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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

3 Responses

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  1. Erik Sandall said

    Excellent post.

    I think libraries do need to be concerned about Netflix, but not as far as litigation is concerned. As you pointed out, Netflix has had a disastrous effect on the DVD sales and rental business. And we shouldn’t forget the impact digital music had on music stores like Tower Records. E-books are next…

    2011 is touted to be the Year of the Tablet. Mobile computing and digital/streaming media is going mainstream. Libraries should already have a plan in place to meet this trend.

    It gets tricky when we consider that there will always be a significant portion of our user community who are uninterested or unable to go mobile/digital. While libraries must do what they can to meet new user needs in order to remain relevant, they must also be careful not to contribute to the negative effects of being on the “wrong” side of the digital divide.

  2. Erik: Yes – serving the technologically disadvantaged is a vitally important part of libraries’ mandate. We need to be aware that the simple collection resource ‘ownership’ function will shrink for public libraries but these libraries have much more important things that we do that add value to the community. If we keep the physical book and DVD as our primary positioning in the minds of users then we’re in bad shape. We offer programs, help people do their lives better, support learning, homework and certification, and improve the quality of questions and so much more. We need to get better at staking out a position there and not be just about plain search and collections. Just provide access and support the user’s real goals not the simple answer and object transaction – transformational librarianship. If we don’t keep our broad program portfolio role we can be replaced. I am especially worried that devices will soon be provided for free and tied to streaming subscriptions and ebook subscriptions (much like phones are tied to communication plans). Then, why use the library uness they offer greater added value to the experience?

  3. Stephen and Erik: I am very happy that we’re all thinking about those who don’t have access for whatever reason(s). As you saw in our ResourceShelf post we spent to paragraphs about making sure resources are in place for those who for whatever reason don’t have access.

    Stephen is right, if info pros don’t provide added value to users, we’re in “bad shape.”

    While this should have done simultaneously* as electronic resources, Internet, super bookstores became available to the masses. Change how people view us before or at the same time the changes were/are taking place. However, I believe it’s not too late to change things.

    Examples: The concept of the library being more than books, dvd’s, etc. Letting users know that some/many? library services are accessible to them 24x7x365. Most importantly letting the masses know that the a libraries most valuable asset is the professionals and staff who work for the library.

    I have always envisioned librarianship in the public library world becoming more special library like. That is, providing a more personalized experience for users who WANT one.

    YES, this is easier said than done but striving to get it done will also provide rewards. Modify when and where needed.

    Stephen talks about using Netflix as a “best practices” resource. Good point. We should also be looking for companies that provide exemplary and personalized services.

    Two companies that comes to mind (in the U.S.) are Southwest Airlines and Nordstrom.

    In the case of Nordstrom, they have a long history of providing personalized services.

    For example, a salesperson works with the customer and can move from department to department with them. They send email or call to announce upcoming sales and if they don’t have the answer, they work to get one. They become the central point of contact for the customer.

    In one sentence, each salesperson works to “know” their clients.

    This is similar to the level of service that MANY stores and organizations used to provide. Banking is one example. You knew your banker and your banker knew your needs and could anticipate how they could help YOU.

    Why can’t we attempt and try do something similar?


    1. Learn and anticipate a users info needs now and what they might be in the future (in general terms).

    Btw, “users info needs” can be anything. From assisting in the answer a specific question; teaching research and info lit skills; suggesting a library program; alerting users to new services; and listening to what the user wants. A more personalized relationship will also provide the library with useful data.

    2. Sell yourself, your skills and abilities

    3. Sell your colleagues skills and abilities

    4. Sell your services (24 hours reference help, remotely accessible databases, the meeting rooms, etc.)

    and on and on.

    Stephen writes:

    “If we don’t keep our broad program portfolio role we can be replaced”

    We now have, for lack of a better word, competition. This was not always the case.

    However, we have MANY things that make us different. Let’s use them to our advantage. Two of them are:

    1. OUR SKILLS both individually and as a group

    2. Many/Most of what we provide is free to the end user.
    One positive contact will bring many more. Friends tell each other about great experiences (movies, restaurants, an above and beyond the call of duty flight attendant, etc 

    While Facebook, Twitter, etc. are very useful, we need to be even more social and make our physical presence known. Once that’s done, social media can be even more valuable.

    If we don’t tell and sell users about the “broad program portfolio” we offer in our libraries, via our libraries, and most importantly the skills and abilities that an we, info pros can provide the user with, who will?

    One more time. This is all easier said than done but to quote Stephen, “If we keep the physical book and DVD as our primary positioning in the minds of users then we’re in bad shape.”

    With the explosion of info available (in all formats) I think providing a more personalized experience for users who want one is not only something that many users might like but also something they would want (if they know it’s available) and probably need.