Copyright Chilling Effects

By Eric Crampton 30/09/2013

It seems that the lawyers at Sky didn’t like my post on Netflix. They’ve not been in touch with me about it, nor did they get in touch with the folks at SciBlogs about it when I syndicated it there.

But late last week, the National Business Review asked if they could run it as part of their Weekend Edition. I agreed, as I always do. Shortly after it went up at NBR, I received an email from NBR’s Head of Digital saying that they’d had to pull the piece after a legal threat from Sky TV. Sky’s lawyer wanted excised from the article the instructions on how to access Netflix from New Zealand. In my piece, I linked to an Australian website providing instructions on how to access Netflix. I also included a postscript noting that Hola seemed to work very well.

At Offsetting and at SciBlogs, that postscript reads:

* Wanting to verify that circumventing geoblocking was easy, I installed Hola. My Chrome install at work is a bit buggy; I have to manually unpack and install extensions. Nevertheless, in about 2 minutes I was into Netflix as though I were American. And now I see that they’re only charging $8 per month. I suppose I’ll have to install this on the machine at home and sign up.

At NBR, it now reads, with edits by NBR:

* Wanting to verify that circumventing geoblocking was easy, I installed a a free piece of software that allows you to use Netflix as though you are an American. It was a little buggy, but I was up and running in a couple of minutes.

I’ll note that Hola wasn’t at all buggy. My Chrome install at work is a bit buggy and gets mad whenever I try to install any extension. Anyway, my mentioning Hola seemed to have Sky’s lawyers heated up. Aloha, Sky! And Hola! And Unblock-us.

On what basis could Sky try issuing that kind of take-down request?

First, note that New Zealand generally allows “parallel importation”. The New Zealand Government, in general, does not think that it is its job to enforce whatever exclusive dealing arrangements that some overseas manufacturer wants to enter into with a domestic distributor. There is a minor exemption on DVDs and films where you cannot import films for commercial distribution for a period of five months from the date that the film is first made available to the public. This lets the theatres get a run where international windowing delays release here relative to the US. However, the ban specifically allows import of legitimate copies for personal non-commercial use. It would be reasonable to read accessing Netflix for personal use as falling into this category, though note that I am not a lawyer. I discussed the temporary ban here.

Second, the 2008 Copyright (New Technologies) Amendment Act bars the publication of information enabling or assisting another person to circumvent a technological protection measure if the person intends that the information will be used to infringe copyright in a work protected by a technological protection measure. I intended my discussion only as a part of a cursory academic discussion of why Netflix might not wish to move officially into the NZ market rather than to help people infringe copyright: if using Hola or Unblock-Us is really easy, then my story could make sense. If using such measures were really complicated, then maybe not.

But that’s all beside the point because, well, this:

226 Definitions of TPM terms.

b. for the avoidance of doubt, [TPM or technological protection measure] does not include a process, treatment, mechanism, device, or system to the extent that, in the normal course of operation, it only controls any access to a work for non-infringing purposes (for example, it does not include a process, treatment, mechanism, device, or system to the extent that it controls geographic market segmentation by preventing the playback in New Zealand of a non-infringing copy of a work) [emphasis added]

So if I put up a blog post telling people how to crack copy-protected video games, rather than just allowing playback of geocoded game discs, I could be in trouble. And I wouldn’t do that, and not just because I wouldn’t have the faintest clue of how to do it.

But, by my read of 226b, the variety of mechanisms described at this Australian site simply work to circumvent a system controlling geographic market segmentation by preventing playback in New Zealand of a non-infringing copy of a work. Netflix’s catalogue of films and TV shows in the US is non-infringing in exactly the same way that a DVD on sale in the US is non-infringing. And buying a DVD there, bringing it here, and watching it on a region-free DVD player should be as protected as subscribing to Netflix via something like Hola or Unblock-us. Maybe it violates the Netflix terms of service in the US, and Netflix could be justified in cancelling somebody’s account if they deemed such use to be in violation of their Terms of Service. I expect that bringing a Region 1 DVD here and watching it on a region-free player might violate the DVD’s Terms of Service as well. But a take-down notice based simply on the use of the word Hola or a simple description stating that installing Hola was really easy? Again, I’m not a lawyer; hopefully I won’t have to consult one. I’ll rattle a tip-jar if I do and if it winds up being at all pricey.

