TELEVISION; Adapt to survive

AdMedia,  Nov 17, 2004  by Sarah Bacon

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In January 1999, TiVo Inc introduced a digital home entertainment device that has spawned a category of technology known as Digital Video Recorders (DVRs).DVRs operate differently from VCRs in that the device digitises an incoming TV signal and records it on the DVR's drive, so a user can play it back whenever he or she wishes.

DVRs allow users to record large numbers of television shows, control live television by using pause, rewind and fast forward functions, record shows on durable DVDs, and some models utilise a one-touch system to skip advertising breaks.The proliferation of DVRs in the US and in Europe has concerned both broadcasters and advertising agencies on the basis that advertisers will not pay for conventional television spots if viewers can simply skip them completely.In the US in 2001, Sonicblue, the developers of ReplayTV, a mechanism that allows viewers to automatically skip or remove advertisements from recorded broadcasts and send recorded broadcasts to other users, was sued by a number of large studios and networks. The plaintiffs alleged that the technology violated their copyright in the programmes broadcast and that it attacked the fundamental economic underpinnings of free-to- air television by allowing the removal of advertising. Sonicblue eventually filed for bankruptcy.Could a similar suit be successful in NZ to prevent the use of this technology here? The answer is that it is possible, but unlikely.Copying television broadcasts in NZ infringes the Copyright Act 1994 unless the broadcast has been recorded for the purposes of time shifting in accordance with section 84 of the Act. In that regard viewers may record television shows if the recording is: for private and domestic use; and solely for the purpose of enabling the recording to be viewed or listened to at a more convenient time; and retained for no longer than is necessary. A recording that is retained for longer than is necessary becomes an infringing copy.It is arguable that those who use the automatic skip function on a DVR breach section 84 of the Act in that the viewer is not recording the television show solely for the purpose of time shifting but for the combined purpose of time shifting and removing commercials.Accordingly if it can be argued that DVRs with this function allow viewers to circumvent the copyright protection afforded broadcasters by the Act then, arguably, in accordance with section 227 of the Act, the suppliers of such DVRs may be liable to the broadcaster on the basis that the DVR is a device "intended to circumvent copyright protection, or information to enable such circumvention".In my opinion this is a difficult argument for broadcasters to maintain, particularly given that the essence of what is complained about is that viewers are able to skip commercials, which is really no different to viewers using the fast forward function on VCRs or channel surfing during live broadcasts. In other words DVRs allow viewers a more convenient method of doing what they are able to do now. Moreover the fact that the Sonicblue claim was eventually withdrawn speaks volumes about the adequacy of the arguments available to the studios and networks.If it is not possible to prevent the entry of this technology into NZ, and if DVRs become as popular as their manufacturers anticipate (and as a result viewers tend to watch broadcasts recorded on DVRs rather than live broadcasts), advertisers may need to adapt.This may mean a greater reliance by advertisers on product placement, sponsorship and alternative advertising. Moreover, DVR manufacturers such as TiVo, who offer a comprehensive digital service, may become important players in the advertising industry.Broadcasters and those in the advertising industry will need to keep a wary eye on the DVR industry and the effects DVRs have in the US and Europe where their use is fast becoming commonplace.Adaptation may be the key to survival.Sarah Bacon (sarah.bacon@izardweston.co.nz) is a partner in Izard Weston and is a specialist media lawyer.

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