Aereo and the Disruption of Public Broadcasting

Aereo Logo

Startup and tech buffs love disruption, and for good reason too. Technology has intervened, over the course of human development, to change existing business models and sometimes make them obsolete. Usually, after some initial resistance, the market follows the disruption and old businesses either [try to] adapt, like Blockbuster or close shop and move on, like Kodak Film.

 

The US Supreme Court is about to rule on the legality of the attempt of a company named Aereo to disrupt conventional free-to-air television broadcasts. Aereo offers its users a service through which they can watch live TV online for a monthly subscription of $8-$12. The TV broadcasters, whose content Aereo offers, are upset because Aereo has not obtained licenses to rebroadcast their content and they are convinced that this is clear piracy. Their sentiment is underscored by the existing lucrative situation, where cable and satellite companies pay huge sums to TV broadcasters to retransmit/rebroadcast popular shows. This is where the impact of the disruption will be felt, should the Supreme Court rule Aereo’s business to be legal.

 

Aereo's Antennas. Photo Credit: Washington Post

Aereo’s Antennas. Photo Credit: Washington Post

The case turns on whether or not Aereo’s transmissions to subscribers are “public performances” or “private performances” of the TV broadcasts. If we revisit our Copyright 101 notes, we will remember that broadcasts are eligible for copyright protection and one of the implications of this is that the copyright holder has the exclusive right to control how they are transmitted/communicated to the public. What is the difference between public and private performances? Well, there isn’t a rigid distinction, but generally, private performances fall within the realm of family, home viewing, of a non-commercial nature. Anything outside that would probably be a public performance.

 

There is also a judicial precedent (i.e. a previous decision of the Court of Appeals) which will come into focus during the presentation of arguments at the Supreme Court; the Cablevision case. “Cablevision involved a cable company that held licenses to transmit live copyrighted programs, but also sought to offer subscribers an unlicensed service known as a “Remote Storage Digital Video Recorder” (RS-DVR).” [Quote is from the US Solicitor-General’s amicus brief (opposing Aereo) to the Supreme Court, in the Aereo matter. Full brief can be found here.]

Aereo AntennaAereo2

The RS-DVR allowed subscribers to record programs for later viewing, with the recordings stored in central servers housed and maintained by Cablevision. The courts ruled that the RS-DVR transmissions were private, rather than public performances, for various reasons, including that the transmission from the RS-DVR could only be received by one subscriber.

 

That factor, the capability of reception by a sole subscriber, is central to Aereo’s business model and legal arguments. The US Solicitor-General in fact suggested in his brief that Aereo engineered its business model around the Cablevision decision. So how does Aereo work?

 

Aereo has a central hub of “thousands of dime-sized antennas that are rented to individual users.” [See more in article from Time here.] The antennas capture live free-to-air TV signals, with each antenna serving no more than one subscriber at a time, depending on what program the subscriber chooses to watch. Aereo believes that a ruling that its business is piracy would have serious implications for cloud computing and would throw the Cablevision precedent out of the window. The District and appeal courts have agreed with Aereo so far. However, one of the judges at the Court of Appeals dissented.

 

According to the judge, Judge Denny Chin, in his dissenting opinion, [full judgement available here) Aereo’s technology platform is “a sham”. He says the system has been “over-engineered in an attempt to avoid the reach of the Copyright Act and take advantage of a perceived loophole in the law.” To my mind, he provides a great example of how the system is a sham. In spite of Aereo’s seemingly innocuous position that it provides users with a technology platform to make and access unique private recordings, Aereo’s antennas broadcast the Superbowl live (and simultaneously) to 50,000 users. It would indeed be curious for this not to be held to be public broadcasting.

 

The Judge goes further to distinguish Aereo’s case from Cablevision, with the key point that Cablevision involved a company that already paid license fees, while Aereo pays none. The subscribers in Cablevision already had the ability to view the recorded transmissions; Aereo’s do not. Aereo is functionally a cable company, doing what cable companies typically do, except for its attempt to avoid getting licenses to rebroadcast programming.

 

However, many legal scholars support Aereo, according to the previously referenced TIME piece. One such scholar is quoted as saying “Aereo simply provides an antennas for viewers to privately transmit free over-the-air broadcast television signals. It does nothing more than make it easier for viewers to access already free broadcast service.” But, I would counter, this (i.e. that the broadcasts are free-to-air) is irrelevant to the underlying intellectual property rights and what non-copyright holders have the power to do.

 

I am not an American qualified lawyer but I believe that Aereo’s business should be held illegal. It is clear that their thousands of dime-sized antennas, rather than a single large receiver, is a less-efficient way to structure the business. And, while taking advantages of loopholes in laws is legal and loopholes are in fact the bread and butter of many wealthy lawyers around the world, I agree with Judge Chin that there are enough differences between Aereo and Cablevision to hold that Cablevision does not apply here.

 

We watch and observe.

 

A Summary of the Nigerian Law of Copyright

 

This piece summarises the Nigerian Law of Copyright, with a particular focus on literary and musical works.