I’d be a bit surprised if it were illegal though. Here are other NZ-based sites explaining precisely how to access Netflix from New Zealand.

So, why might Sky have written a threatening letter to the National Business Review? If everybody in New Zealand subscribed to Netflix, the only reason left for subscribing to Sky could well be for sport. If folks can get faster and more convenient access to content via Netflix for USD$8 per month rather than from Sky for NZD$46.92 per month, why would anybody bother with Sky? If the main thing stopping people from making the switch is fear that the process is complicated, shouting Hola! might seem threatening.

I am so very glad that I have never given a dime to Sky. Freeview plus YouTube plus buying DVD sets from abroad gives me much better value for money.

Update: I have deleted one comment from my prior post on Netflix. The commenter had suggested other ways of getting Netflix in New Zealand but, on reading this post, requested that his comment be deleted. Chilling effects….

0 Responses to “Copyright Chilling Effects”

  • It’s not just Netflix – add HuluPlus, US AppleTV/iTunes, and all the US tv stations.

    All up, around $30/month.

    Who needs Sky.

  • ” I’ll rattle a tip-jar if I do and if it winds up being at all pricey.”

    What? You’re asking for a subsidy to assist your defence if the price is too much?

    Hmm…Obviously not enough lawyers around to lower the price!!

    Next you’ll be wanting a defence tax!


  • In regards to “So, why might Sky have written a threatening letter to the National Business Review?”

    My 2 cents would be that Sky may be concerned due to their ownership of Fatso which they’ve dropped hints at various points in the past regarding doing a Quickflix/Netflix digital distribution model as part of their DVD rental services.

    Of course, based on the current selection of ‘for NZ’ services (Quickflix and iSky), it’s obvious that Netflix currently win hands down (and likely will beat anything that Sky/Fatso can put out).

  • Quickflix have a very good technology platform and HBO is a shareholder and they can’t get the content mix to take on Sky. Netflix will be no different. The regional nature of content rights mean Sky and the free to air broadcasters get first bite and that will be very difficult to change.

  • Peter Griffin, thanks. To make sure I have it right, Sky and the free to air broadcasters have first dibs at any content distributed/controlled by US companies, and if Sky & FTAs decide to distribute an item in New Zealand they gain exclusive rights to distribute. So, when that happens Netflix and others based in the US can’t show that same work anywhere that competes with Sky, and in New Zealand if it competes with the FTAs?

  • @Jim — what Eric said. Netflix could conceivably try and outbid Sky for the right to show content online first at the same time it debuts in the US. But it realistically would not be able to outbid Sky which has strong relationships with the US TV and film studios who get several bites of the pie – once when they sell broadcast rights and again when they sell SVOD rights, Blu-ray and DVD etc.

  • Peter, true in theory, but Netflix’s business model rarely involves competing for first run content anyway, so it;s extremely unlikely they would want to do that in NZ even if they did come here.

    Whilst they do produce some stuff of their own, which is shown first on Netflix (like House of cards), none of the other content they have is ‘first run’ in the states. (i.e. Netflix USA does not have season finale of breaking bad, does not have latest season of Mad Men, has only just put up season 3 of walking dead which was broadcast a year ago, and has precisely ZERO HBO content)

    So to think that Netflix don’t come here because Sky/TVNZ etc have first run rights locked up is simply untrue.

    My theory on why Netflix hasn’t come here is simply that they haven’t yet gotten round to it. We are a low income country, in the middle of nowhere, we still have data caps, and most people’s wiring is so bad that their broadband isn’t great, despite a great last mile infrastriuctur.
    In other words, we simply don’t rate a high priority for them. They will come here eventually no doubt, but likely not for a couple of years at least.

  • @billy I didn’t say Netflix compete for first run content from the big TV studios in the US. I said they conceivably could here which is a different rights region. After all, that’s the only way they’ll ever be able to compete with Sky which gets first bite thanks to the deals they’ve sewn up. Yes, scale is an issue as well as the state of broadband. But as Coliseum has shown with the European Premiere League, the biggest factor is having the content rights and they outbid Sky for those this time.