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The fight was telecast as a joint production between Showtime and HBO and streamed via pay-per-view at around USD 100 per household, while tickets to the live event at the MGM Grand Hotel surged to nearly USD 7,500 each, generating more than USD 500 million in total revenue for the event.

But after the final bell was rung, the world was buzzing about an unexpected winner. While pay-per-view service generated more than USD 400 million dollars alone, sports writers and media analysts heralded live-streaming as the clear winner of the night. The underdog live-streaming platforms, indie-startup Meerkat and Twitter-backed Periscope, transmitted footage of the event from both inside the arena and from households watching the pay-per-view telecast, allowing thousands of viewers to watch the fight for free. Immediately after the fight, then-CEO of Twitter Dick Costolo cheekily summed up the match results in a 5 word tweet: “And the winner is… @Periscopeco”.

In early 2015, entrepreneur Ben Rubin debuted Meerkat at the South by Southwest Festival in Austin, Texas. The new web application made live-streaming more accessible and dynamic by packaging the technology into a user-friendly application for mobile devices and integrating the platform with social media sites. The app allowed users to live-stream content through the lens of their cellphone or tablet, similar to the video conferencing capabilities provided by Skype and FaceTime.

However, instead of intercommunicating between two users as with video conferencing, Meerkat put users in the role of a one-way video broadcaster. When a Meerkat user initiated a live-stream session, the app would tweet a link to the session via Twitter, allowing any number of users to click through and view the video in real time. Within two weeks, Meerkat had been downloaded to over 100,000 devices, with early adopters ranging from techies and celebrities to mainstream media outlets.

Soon after Meerkat’s successful debut, Twitter purchased a competing beta application, enhanced and expedited development, and launched Periscope on 26 March 2015. Similar to Meerkat, Periscope offered users the ability to live-stream video content from their mobile device, with links straight to their Twitter account. However, in addition, Periscope saved and posted all live-streamed video content to a user’s profile to be viewable for up to 24 hours.

While both apps may have started out in slightly different forms, each platform has since introduced features making them now very similar, such as the ability to save stream sessions to the app or device and interact with other uses. However in their current form, the apps still essentially allow a user to stream content one-way to an audience, with the content automatically deleted from the application either instantaneously or after a short period of time. While two-way real-time video conferencing has existed for many years, the instantaneous and transitory nature of the content transmitted through these applications combined with the breadth of a user’s audience is revolutionary.

These new platforms present unique concerns for media and entertainment companies in terms of intellectual property infringement and piracy. Both from a legal and a business perspective, the industry must creatively respond to the constantly changing face of content consumption.

This new technology is likely to have the greatest impact on live events and public performances.  Live events and public performances thrive on the novelty of real-time viewing, and therefore gain the most revenue from guest attendance at the performance and viewership of the initial broadcast. As the industry saw with the Mayweather-Pacquiao match, these platforms make it incredibly easy to transmit potentially infringing content to thousands of viewers in real-time. While the content may only be visible for a limited time, this could significantly affect ticket sales and advertising revenues.

If the live event or components of the live event are protected by copyright, content creators may be able to seek remedies through litigation. For example, concerts and musical performances will contain music and lyrics, both of which are likely protected by copyright and therefore any unauthorised reproduction would infringe that copyright. Similarly, live-streaming the exhibition of a film from a movie theater would also infringe copyright. However, a football game or the Mayweather-Pacquiao boxing match would likely not be protected by copyright, meaning any original fan footage shot from within the venue would not be subject to an infringement claim. To counter this, most venues seek to rely on finely printed contracts on the back of guests’ tickets which specifically prohibit fans from recording or transmitting the event.

Fan footage, however, is generally not the greatest piracy concern for the entertainment industry. Fan footage is typically of poorer quality than professionally-recorded transmissions, leading viewers to seek out streams or copies of copyrighted professional broadcasts. Indeed, the real concern in the Mayweather-Pacquiao match did not come from the fans live-streaming from the audience, but rather from the viewers who live-streamed pay-per-view transmissions of the fight from the televisions in their living rooms. End users were able to access copyright live-footage originally telecast by HBO and Showtime without paying the USD 100 fee.

One option for copyright holders to combat this new real-time piracy is to pursue litigation for direct copyright infringement against individual Meerkat and Periscope users. Even absent copyright concerns, venues can likely pursue legal action for fan footage shot in breach of their ticketing contracts. However, from cost, efficiency, and public relations perspectives, litigation against individual users has not been the remedy preferred by copyright owners. And with the unique features introduced by new live-streaming platforms, such as the transitory nature of user content, pursuing legal action against individual users would be frustratingly difficult. Finding, let alone gathering evidence of, live-streamed infringing content would require nonstop real-time surveillance and third party recordings of these applications in use.

