Disney Sees Red Over Ruling on Download Codes

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Ever since sales of DVDs and Blu-ray Discs began their long eclipse behind the rise of more convenient digital alternatives the Hollywood studios have sought ways to extend the life of the high-margin disc business by finding ways to integrate disc sales with the broader digital economy.

The most systematic effort was the UltraViolet initiative. By creating an UltraViolet account, consumers could register their purchase of a DVD or Blu-ray Disc and obtain access to a digital version of the same movie, which they could then stream to connected devices without a DVD or Blu-ray drive, via participating streaming services.

Disney, which never joined the UltraViolet consortium, had its own version it called Disney Movies Anywhere (now re-christened simply Movies Anywhere and incorporating most of the former UltraViolet studios). Disney packaged its discs with an insert containing a code, which, when entered by the consumer in her online Movies Anywhere account allowed her to stream the movie through participating online services, or to download the movie onto up to eight registered devices.

DVD rental kiosk operator Redbox has likewise struggled with consumers’ declining appetite for DVDs and Blu-rays. It’s main strategy has been to keep its rental prices extremely low, which has often put it at odds with the studios, who by and large would prefer to see the low-end rental market wither away. But Redbox, too, has sought ways to make itself digitally relevant. Read More »

High Court Of Canada Cooks Google’s Goose

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When you think about landmark legal rulings affecting the internet you don’t usually look to the courts of Canada. But the Supreme Court of Canada this week sent shock waves through internet legal circles by issuing an injunction against Google requiring the search engine to de-index an allegedly infringing website everywhere in the world.

The 7-2 ruling was surprising on multiple levels, not least because Google is not actually a party to the litigation that led to the injunction. More surprising still was the court’s assertion of global jurisdiction over the internet. But for Google the worst may be yet to come.

The dispute involves Equustek Solutions, a smallish Canadian technology firm that sued its former distributor, Datalink Technologies Gateway, in 2011 alleging that Datalink was relabeling some of Equustek’s products and passing them off as its own. Then, according to the suit, Datalink used confidential documents and information it had obtained from Equustek to produce and sell competing products. Read More »

VidAngel Calls Hollywood’s Bet

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The Hollywood studios have a fraught history with third-party services that re-edit their films, typically to remove the sort of content that had earned the film an R or even PG-13 rating.

Back in the 1990s, a handful of video rental store operators, mostly in conservative Utah, began manually editing purchased copies of VHS cassettes for their customers as a service, most famously with Titanic, to remove the the naughty bits. Studios and filmmakers grumbled but manual re-editing wasn’t exactly a business designed to scale so Hollywood mostly let it be.

In the 2000s, with the advent of the DVD format, some of those same entrepreneurs figured out ways to partially automate the editing process and tried to turn it into the business. In 2000, the Utah company CleanFlicks started producing cleaned up versions of DVDs created by muting the audio at key points or removing entire sections of the audio track, then offering them for sale and rental. Read More »

Have Netflix, Will Travel: EU Digital Single Market Inches Closer

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Negotiators for the European Commission, the European Parliament, and European Union member countries this week reached agreement on new rules that will allow citizens from one EU country to access digital services they subscribe to, such as Netflix, Spotify, and sports live streams, when traveling in another EU country starting in 2018.

Up to now, exclusive territorial licenses between rights owners and online services, as well as other rules, have generally prevented services from granting access to subscribers from outside their home country.

“Today’s agreement will bring concrete benefits to Europeans. People who have subscribed to their favourite series, music and sports events at home will be able to enjoy them when they travel in Europe,” EU vice-president in charge of the Digital Single Market Andrus Ansip said in a statement. Read More »

Copyright Makes Strange Bedfellows

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It’s probably fair to say that Donald Trump was not the first choice for president among the majority of those within the media and entertainment industries. Since his election last month, however, their official industry representatives have wasted little time trying to ingratiate themselves with the incoming administration and to press the industries’ policy agenda.

“So much of what you wrote in your platform this summer about intellectual property and private property rights resonated with many of us, including: ‘Intellectual property is a driving force in today’s global economy of constant innovation,'” a consortium of music industry trade associations wrote to Trump this week. “‘It is the wellspring of American economic growth and job creation. With the rise of the digital economy, it has become even more critical that we protect intellectual property rights and preserve freedom of contract rather than create regulatory barriers to creativity, growth, and innovation.’

