I have my first data point supporting my personal theory that suing libraries is the moral equivalent of hurting puppies. That point is a story by Adrianne Jeffries at ReadWriteWeb about libraries using Netflix’s disc rental and online streaming to supplement their own media assets and save some cash. The problem is that this use falls into a legal gray area, the terms of service allowing only personal use that are no doubt constrained by Hollywood’s license terms. Netflix does not offer accounts specifically for institutional use either. If they did, they’d undoubtedly be more expensive, having to pass along higher licensing fees demanded by content providers.
Netflix “frowns upon” this type of use, said Steve Swasey, Netflix’ vice president of corporate communications, but indicated no plans to enforce the rules. “We just don’t want to be pursuing libraries,” he said. “We appreciate libraries and we value them, but we expect that they follow the terms of agreement.”
Netflix may not have a choice, as much as I am sure they don’t want to incur the ill will harassing libraries would no doubt unleash. The use by libraries, especially larger university ones, is being openly publicized in educational news outlets and journals. This may ultimately draw the attention of the studios who could presumably threaten to pull their licenses if Netflix doesn’t act.
I think that this is a case where a marginally legal use can serve as market research. Netflix should research what the cost would be to license their library for this kind of non-personal use. Even if the costs turn out to be prohibitive, I still think their is an opportunity. In that case, they could rightly lay the blame at the studios’ feet. It would be a great press opportunity for the video rental service to look like a hero, trying to help educators stay within the law but encountering unreasonable royalty demands. I suppose any non-zero risk of such a ploy backfiring, even the most minute, is enough to prevent them from even trying, unfortunately.