The show must go on
The show must go on - Griffith Hack
|23 April 2012|
|The Australian Federal Court’s recent decision in Singtel Optus Pty Ltd v National Rugby League Investments Pty Ltd (No 2)  FCA 34 will impact on commercial deals entered into by rights holders such as sporting bodies and broadcasters, and also concerns consumers in terms of the way they record live television shows for their own personal use.|
What you need to know
Optus TV Now service
|The TV Now service was launched in July 2011 and allows subscribers to record and watch free-to-air television shows on their computer or mobile phone. On some mobile phone devices, such as the iPhone, it is possible to replay the show on a delay of as little as two minutes while the show is recorded.|
|Since 2007, Telstra has paid the National Rugby League (NRL) for an exclusive licence in relation to NRL matches so that it can provide that content to the public via the internet and mobile phones. The agreement with the NRL is up for renewal in 2012. In 2011, Telstra renewed a similar agreement with the Australian Football League (AFL) which lasts until 2017. The AFL, NRL and Telstra alleged that Optus infringed their copyright because the TV Now service allows copies to be made of the AFL and NRL matches (TV Footage). Optus can essentially provide the same service as Telstra (but for a short delay) and is in direct competition. One of the key reasons why the AFL and NRL want to restrain Optus providing the TV Now service is to preserve the value of their agreements with Telstra.|
Optus has always maintained that the TV Now service, used in accordance with its terms and conditions, does not infringe the copyright of sporting bodies such as the NRL and AFL. It argues that any recordings of the TV Footage are made by subscribers and are for personal use within an exception of theCopyright Act 1968 (Cth) (the Act).
|Justice Rares held that no copyright infringement had occurred. In reaching his decision, the Judge considered the ‘timeshifting’ exception in the Act, which provides that a person does not infringe copyright in a broadcast: “If a person makes a copy of a cinematograph film or sound recording of a broadcast solely for private and domestic use by watching or listening to the material broadcast at a time more convenient than the time when the broadcast is made.”|
In arriving at his conclusion that no infringement had occurred, the Judge made the following findings:
What can be expected?
|The AFL, NRL and Telstra have appealed the decision of the Judge at first instance.|
The fundamental issue for the AFL and NRL (and any other businesses that rely on sponsorship deals) is that the TV Now service (or similar technology) could affect a significant part of their revenue chain. Both the AFL and NRL have segmented their copyright in the TV Footage and are able to drive up the revenue through rights deals with broadcasters.
If the Court permits products like the TV Now service to enter the market, this may erode the value of the types of deals previously done and sporting bodies may need to consider alternative avenues to attract revenue from broadcasters or sponsors. Until sporting bodies have considered other revenue models, it may be difficult for them to negotiate and obtain
the same value for their rights deals in the future.
It is clear that in this day and age, technology is a shifting landscape and methods of communicating to consumers are constantly changing. A lesson to be learnt from Telstra’s situation is that parties negotiating with rights holders in the digital space need to consider carefully whether a lengthy term in their agreements, or even a five-year deal, is appropriate in this type of environment.
|Click here to listen to Kellie's BRR Media interview on this case.|
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