“As partners, many in the technology and corporate community should be commended for doing their part to help value creators and their content,” the groups added. “Some have developed systems to promote a healthy market for music and deter theft. However, much more needs to be done…[T]here is a massive ‘value grab’ as some of these corporations weaken intellectual property rights for America’s creators by exploiting legal loopholes never intended for them – perversely abusing U.S. law to underpay music creators, thus harming one of America’s economic and job engines.” Read More »

Why MVPDs, Studios Won’t Take Yes For An Answer on STBs

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When Federal Communications Chairman Tom Wheeler unveiled his initial proposal to “unlock” the pay-TV set-top box back in January, pay-TV service providers and programmers howled in protest. Operators complained that the proposal, which called for multichannel video program distributors (MVPDs) to make their video feeds, channel listings, and subscriber entitlement data available to third-party device makers as discreet “information flows,” would require a major and expensive re-architecting of their systems. Programmers complained that making their content available directly to device makers with whom the programmers had no contractual arrangement amounted to a de facto compulsory copyright license, which the FCC had no authority to create or enforce.

FCC_buildingBoth threatened to sue.

The two arguments were, in fact, reinforcing. The current carriage agreements TV programmers and distributors have with pay-TV operators are premised in part on pay-TV systems operating in certain ways and not in other ways. Changing how those systems function could cause part of the premise of those licensing agreements to crumble. Read More »

Remastering Copyright

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It’s not often that a copyright owner denies owning a copyright in order to press a case for copyright infringement. But that’s essentially the position ABS Entertainment found itself in its legal fight with CBS Radio over the broadcaster’s on-air use of sound recordings made prior to 1972, when recordings came under federal copyright protection. And now a federal judge in California has ruled that ABS is stuck with the consequences of the copyright it never claimed (h/t THR, Esq.)

His_Master's_VoiceThe ruling, if it stands up on the expected appeal, is fairly dripping with implications for music and broadcasting industries (both over-the-air and digital), but also for the film and video industry that makes use of sound recordings in audiovisual works.

Pre-1972 sound recordings have been the focus of considerable controversy in recent years. Prior to 1972, sound recordings were not protected by federal copyright law; only the musical compositions embodied in those recordings were protected. But in 1971 congress updated the law to extend federal copyright protection to sound recordings made after February 15, 1972.

The law continued to exempt over-the-air broadcasters from having to pay public performance royalties to the owners of sound recordings, however (publishers and songwriters get paid), to the dismay of the record labels, on the ostensible grounds that airplay helped promote the sale of records and therefore record companies didn’t need performance royalties. (The real reasons had more to do with the power that broadcasters once wielded in Washington, DC, and in some measure still do.) Read More »

Data And The DMCA

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A group of 18 music industry organizations, representing songwriters, publishers and musicians, filed comments last week with the U.S. Copyright Office in response to the office’s congressionally ordered inquiry into the operation and effectiveness of Section 512 of the Digital Millennium Copyright Act, otherwise known as the “safe harbor” provisions of the law. And to make a long filing short: they don’t think it’s working very well at all.

As discussed in a previous post here, people in the copyright industries have been pining for years for a do-over of the safe harbors and notice-and-takedown procedures, which they claim have amounted to a get-out-of-jail-free card for online infringement, and the music groups came prepared. Their 70-page filing (including appendices) is chock full of colorful charts and graphs, footnoted legal arguments, and research findings, all purporting to demonstrate conclusively that the Section 512 bargain, which was intended to provide a limit on the liability of online technology providers for infringement by their uses while creating legal tools for copyright owners to get infringing content removed from the web, has been rendered null and void by advances in web technology and overly narrow interpretations of the law by the courts.

“Several factors have contributed to the failure of the DMCA to fulfill its purpose,” the groups said in their filing. “To start, Congress enacted the DMCA in 1998 when dial-up Internet speeds and static web sites predominated. Soon thereafter, individuals could be worldwide publishers of content on peer-to-peer networks and service providers began to distribute massive amounts of Read More »

Apple-Dubset Deal Marks A Rights-Tech Milestone

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Apple Music this week tapped rights-tech developer Dubset Media to manage clearances and royalty payments for DJ mixes and other mashups, opening the way for thousands of hours of user-generated content to be made available legally on the streaming service.

