From the Blog:
Information Wants to Be Free
Netflix in Libraries and Hypocrisy
By Meredith Farkas September 18, 2010
"This afternoon, I read a post at the Wired Campus blog about libraries loaning out Netflix discs to students and faculty. They point to a guest post from a librarian on Tame the Web who discusses how she is doing this at her library. She touts it as a great way to offer more DVDs to patrons than her library could possibly afford to purchase. Then I see that there was a 2010 article in Library Trends, a scholarly publication, describing using Netflix to expand the library’s DVD offerings as well (I can’t read it because our databases have a 1 year pay wall for LT). At this point I am gobsmacked, not because this is a brilliant idea, but because I can’t believe librarians would actually publish and brag about how they are willfully violating a company’s terms of service.
According to Netflix, “The use of the Netflix service, including DVDs rented to you by us and the Netflix instant streaming discs is solely for your personal and non-commercial use.” They are not saying that you can give this to others. They are not saying that you can use this in the classroom. They are saying that this is for your personal use and you can’t make any money off it. Netflix does not have institutional subscriptions. Therefore, what the library is doing is in violation of Netflix’s terms of services and opens them up to legal repercussions. And it’s not just one or two libraries doing this. I found a number of other libraries offering Netflix discs to their patrons. This library states that the use of Netflix discs is “designed for instructional purposes only; it is not intended for recreational or home use” (which is the opposite of Netflix’s actual Terms). Does the library think that somehow that makes it better? This library makes money when someone returns a Netflix disc late, which could also test the boundaries of non-commercial use (I’m not a lawyer… just conjecture). This one charges a $50 lost fee when a Netflix disc is lost (is that how much DVDs cost these days?). This library also only loans out discs to instructors, as if that somehow makes it ok to willfully disregard the Terms of Use.
"So what’s the justification for this? In addition to the “this has saved us an enormous amount of money” justification Rebecca Fitzgerald at Concordia College, author of the Tame the Web post, makes 3 arguments in response: 1) “there have been no legal repurcussions involving our Netflix accounts”, 2) “No one from Netflix has questioned this”, and 3) “our library is not the first to use this program.” Well, clearly that makes it ok, right? This sounds like the same arguments people who violate copyright make. Well, you know, everyone is doing it. We need to do it because we couldn’t afford to provide all these things otherwise. No one has told me not to. Actually, they have. They told you not to in the Terms of Service, which you tacitly accepted when you signed up for the service.
"It’s annoying enough when average people do things like this, but librarians should be smarter than that. We are supposed to be the ones helping faculty stay on the straight-and-narrow regarding copyright. What kind of an example are we setting when we show such flagrant disregard for a company’s Terms of Service? And this not only opens a library up to being sued by Netflix; it also opens the library up to being sued by the studios that own the movies libraries are saving money on by not purchasing and getting through Netflix. There are a number of video on demand services that are designed for use by educational institutions, so it’s not like Netflix is the only option for making a huge wealth of video material available for instructional use. What it is is the cheaper option. Are librarians really this clueless and/or irresponsible?
"Now, let’s imagine that there’s a grad student who is really impressed with his library’s collection and thinks it sucks that average folks in his community do not have access to the same wealth of books and DVDs. So, because he’s a grad student, he gets a longer loan time and he decides that he is going to check out books and DVDs for people in the community who are not affiliated with his university. He creates his own policies and loan times and even charges late fees to “borrowers” which nets him a little income too. Now, essentially, the library is loaning books out to people who are not members of the university community without their knowledge and in violation of their policies. Now let’s say that this guy is so brazen that he actually sets up a website touting this service he offers and a librarian happens to see this website. What do you think will be the reaction of the library? This guy would be in a whole heck of a lot of trouble. At a minimum he’d lose his borrowing privileges, but I bet it would go further than that. And how is this any different from what libraries are doing to Netflix?
"I have to say that I am still in a state of shock that so many libraries, including some major Universities, are doing this. I keep thinking that there is something I’m missing that somehow makes this ok. But I really can’t see it. Could someone enlighten me?"
