United States: Rolling With The Punches: The Fight Over Livestreaming

Boxing fans eagerly awaited the May 2, 2015, championship match between boxers Floyd Mayweather, Jr. and Manny Pacquiao. But the fight also drew the interest of those following online video apps Meerkat and Periscope. Launched at the end of February 2015, Meerkat is a livestreaming iPhone app that allows Twitter users to stream videos from their phones to their Twitter accounts in real time. The Periscope app, which Twitter acquired in January for a reported $100 million, provides similar livestreaming functionality, though Periscope's streams remain online for playback for an additional 24 hours, while Meerkat's streams can only be watched live or saved to users' individual camera rolls.

As joint producers of the Mayweather-Pacquiao fight, premium networks HBO and Showtime had exclusive rights to transmit the event live. Unless you had a ticket to the MGM Grand in Las Vegas, the only authorized way to view the fight was on pay-per-view at a cost of up to $100. Some fans, however, avoided the pay-per-view fee by watching livestreams of the event through Meerkat and Periscope. A number of Meerkat and Periscope users streamed the fight either from their seats at the arena or, more commonly, simply by pointing their phones at their television screens. Although a livestream of a TV screen may not provide great quality, it was apparently good enough for viewers to figure out what was happening in the fight. At least one stream was reported to have over 6,000 people watching at one point. Assuming a pay-per-view charge of $100 per viewer, that meant $600,000 of pay-per-view fees not being paid to HBO and Showtime.

Prior to the fight, HBO and Showtime had already taken steps to prevent piracy from eating into their pay-per-view revenues. Five days before the fight, Showtime and HBO filed a complaint in the Central District of California against nine websites advertising that they would stream the fight for free. In the complaint, the plaintiffs, as the copyright owners of the coverage to be filmed by the single authorized camera crew, alleged direct, contributory and vicarious copyright infringement and asked for an injunction prohibiting defendants from "hosting, linking to, distributing, reproducing, performing, selling, offering for sale, making available for download, streaming or making any other use of the [c]overage." The plaintiffs also asked for damages and attorneys' fees. On April 28, 2015, the court granted plaintiffs' request for a temporary restraining order and ordered the defendants to show cause why the terms of the temporary restraining order should not be entered as a preliminary injunction.

But HBO and Showtime were unable to take similar preventive action against piracy by individual users of Meerkat and Periscope. However, after the streams began appearing, they did issue takedown requests to Periscope under the notice and takedown procedures of the Digital Millennium Copyright Act (DMCA). According to a Twitter spokesperson, Periscope, which operates independently of Twitter, received 66 takedown requests and took action against 30 broadcasts in response to the requests; the remaining Periscope streams had already ended or were no longer available. Compared to Periscope, Meerkat presents even greater challenges for broadcasters when it comes to policing piracy, because everything on Meerkat is live and there is no storage of streams for future viewing. As such, the policing of Meerkat streams requires real-time vigilance and action (indeed, it is unclear to what extent if any the DMCA's notice and takedown procedures would apply to Meerkat's current business model). According to Meerkat chief executive Ben Rubin, however, "[Meerkat] worked closely with the content owners and contacted users they alerted us about."

The Mayweather-Pacquiao fight was not HBO's first time in the ring with Periscope on piracy issues. In mid-April 2015, HBO sent takedown notices to Periscope after Periscope users livestreamed episodes of the HBO show Games of Thrones. Periscope reportedly took action against the infringing account holders.

All of this sparring between content owners and users of livestreaming apps highlights the tension between the legitimate interests of content providers in preventing piracy and the equally valid interests of technology companies (and the general public) in encouraging the growth of this new technology. For its part, HBO has suggested that DMCA takedown notices may not be sufficient and that app developers should "have tools which proactively prevent mass copyright infringement from occurring on their apps and not be solely reliant upon notifications." Others have opined that livestreaming apps should develop tools like Google's Content ID system, which automatically scans videos uploaded to YouTube against a database of files submitted by verified content owners and gives the owners the option of muting, blocking, monetizing or tracking the content.

It should also be noted that, depending on the circumstances and content being streamed, users of livestreaming apps may also be able to assert a fair use defense under Section 107 of the US Copyright Act. For example, it would not be difficult to imagine a case similar to Lenz v. Universal arising in the livestreaming context. In Lenz, Universal Music Publishing Group objected to a YouTube video uploaded by Stephanie Lenz that showed her children dancing along to the Prince song "Let's Go Crazy." Universal issued a DMCA takedown notice to YouTube and Ms. Lenz sent a counter-notice claiming fair use. Eventually YouTube restored the video, and the litigation between Ms. Lenz and Universal continues to this day. The difference, of course, is that issues of fair use (and takedown notices and counter-notices) will quickly become moot in the livestreaming context due to the ephemeral nature of the medium.

Only time will tell how long and how violent the fight between content owners and users of livestreaming apps like Periscope and Meerkat will be. At least for the moment, however, it does not seem that the content owners within the mainstream entertainment industry are immune to the commercial and promotional opportunities that livestreaming apps offer. In an ironic twist, HBO itself used Periscope as part of its pre-fight hype, streaming content to its Twitter feed from Manny Pacquiao's dressing room.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

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Aaron P. Rubin
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