The deal, which relies on Dubset’s proprietary technology for identifying the individual tracks used in extended mixes and making payments to the appropriate rights owners, marks a milestone for electronic dance music (EDM) and other types of derivative work, such as DJ mixes and remixes, which have become hugely popular with music fans but until now have largely been kept off the major streaming services due to the difficulty and Andy_Moor_DJ_2010complexity of clearing the rights for the dozens of tracks they typically include. Instead, most EDM and DJ mixes wound up on platforms like SoundCloud , which until recently had no licensing deals in place with music labels or publishers, or on underground streaming services that are less particular about copyrights.

“Our genre has grown hand in hand with the rapid growth of streaming and digital services yet, despite billions of online plays, most of our creators and rights-holders earn very little for their efforts compared to their ‘pop’ peers,” Association of Electronic Music CEO Mark Lawrence told Music Business Worldwide in response to the Dubset announcement. “This is the first move to correct the imbalance.”

But the deal also represents a milestone in a growing effort, both in the music business and in other media industries, to bring technology to bear on complex rights-management problems to try to open up new, more efficient and transparent channels for exploiting and monetizing media content rights. Those rights-tech efforts could eventually prove as disruptive to the business of owning, using and licensing media rights as technology has already proved to the distribution side of the business. Read More »

Voices Raised Over Librarian of Congress Nominee

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The Librarian of Congress is not generally considered a controversial post within the government. There have only been 13 of them in the Library’s 216-year history, which tells you something about the urgency with which Congress has historically regarded the appointment.

The job is largely administrative, charged with overseeing the libraries vast collection and providing research assistance to Congress. But it also

Dr. Carla Hayden

Dr. Carla Hayden

has some policy-making authority, exercised most prominently in recent decades through its oversight of the U.S. Copyright Office, which is a division of the Library.

Under Section 1201 of the Digital Millennium Copyright Act the Copyright Office must conduct a triennial rulemaking proceeding to determine whether certain types of copyrighted works protected by access control technologies (“technical protection measures”), should be exempted from the DMCA’s ban on circumventing such measures in certain circumstances.

The process has, among other things, led to recognition of a right to unlock a cell phone so it can be used on another network and to circumvent DRM on DVDs for certain teaching purposes, and the right to circumvent DRM on ebooks to allow them to be used with screen readers to assist the visually impaired. Read More »

FCC Goes Searching For A New Set-Top Box

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At a press conference following the Federal Communications Commission’s 3-2 vote Thursday to launch a formal rulemaking proceeding aimed at unlocking the set-top box FCC chairman Tom Wheeler emphasized, as he has since announcing the proposal last month, that nothing in the proposed new rules alter existing licensing or content-protection agreements  between networks and pay-TV providers or disrupt existing advertising models.

Federal Communications Commission (FCC) Chairman Tom Wheeler gestures at the FCC Net Neutrality hearingOn the contrary, he said, “the rules will require that the sanctity of the content is passed through” unaltered to any new device or app used by consumers to access pay-TV content. That includes, he went on to clarify, the network’s channel position, the content recording rules and the unadorned, original ad load.

“Nobody’s going to be replacing ads, or doing any kind of split screen, with ads on one side, or putting a frame around the content and putting ads around it; none of that,” he said. “The sanctity of the content will be preserved.”

In fact, it’s not clear from his comments what, exactly, Wheeler hopes or expects anyone to be doing with the newly open standards for set-top boxes, assuming the rules ever gets that far through the likely gantlet of lawsuits and foot-dragging  (the formal Notice of Proposed Rulemaking the commissioners voted on has not yet been published by the FCC). He took pains at Thursday’s hearing to make it sound as if nothing much would change about set-top boxes at all under the new rules apart from the manufacturer’s name plate, going so far as to put up a pair of identical slides purporting to show before and after schematic drawings of how consumers would access pay-TV content. Read More »

Fighting Piracy in Real Time

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Ever since Meerkat and Periscope popped up on the scene, live event producers and rights owners have worried about the potential for piracy from mobile live-streaming apps. In fact, Periscope more or less made its bones, with the public at least,  during the Floyd Mayweather/Manny Pacquaio title fight last year, when the Twitter-owned app led to so much re-broadcasting of the HBO and Showtime feeds of the bout that then-Twitter CEO Dick Costolo, rather indiscreetly, declared Periscope the real “winner” of the night.

