the recording industry. We've noted that Hollywood has now decided that Netflix has been too successful for them, and it's time to put the company in its proper place.

Thus, we're starting to see Netflix partners push back and start to limit what Netflix can stream. First it was Showtime pulling back from streaming its content via Netflix, and now it's Starz that's pulling back in a big way. That's pretty significant, because it was the original deal between Netflix and Starz that really jumpstarted Netflix's ability in the streaming space. The big studios have been complaining about the Starz deal for years, and it's not hard to see their hands in the company's decision to scale back its relationship.

It really is amazing. Some new service comes along that drags these industries -- often kicking and screaming -- into the modern era, and then starts making them lots of money. And suddenly the industry turns on them (and fans and consumers) claiming that these services are simply too successful and need to be cut down to size. It's really a case of the entertainment companies overvaluing the content over the service. They think that all the value is in the content, and if the services are making money and getting users, it's because they're somehow "exploiting" the content in unfair ways. On top of that, I really think there's a psychological issue, where the entertainment industry bosses still think that if anyone else is making a lot of money, it's "unfair" -- even if they're making plenty of money themselves.

Of course, these moves will backfire. It'll just make people on Netflix watch less of these companies' content... or seek it out from alternative sources that Hollywood probably likes even less.

Filed Under: digital distribution, movies
Companies: netflix, showtime, starz