From:
LibraryLaw Blog
Using Netflix in a Library
by Peter Hirtle September 18, 2010
"One of the things that Napster taught us is that just because it is easy to do something, it is not always legal.
There is a recent post that has been getting some buzz. In “Using Netflix at an Academic Library,” Rebecca Fitzgerald describes how Concordia College uses a Netflix subscription to supply movies to students. She reports that using Netflix subscriptions has been a great success, saving the library over $3,000 so far by substituting film purchases and licensing with Netflix rentals and instant play.
"The program appears to be popular with the students and saves the college money. It is easy - but is it legal? I don’t see how.
"Here is the problem: As one of the commentators on her post notes, when you sign up with Netflix you enter into a binding contract with them. The terms of that contract specify that “our DVD rental service and the content on the Netflix website, including content viewed through our instant watching functionality, are for your personal and non-commercial use only and we grant you a limited license to access the Netflix website for that purpose” (emphasis mine). As far as the instant play service of Netflix, its end user license stipulates that Netflix grants the licensee “a non-exclusive, limited, personal and nontransferable license, subject to and conditioned on your compliance with the restrictions set forth in this License Agreement, to install and use the Software.” To whom does this apply? Netflix stipulates that the licensee includes “members of your immediate household for whom you will be responsible hereunder and users of the personal computer or Netflix ready device with which you are accessing the Netflix Service and for whom you will be responsible.
"I don't see how a library subscription to Netflix could be considered to be “personal” – not when the purpose of the subscription is to lend the movies to others, rather than watch them yourself (as if a library could even watch a movie.) Nor can authorized users of a library be considered to be “members of your immediate household,” nor could library workstations be considered to be “personal computers.” I am not even sure that we could consider Concordia’s use to be non-commercial, since its purpose is to avoid paying purchase, rental, and licensing fees – and avoiding purchasing an item has at times been considered to be “commercial."
"It looks to this non-lawyer like Concordia may not be complying with the terms of the license. As a general rule, I think libraries should respect the terms of the contracts they enter into. If you don’t like a license, regardless of whether it is the license that accompanies an e-book reader or a Netflix subscription, try to change it. (At least one recent article suggests that we should be trying to negotiate different terms so that Netflix subscriptions can be used in higher education.)
"Of course, one can also ask how much risk does Concordia College face because of the library’s actions. In reality, the answer is probably "not much." Fitzgerald reports that to date “There have been no legal repurcussions (sic) involving our Netflix accounts.” If Netflix found out about Concordia’s program and objected, it is most likely that it would simply cancel the library’s membership rather than also bring legal action. I am a little more worried, though, about the possible response of copyright owners. Movies that have been secured via Netflix in violation of the license agreement between Netflix and the end user (or that are used in ways that Netflix has not licensed) are no more legal than pulling the movie off of BitTorrent. A copyright owner could theoretically sue Concordia College for willful copyright infringement (distribution, in this case), which carries with it a $150,000 fine per infringed movie. Until recently, however, suing schools and libraries was considered poor form, and so the risk of a lawsuit is likely still small.
"Given the potential high risks that a Netflix lending program entails, though, I would only enter into such a program with the full support of my institution’s legal department. I hope that Fitzgerald considers posting Concordia’s counsel’s legal assessment of the risks and benefits of the program. (And let me credit Fitzgerald’s piece for at least raising the issue, something that a Library Trends article that she cites in her post fails to do.)
"Is there any way a library can utilize Netflix in its collection development? Certainly negotiating with Netflix for different terms would be a start (though it would not surprise me if Netflix’s agreement with the film distributors might actually prohibit anything but personal, non-commercial use). A library could also consider buying individual memberships in Netflix for all of the students. But until I see a legal justification for a Netflix borrowing program, I think this has to go into the “easy – but not legal” category.
"UPDATE: An article on the topic in the Chronicle of Higher Education indicates that Netflix agrees with me that library use of a Netflix subscription is outside of the terms of use. It does not discuss whether such a use would, in addition to being a contractual problem, also be a copyright infringement."
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