Alternatively, copyright holders could pursue secondary copyright infringement claims against the owners of live-streaming applications themselves. This, however, would be an uphill struggle as current US case law would likely not support a finding of contributory copyright infringement against the platforms in their current forms. Since a majority of users utilise these live-streaming applications for legal purposes, such as blogging and social media, the platforms would likely be found “capable of substantial non-infringing uses” and therefore not liable (Sony Corp. v. Universal City Studios, Inc.). Further, courts would not likely be persuaded to follow Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd. unless it could be demonstrated that either application was created with the intent, or currently has the objective of, promoting copyright infringement.

The more convenient remedy in the industry has been to use DMCA takedown notices, whereby copyright holders can submit notices to ISP’s or hosting companies when they find their content being illegally exhibited online. This bypasses litigation and provides a much easier and cost effective resolution. Some see this as a promising remedy against infringement on new live-streaming applications. HBO reportedly sent Periscope several requests for live-streams to be removed due to copyright infringement concerns after both the Mayweather-Pacquiao fight and the season five premiere of Game of Thrones.

However, the effectiveness of DMCA takedown notices is inhibited if not completely negated in real-time piracy, especially in the context of live events. While the notices may not be costly for the copyright holder to send out, they require time. In a medium where content is exhibited and deleted in real-time, a DMCA takedown notice cannot appropriately protect copyright holders. This is especially concerning for those broadcasting live events, where the value for the viewer is in watching the match in real-time. Even if a copyright holder sends a timely takedown notice as the broadcast was occurring, the damage will have already been done. The length of time that the responding platform would take in acting on the notice would likely exceed the digital life of the infringing stream. The viewers of the stream will have enjoyed the entire event via live-stream, and will have had no incentive to pay for the original broadcast.

It seems that the media and entertainment industry is faced with another new challenge that may be difficult to address under current law. This is nothing new however, as technology and digital media constantly shift and advance with law always playing catch up. As technology advances to allow the pushing of legal boundaries, the media industry may also look to technology to better protect its content, perhaps by adapting current anti-piracy methods. With appropriate audio watermarking technology and compliance by new live-streaming platforms, the amount of real-time piracy could be reduced. While this will still require diligence and effort by both the copyright holders and the live-streaming applications, it could lessen the need for continuous monitoring and easier identification of infringers.

Meerkat and Periscope have already changed the way viewers consume content (or at least provided a new access point) and highlighted some new challenges for rights holders. While these platforms remain relatively new in our current digital media landscape, as content creators, advertisers and lay users learn how to best utilise the platforms, the medium seems here to stay and they are likely to continue to shift. Absent changes to current law, copyright holders, event organisers and their attorneys should already be aware of the risks of infringement they create and be considering how to address those risks. They should also consider whether and how they can utilise these apps themselves, for the advantage of their business.


It’s a Knock-Out: How Live Streaming Apps Are Changing the Entertainment Landscape

Written by Robb Klein,

Sheppard Mullin Richter & Hampton

The highly anticipated boxing match between Floyd Mayweather, Jr. and Manny Pacquiao on 02 May 2015 in Las Vegas, Nevada was set to be the “Fight of the Century”. Thousands of spectators travelled to the Vegas Strip to share in the excitement, flooding McCarran International Airport with private jets and temporarily shutting down runways, as millions more tuned in from around the world.

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Robb Klein

Robb Klein is a partner and the Practice Group Leader of the Entertainment, Technology and Advertising Practice Group in the firm's Century City office. He specialises in all aspects of entertainment, media and communications law, particularly film and television financing, production and distribution, merchandising and the licensing of rights and new media. Mr Klein has worked on the financing and production of numerous feature films, from small independent movies to studio blockbusters. He has also worked on numerous deals utilising tax incentives around the world and specialises in structuring international co-productions. His work for financiers includes acting for banks, entrepreneurs, tax funds and hedge funds, often involving secured lending and complex multi-party financing arrangements. Mr Klein represents studios, independent production companies and individual producers and advises on chain of title and copyright issues, joint development agreements, co-financing agreements, output agreements, first-look agreements, re-make deals, rights acquisition agreements and options. His work includes advice on negative pick-up agreements and related financing documents, format rights and television licensing agreements, sales agency and distribution agreements. Mr Klein has also acted as production counsel on many films.