 

According to the Copyright Act of Nigeria, the following shall be eligible for copyright-

(a) literary works; (which includes, irrespective of literary quality, novels, stories and poetical works; plays, stage directions, film scenarios and broadcasting scripts; choreographic works, computer programmes; text-books, treatises, histories, biographies, essays and articles; letters, reports and memoranda; lectures addresses and sermons; and other similar works)

(b) musical works; (which means means any composition, irrespective of musical quality and includes works composed for musical accompaniment.)

(c) artistic works;

(d) cinematograph works;

(e) sound recording; (which means the first fixation of a sequence of sound capable of being perceived aurally and of being reproduced, but does not include a soundtrack associated with a cinematographic film.)

(f) broadcasts.

A literary, musical, or artistic work shall not be eligible for copyright unless-

(a) sufficient effort has been expended on making the work to give it an original character;

(b) the work has been fixed in any definite medium of expression now known or later to be developed, from which it can be perceived, reproduced or otherwise communicated either directly or with the aid of any machine or device (e.g. on paper, stone, on a computer hard-drive, on a blog-hosting server).

 

Copyright in a work shall be exclusive right to control the doing in Nigeria of any of the following acts (for literary or musical works):

(i) reproduce the work any material form;

(ii) publish the work;

(iii) perform the work in public;

(iv) produce, reproduce, perform or publish any translation of the work;

(v) make any cinematograph film or a record in respect of the work;

(vi) distribute to the public, for commercial purposes, copies of the work, by way of rental, lease, hire, loan or similar arrangement;

(vii) broadcast or communicate the work to the public by a loud speaker or any other similar device;

(viii) make an adaptation of the work;

(ix) do in relation to a translation or an adaptation of the work, any of the acts specified in relation to the work in sub-paragraphs (I) to (vii) of this paragraph;

 

Copyright in a sound recording shall be exclusive right to control in Nigeria-

(a) the direct or indirect reproduction, broadcasting or communication to the public of the whole or a substantial part of the recording either in its original form or in any form recognisably derived from the original;

(b) the distribution to the public for commercial purposes of copies of the work by way of rental, lease, hire, loan or similar arrangement.

 

WHO OWNS THE COPYRIGHT?

  1. Usually, the author or composer of the work;
  2. If Person X commissions Person Y to author the work (Y not being X’s employee or apprentice), or if Y makes it in the course of his employment, copyright belongs to Y, unless the contract between X and Y states otherwise.
  3. If the work is made in the course of employment in an organisation that issues newspapers, magazines or other periodicals, copyright belongs to the company, unless contract says otherwise.

 

WHO IS THE AUTHOR OF A MUSICAL WORK?

Musical Work usually comprises the Musical Composition and Sound Recording.

Musical Composition consists of the music as written, as well as any accompanying words (lyrics). The sound recording, on the other hand, results from the fixation of a series of musical, spoken, or other sounds into a tangible medium that can be played back.

The author of the composition is the writer and/or the lyricist. Author of the sound recording is the composer(s) or the sound engineer, or both. However, it’s possible for the contract between the composer and the sound engineer to state who owns the copyright.

WHAT IS COPYRIGHT INFRINGMENT?

Copyright is infringed by any person who without the licence or authorisation of the owner of the copyright-

(a) does, or cause any other person to do an act, the doing of which is controlled by copyright;

(b) imports into Nigeria, otherwise than for his private or domestic use, any article in respect of which copyright is infringed under paragraph (a) of this subsection;

(c) exhibits in public any article in respect of which copyright is infringed under paragraph (a) of this subsection;

(d) distributes by way of trade, offer for sale, hire or otherwise or for any purpose prejudicial to the owner of the copyright, any article in respect of which copyright is infringed under paragraph (a)of this subsection;

(e) makes or has in his possession, plates, master tapes, machines, equipment or contrivances used for the purpose of making infringed copies of the work;

(f) permits a place of public entertainment or of business to be used for a performance in the public of the work, where the performance constitutes an infringed of the copyright in the work, unless the person permitting the place to be used is not aware, and had no reasonable ground for suspecting that the performance would be an infringement of the copyright;

(g) performs or cause to be performed for the purposes of trade or business or as supporting facility to a trade or business or as supporting facility to a trade or business, any work in which copyright subsists.

 

JUDICIAL RELIEF/REMEDIES FOR INFRINGEMENT

  1. Damages – money, punitvely
  2. Injunction – an order of the court
  3. Account – hand over all the income from unlicensed sales/reproduction
  4. Others (as court deems fit).

 

DURATION OF COPYRIGHT

Type of Work Author Date of Expiration of Copyright
Literary, musical or artistic works other than photographs Known Human Author 70 years after the end of the year in which the author dies.
Known Joint Authors 70 years after the end of the year in which the author dies; ‘death of the author’ taken to refer to the author who last dies.
Anonymous or Pseudonymous Author 70 years after the end of the year in which the work was first published.
Government or Body Corporate 70 years after the end of the year in which the work was first published.
Cinematographic Films & Photographs 50 years after the end of the year in which the work was first published.
Sound recordings 50 years after the end of the year in which the recording was first published.
Broadcasts 50 years after the end of the year in which the broadcast first took place.