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Netflix & Libraries

Beware: Rambling DVD/streaming media post below.

Well, we finally got Netflix in Canada this week. And for a change it`s better than the U.S. version since we have a streaming only option but interestingly no delivery option. I think Netflix is using Canada as a testbed for future U.S. market strategies and, at the same time, avoiding tax, border or local logisitics issues.

Netflix has been one of those models that library folk often refer to when looking for best practices for borowing models that match libraries. I hope we look at how Netflix is evolving too. I think that it is pretty clear that it is moving to a streaming only business model and that will eventually make the CD delivery option a very small part of their business or even non-existent.

Gary Price and I have been chatting about this online and we see this as both a huge opportunity and huge threat to public library circulation. Gary found the following estimate from Barclays (via the Silicon Alley Insider) very interesting: a Netflix user could stream about 16 two-hour movies for the same delivery cost to Netflix as one DVD… and that Netflix is considering a plan (U.S.) for customers who want a streaming-only option.

In my neighbourhood we used to have a huge number of video rental stores. The Blockbuster left a few years ago and the others just disappeared overnight. We have three library branches within waking distance with DVD collections and one good video store left that has a nice collection including the classics and the major TV series. I know that two of our corner stores sell blackmarket DVD`s under the counter. And, of course, I have the ability to download from iTunes (some relatives mock me for paying instead of `torrenting’) and we could get a free set-top box from our cable company. So, for the near future we have some options. Sadly, while I still have my DVD’s easily accessible at home, I moved my VHS tape collection down storage this summer with the vinyl and cassettes. Will I never learn?

Another interesting develoment is the recent use of Netflix in the US by some libraries to serve customers directly. This is an amazing thing since it is against the law, license, terms of use and just about any ethical standard. It’s even attracting the attention of various non-library media which in itself a shocker. Indeed, some librarians are even writing articles about how to do this in Library Trends or blogging about it. As ALA argues strongly for balance in copyright law and ethical behaviours, we have some pretty amazing violations of a balanced standard. Read more here:

Librarians Gone Wild: Violating Netflix Terms of Use!
by David Zax
Mon Sep 20, 2010
“Netflix isn’t going to sue, but it wants you to know it’s very, very disappointed.”

You can find a bunch of comments on this by doing simple searches on Google. Some take comfort in this quote:

“Turns out Netflix isn’t actually cool with libraries using the service and doesn’t want early adopting librarians to be encouraging others to do so. Netflix doesn’t offer institutional subscriptions and expects its services to be limited to personal consumption. “We just don’t want to be pursuing libraries,” Netflix’s vice president of corporate communications Steve Swasey told the Chronicle of Higher Education recently. “We appreciate libraries and we value them, but we expect that they follow the terms of agreement,” he said, adding that Netflix “frowns upon” the liberties taken by librarians.”

I think the real issue is:

1. Netflix has bigger fish to fry right now as it develops wider streaming capability and enters new national markets lke Canada. These lawsuits take a lot of time, money and management attention.
2. Maybe some day they will acquire the rights to license to insititutions but they may not have those rights today. Perhaps the only have retail, consumer market rights for individuals? I don’t know for sure but it’s unlikely thay have unlimited rights for all content to do with the content as they see fit.
3. To be clear, Netflix doesn’t actually own these movies. It licenses them and they are owned by a wildy diverse and complex group of studios, authors, musicians, writers, directors, and more in a layered rights stratification that boggles the mind.
4. Netflix may not want to sue for uses based on content it does not own since any fines or judgment would probably go to the content owner and not so much to them. The winners will be law firms.
5. I’d worry more as a library that the content owners will test the borrowing in libraries and sue. Many cases I am a familiar with either downloaded, copied or borrowed a piece of content to create a proof. My memory may be failing me but wasn’t the famous Texaco copyright decision with a fine of something like $8 million based on less than a dozen articles? Weren’t the huge Tasini decision fines based more on the rights of the original owners and the writers and weren’t there more players than just the distributors?

Libraries probably needn’t fear Netflix. There are richer and more litigious folks out there with bigger economic interests in this development. Before embarking on using someone elses’ content against normal practice or license, I’d sure make sure my butt was covered by the institutional lawyer seven ways to Sunday.

I suggest you read this rationl post: Netflix in libraries and hypocrisy by Meredith Farkas. The comments are very interesting and run the gamut from support to those who indicate that some library licensors believe that Netflix is the copyright owner vs aggregator here, that Netflix can give legal rights permissions by not replying to a letter with little or no follow up, and that Netflix can easily ‘assume’ that libraries will circulate the material (as opposed to hundreds of other valid uses)! We have some work to do still on library licensing skills!

Anyway, I think we’re seeing a big push to more rapid change in the DVD and streaming media collections space. If some libraries take the positions that it is OK to violate copyrights and lcensing terms it makes it difficult for all of us to represent library needs to legislators, creators, and owners as trustworthy users and user representatives.


Posted on: September 25, 2010, 11:56 am Category: Uncategorized