Since then, the threat has only grown greater as live-streaming apps have proliferated.

iphone_TV“We saw a lot of new live-streaming apps at CES that are just around the corner,” Clint Cox, VP of technical operations at the Ultimate Fighting Championship said at the Copyright & Technology conference sponsored by GiantSteps Media and the Copyright Society in New York this week. “It’s fairly common technology and it’s becoming a unique challenge for rights owners. It’s a very easy place to put infringing content quickly.”

The problem is doubly complicated by the fact that not all unauthorized streaming of live events is clearly infringing from a copyright perspective, particularly when it comes to live sports. While a licensed broadcaster’s pictures, descriptions and accounts of a sporting event are clearly copyrighted, the game itself — the action on the field, court, ice or ring, as it unfolds in real-time — is not.

Someone sitting in the stands pointing a Periscope-enabled smartphone at the field, therefore, may be violating the venue’s terms and conditions printed on the back of the ticket, but they may not be infringing anyone’s copyright. Read More »

Fahrenheit 512

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The Friday night document dump is a tried and true tactic used by businesses as well as government officials looking to avoid a conflagration over the content of the documents. Waiting until a Friday that happens to fall on New Year’s Eve, however, has a panache all its own.

That’s when the U.S. Copyright Office dropped a Notice of Inquiry (NOI) into the Federal Register seeking comments on whether section 512 of the Digital Millennium Copyright Act, dealing with the procedures for notice and takedown of infringing material, is working effectively and as Congress intended when it passed the law back in 1996. But if the Copyright Office was hoping that few would notice the NOI, or that it might be able to keep the comments down to a dull roar it will almost surely be disappointed.

Library-of-Congress-Reading-RoomNo one who actually has to follow or apply the Section 512 procedures thinks they’re working well or effectively. Google alone was processing nearly 20 million takedown requests per week at the end 2015, while copyright owners see the system as a hopeless game of Whac-a-Mole, in which files get removed only to reappear quickly under a different URL. Litigation between copyright owners and online service providers — over the scope of the Section 512 safe harbor, which shields service providers from liability for infringing content posted by users if they follow the proscribed takedown procedures, the legal standard for culpable knowledge of infringing activity, and the efficacy of enforcement against repeat infringers — has formed a near-constant backdrop to the law almost since it took effect in 1998, most epically in the seven-year legal battle between Viacom and Google over content posted to YouTube. Many have been waiting years to get a crack at rewriting the safe harbor rules and they’re not likely to let the opportunity pass. Read More »

How The CRB Has Done The Music Industry A Favor (Updated)

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With the possible exception of Taylor Swift, Janet Yellen may now be the most powerful person in the music business. As chair of the Federal Reserve, Yellen controls the levers that control the rate of consumer inflation in the U.S., a number on which potentially millions of dollars in music royalty revenues will now turn in the wake of Wednesday’s ruling by the Copyright Royalty Board (CRB) setting the royalty rates that internet radio services like Pandora and iHeartMedia must pay to record labels and artists for the next five years.

Under the new rate card, internet radio services will pay 17 cents per 100 streams in 2016 ($0.0017 per stream), up nearly 20 percent from the 14 yellencents per 100 streams they pay today but well below the 25 cents per 100 that SoundExchange, which collects digital royalties for artists, had sought. After that, the rate will be indexed to the Consumer Price Index (CPI), the main gauge the government users to track inflation, for the next four years, which means the rate could go up or down with the price of bread.

It was an unexpected and deeply peculiar move that looked like nothing so much as an effort by the CRB, an arm of the Library of Congress, to get out of the rate-setting business, which itself would be mighty peculiar insofar as its role in setting royalty rates for webcasters is mandated by Congress and not really optional on CRB’s part. Read More »