Why do airlines license content from content providers? Why don’t they just drop by the video store and pick up a bunch of Blu-ray discs or DVDs? Or why not just download movies digitally to the file server, or stream Netflix on board?
In the first of a series of articles designed to introduce readers from outside the inflight entertainment space to this industry, we observed that first and foremost, IFE is a nontheatrical public performance market.
Theatrical rights cover, very literally, exhibition in theatres – a very public form of exhibition. Television rights cover viewing in the home by a specific audience – a rather private form of exhibition. In between the theatre and the home, we said, nontheatrical public performances emerged; this is a form of exhibition that does not take place in theatres, but does take place in public, including hotels, airplanes, ships, ferries, trains, busses, auditoriums, classrooms, libraries, cars, work camps, etc.
For many years, nontheatrical public performances were protected by technology – the smallest and most portable form by which movies could be exhibited in most of these early communal venues was on 16mm film using a 16mm projector and requiring a projectionist. Among other barriers, most audience members didn’t have access to 16mm film prints. The prints were owned by those with distribution rights, not by members of the audience or the general public, and access to the reversal internegatives from which 16mm prints were struck was strictly controlled.
With reversal internegative costs to create source materials for 16mm running over USD 25,000, and with 16mm prints themselves costing several hundred US dollars even in quantity, cost contained use. In IFE, larger airlines used new movies first, and smaller airlines reused these 16mm prints later in the cycle, in order to share costs.
But – as we would see with increasing frequency – technology changed all of that. In the 1970s, videotape emerged and with it a market for content exhibition whose rules were different than any other.
TIMES CHANGE
The most significant change brought about by home video was that – for the first time – the consumers of content would actually own the medium by which the content was conveyed. In theatres, patrons buy tickets to view movies and the prints are owned by the distributor. In television, either advertisers cover the exhibition fees and consumers watch it for free, or the viewer pays a subscription or VOD (video on demand) fee, but TV viewers never own the source of the image. But in the home video market that emerged in the 1970s, consumers would actually buy a videotape and own it.
While copyright laws vary on this subject from country to country, the copyright laws with primacy over IFE and Hollywood movies are the copyright laws of the United States, which – prior to 1976 – were not written to adequately limit the rights conveyed by ownership of the underlying distribution media under what is called the “first sale doctrine”.
While volumes could be written on the nuances of the “first sale doctrine”, an overly-simplified definition might be that once a copyrighted work is sold in the form of a book, record, film print, videotape, etc., the right of the copyright owner to control subsequent use of that specific copy of the work largely expires. Other rights such as the right to make copies of that copy – the very heart of “copy right” law – survive the first sale. But in the 1970s, in order to cultivate the new home video market without giving up its other rights, the content community moved to codify its rights and limit the implications of “first sale.”
The US Copyright Law of 1976 provided two key concepts that ensured that ability to sell consumers videocassettes of movies to view in their homes without compromising content providers’ ability to retain and exploit other rights.
First, the 1976 act provided that when consumers buy and own a videocassette – or other physical media – the content that it contains is not owned but licensed, and is subject to the terms and conditions of that license. And while the owner of the videocassette can then resell the cassette, the content that it contains remains subject to the same license terms and conditions regardless of the cassette’s ownership.
Second, the 1976 act provided that copyright owners can separate ownership of the media from the rights that they grant to the content contained on it under a license, and established the difference between public performance rights to content and private home use. While consumers may argue their own interpretation of “private,” the only definition that matters is the definition under the law.
The 1976 Copyright Act (U.S. Code, Title 17), establishes that one of the exclusive rights granted to the copyright holder of a motion picture and other audio visual works is the right to “perform” that audio visual work “publicly” (Section 106 [4]).
To perform a motion picture or audio/visual work “publicly” under the law means:
“To perform or display it at a place open to the public or”…”at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered.” (It has been interpreted that access to a location rather than an actual gathering in that location is all that is required to consider a location “public”.)
The Motion Picture Association of America (MPAA), representing the major US. studios, states: “Companies, organizations and individuals who wish to publicly exhibit copyrighted motion pictures and audio/visual works, must secure licenses to do so.”
This means that since commercial aircraft are open to the public, and/or are places “where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered,” the use of copyrighted content on such aircraft requires a public performance license from the copyright proprietor.
Therefore, cassettes and discs that contain content that is licensed for private home use cannot be used to provide content to aircraft. Neither can airlines simply capture television signals from satellites that carry content licensed for private home use and use it onboard without separate public performance licenses.
ARGY-BARGY
The first airline in the US to put live satellite television onboard did so originally with the assumption – reinforced by the DBS (direct broadcast satellite) provider – that any of that content could be provided to the aircraft under the licenses held by the DBS provider. This writer called the oversight to the attention of the CEO of the airline, and after a bit of what my late friend and colleague Brendan Gallagher termed an “argy-bargy,” the DBS provider corrected the oversight, obtaining licenses for content for initially 24 – and then more—channels.
Rather than HBO movies they instead boarded documentaries, but after years of licensing efforts, the satellite services offered in IFE today are good entertainment, albeit limited to the kind of content that can be covered by separate public performance licenses.
A defining characteristic of the 1976 Copyright Act – written with a 40-pound Betamax in mind – is that it defines rights by place and time. When the authors of the Act sat down to write it, they remarked that they were writing a law “that would last for twenty years.” And they were right.
In its simplest form, copyright protection means protection against making copies of certain kinds of intellectual property. In this respect, the provisions of the 1976 copyright law and Internet technology were found to be at odds. While copyright law forbids copying, almost everything involved in Internet Protocol involves copying. PCs copy, as do network components such as routers and switchers and servers, albeit temporary copies, to maximize the efficient flow of information.
The inequity between the requirements of information flow and traditional copyrights resulted in a global restructuring of copyright laws in the 1990s that is still underway.
The Digital Millennium Copyright Act of 1998 (DMCA) was passed by the US Congress on 12 October 1998, and was signed into law by President Clinton on 28 October 1998. Basically, DMCA was passed for the purpose of implementing two 1996 World Intellectual Property Organization (WIPO) treaties: The WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty, that supplemented the 1976 act.
But the location-based nature of the 1976 act continues to be challenged by changes in technology. Content providers leverage technology to provide consumers with the benefit of portability, as in laptops and tablets and smartphones, giving rise to consumer expectations that they can carry their content around. Under the concept of the “Cloud”, consumers expect to access their content any time, any place. And copyright law based in time and place is increasingly out-of-date.
August 26, 2012
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