The Netflix Law

Netflix, an American online streaming company, is launching ambitiously in many member states of the European Union. In Sweden, despite our domestic streaming industry also being quite ambitious, Netflix is the only online streaming company to have successfully entered into news media celebrating their one year anniversary of activities.

Netflix and online streaming present interesting challenges to the legislator, because their activities are not based on copyrights but broadcasting rights, that is - the right to control or have a monopoly on copyrighted works that someone makes accessible to the public through transmission. Broadcasting rights, therefore, do not cover the piece of art itself, but the transmission of the film, music or whatever the piece of art it might be. Sort of like giving a logistics company or a trucker a specific right protecting them while they ship a painting from one location to the other.

Broadcasting rights are regulated in the European Union and in Sweden in different ways. Satellite broadcasting and cable broadcasting is covered by a directive from 1993. Television without Frontiers and the Audio-Visual Media Services Directive (AVMSD) similarly regulate television content and one-to-many transmission of audio-visual content (thereby excluding for instance radio, which clearly is not audio-visual).

So for both Netflix and the legislator the question will be: does the technical and legal infrastructure of society support adequately the type of monetization that Netflix envisages for itself? And the answer is "no, no it doesn't". This is why in the World Wide Web Consortium (W3C) Netflix and Google have been working very hard to get a digital rights management (DRM) scheme (encrypted media extension) into the HTML5 standard. The argument in favour goes that it's double-plus ungood to have a large diversity of DRM plug-ins for browsers on a technical level. It gets technically messy for browser vendors with plug-ins with ensuing confusion for users and online broadcasters. The argument against would go that actually we haven't politically decided how we want to deal with this area of law yet.

It turns out that for instance the Swedish implementation of AVMSD doesn't prohibit non-commercially motivated decryption of a received broadcast. You are perfectly, as a consumer, within your right to decrypt something that you have received in a broadcast. The Swedish government is considering changing the law to make it possible for Netflix to impose the business model they envisage. The proposal is still in its infancy but could easily be seen as a function of the persistent and deliberate media strategy of Netflix in Sweden over the last year: they are reaching by far the most media news reports than any other "innovative" business model for streaming.

The W3C DRM scheme for browsers is more tricky: this is essentially a technically motivated process that imposes a legal scheme upon which there is no agreement in the Union. Further, in the Union you would run into potential commercial use complications: in order to promote cross-border access to services, the European Union broadcasting rights are made in such a way that a right to receive a broadcast purchased in one state can be used to receive the same broadcast in a different member state regardless of the terms of licensing for the original copyrighted work subject to the broadcast. The question therefore is how the Netflix technical and legal ambitions conflict with present European law and how fast they, together with Google, can lobby legislators in the member states to change the legislation to fit with their ambitions and intended business models.

On the plus-side, both Netflix and Google are American companies and will therefore suffer some complications in member states that are disinclined to follow foreign industrial interests. That will be good for end-users in Europe, who will see their rights curtailed at a slower pace than will otherwise be the case.

On the down-side, Netflix and Google enjoy a position of considerable influence in the technical standardisation organisations that control the interface for the internet for the absolute majority of all the world's internet users (the browser) and may therefore be able to consolidate a behavioural and legal norm in the technical architecture without the consent of the legislator.

We've been doing work on this in Brussels in both the Parliament and in the European Commission since this spring and will of course continue to do. It bears raising these topics with our legislators (that is, the ones who are not me) and with technical organisations that are not, in this case, Google or Netflix. It would be interesting to know if any similar proposals to the Swedish proposal is being raised in other member states, and especially how they compare to relative Netflix media coverage in the last two years.

Netflix in Swedish media DN criticizing pirates, on popular tv-series, using subtitles, launching their service, potentially winning an Emmyactually winning an Emmy, taking films off of their service. Netflix in Swedish media SvD: being victorious, promoting web-TV, going for pirates, reaching an all-time-high, escaping Microsoft (for Google's EME, on assumes), competing with traditional TV broadcasts.

Coverage of Video-On-Demand that is not Netflix: 10 top VOD-services (DN).

2 kommentarer

There is no need for DRM to begin with, so why do they want it? Broadcasters have survived without the ability to control what viewers have done with the recieved signal, for decades!

To be able to see what is beeing sent encrypted from the server, your equipment has to both recieve and decrypt it. The DRM-part is there to stop you from saving it. This is basically just the old Betamax-case all over again, they want a law that effectively makes it illegal to not throw away information that was given to you. The only time i have encountered this before, has been about military orders where it has been mandatory to destroy the information after it has been read by the reciever. So, they want a law that force people to treat publicized entertainment as military secrets. This is sick.

Hey, I'm trying to work against this. Luckily I have another opportunity on Wednesday morning at 08:00. Yay.

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