Legal Forum Tackles Content Copyright and Licensing Issues

In the world of streaming media, the first question was one of technology - how to deliver high-quality streams to a broad base of users. The next question was one of economics - how to turn media streams into revenue streams. As evidenced by the recent MP3 and Napster cases, the question is now becoming one of law - who has what rights to streaming media revenues, and how can those rights be protected.

On October 25, Subscreen, a subsection of the Los Angeles County Bar Association's Intellectual Property and Entertainment Law section, presented California Streamin': Copyright and Licensing Issues in Internet Content Delivery, a workshop designed to examine these issues.

New legal controversies often accompany technological change, and so it is with streaming media. For example, the global nature of the Internet is playing havoc with the territorial rights that often apply to media content. The International Olympic Committee recently prohibited the streaming of Olympic events over the Internet because it threatened regional television broadcast rights. The same territorial issues exist in the music world as well. Because a U.S. license may not apply to music performed or released in Japan, it's still unclear which rights must be secured to legally stream or download music throughout the world.

Some legal issues discussed at the workshop are particular to the music industry. Music rights are secured in two basic forms from two distinct agencies. On the publishing side, "performance" rights are secured from licensing organizations like ASCAP and BMI. On the reproduction side, "mechanical recording" rights are generally secured through the Harry Fox Agency. Both agencies claim to control rights to both streamed and downloaded music.

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"I see major battles in Congress over changes in the law. The changes won't come from lawsuits."

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Lon Sobel, editor of the Entertainment Law Reporter and a speaker at the workshop, noted that content providers are already getting cease-and-desist letters from both agencies. Licensees will be loath to pay twice for the same rights. Attendees noted that it will likely take a court to decide whether the buffer in a RealPlayer is, in fact, "recording" the stream, or whether a downloaded audio file is any less a "performance" than an audio signal from a radio transmitter or digital cable.

Establishing rights and protecting those rights are two different things. James Root, the business development manager for Microsoft's Digital Media Division, noted that territorial rights management is possible using e-mail addresses or reverse IP lookup. And digital rights management solutions by Microsoft, InterTrust and others are so far proving successful in controlling and monetizing access to streamed and downloaded content. But Root also pointed out some compromises that content owners will have to consider. For example, users may only jump through so many hoops to validate themselves as licensees -- a factor that could cause sales of licenses - and thus, revenues - to decline. And while downloaded content may offer higher quality - streamed content is more difficult (but still not impossible) to pirate.

Bob Roback, CEO of Launch.com, noted that the music industry has historically fought many of the innovations - such as audio cassettes - that have brought them the most benefit. He points out, "The record companies have one view of consumer behavior and the dot-coms have another." Launch.com, which offers streamed, as opposed to downloaded music through its Web site, sees itself as a "marketing partner for the labels." Napster and MP3 music distributors also claim to be helping the music industry by building its customer base, rather than siphoning off revenue. However, the industry, as yet, remains unconvinced.

The coming legal battles may be fought on many fronts. "I see major battles in Congress over changes in the law," says Sobel. "The changes won't come from lawsuits." Sobel predicts that just as technological advances precipitated the sweeping Telecommunications Act of 1996, so will the Copyright Act of 1976 have to be rewritten in the not too distant future. Sobel points out, "Existing copyright law is based on factual assumptions that are no longer true."

Meanwhile, it was noted that the U.S. military intentionally bred chaos into the design of the Internet to keep cold war foes from interrupting military communications. Judging from the legal and legislative storm clouds that are forming on the horizon, that chaos seems to be alive and well.

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