DIY VOD

The New York Times had an interesting piece over the weekend describing how consumers’ increasing delayed viewing of prime time TV shows via DVR is playing havoc with early-season ratings, and raising questions about the potential impact on advertising revenue. Ad rates are typically set based on a show’s so-called C3 rating: all viewing, whether live or delayed, during the three days following initial broadcast. But as CBS’ long-time research head David Poltrack told the Times, “We believe that the four- to seven-day lift is going to be significantly higher this year than last year.”

Even C7 data, according to the Times’ piece, can miss a growing share of viewer activity these days as viewing goes from delayed to very delayed.

One big factor underlying the shift appears to be the growing storage capacity of DVRs, whether locally or in the cloud, which is allowing viewers simply to record and store more shows, which they may or may not get around to watching in a timely manner. Over on GigaOM, Janko speculates consumers may also be using that increased capacity to enable their own Netflix-style binge-viewing, by storing up several weeks worth of episodes to watch in one sitting.

If so, it’s another example of how consumers are increasingly able to piece together their own a la carte, on-demand, TV Everywhere experience using commercially available technology that is pushing — so far successfully — at the legal limits of permissible fair use.

Time-shifitng via DVRs has been considered presumptively a fair use since the first TiVo was introduced by virtue of the Supreme Court’s 1984 ruling in the Betamax case. But the Betamax court never squarely decided whether using a VCR for archival rather than mere time-shifting purposes, such as to build a library of recorded shows, fell within the lines of fair use, leaving it technically at least an open legal question whether leveraging increased DVR storage capacity to build your own binge-viewing library would qualify as fair use.

In its ruling in July denying Fox Broadcasting’s request for a preliminary injunction against Dish Network’s Hopper DVR, however, the Ninth Circuit Court of Appeals treated the question as essentially a non-issue:

Fox and its amici argue that Dish customers usePrimeTime Anytime and AutoHop for purposes other thantime-shifting – namely, commercial-skipping and library- building. These uses were briefly discussed in Sony, in which the Court recognized that some Betamax customers used the device to avoid viewing advertisements and accumulate libraries of tapes. In Sony , about 25 percent of Betamax users fast-forwarded through commercials…Additionally, a “substantial number of interviewees had accumulated libraries of tapes.”.. One user owned about 100 tapes and bought his Betamax intending to “build a library of cassettes,” but this “proved too expensive.”.. Because the Betamax was primarily used for time-shifting, the Court in Sony never expressly decided whether commercial-skipping and library-building were fair uses.

The Ninth Circuit didn’t attempt to expressly decide it, either, but goes on to address the other issues in the case as if library building were, in fact, a fair use.

So far, at least, courts have been following the logic of the technology in expanding the scope of behaviors that qualify as fair use.

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Sweeting

Paul Sweeting

Principal Concurrent Media Strategies

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