THE APPLICATION OF THE APPLICATION OF COPYRIGHT LAWS & OTHER COPYRIGHT LAWS & OTHER CONSIDERATIONS IN THE CONSIDERATIONS IN THE

USE OF LIVE TELEVISION IN USE OF LIVE TELEVISION IN IFEIFE

Prepared for the Prepared for the

World Airline Entertainment AssociationWorld Airline Entertainment Association

by Michael Childersby Michael Childers

President & CEO,President & CEO,

LightStream Communications GroupLightStream Communications Group

info@lightstreamcom.cominfo@lightstreamcom.com

3 Key Areas of IFE 3 Key Areas of IFE EvaluationEvaluation

The Technology SystemThe Technology System

The Content IssuesThe Content Issues

The Business ModelThe Business Model

Key IssuesKey Issues

Legal IssuesLegal Issues Administrative ConsiderationsAdministrative Considerations Technology ImplicationsTechnology Implications

What are the key issues airlines need to considerwhen evaluating “live-to-air” IFE, i.e., satellite-delivered programming?

Legal Issues:Legal Issues:

2 Categories2 Categories

– Regulatory ConsiderationsRegulatory Considerations– Copyright LawsCopyright Laws

The United States 1976 Copyright The United States 1976 Copyright Act (U.S. Code, Title 17) classifies Act (U.S. Code, Title 17) classifies motion pictures in two broad motion pictures in two broad categories:categories:

Private Home UsePrivate Home Use Public Performance ExhibitionPublic Performance Exhibition

Copyright LawCopyright Law

To perform a motion picture “publicly” To perform a motion picture “publicly” under the law means “to perform or under the law means “to perform or display it at a place open to the public or display it at a place open to the public or at any place where a substantial number at any place where a substantial number of persons outside a normal circle of a of persons outside a normal circle of a family and its social acquaintances are family and its social acquaintances are gathered.”gathered.”

- (Section 106 [4])- (Section 106 [4])

““Public Performance”Public Performance”

– Over-the-air network televisionOver-the-air network television

– local syndicated televisionlocal syndicated television

– cable televisioncable television

– pay televisionpay television

– satellite television including DBSsatellite television including DBS

– videocassettes, discs, DVDvideocassettes, discs, DVD

Private Home Use:Private Home Use:

Two Public Performance Groups:Two Public Performance Groups:

TheatricalTheatrical

Non-TheatricalNon-Theatrical

Public PerformancesPublic Performances

The timed sequence of release of The timed sequence of release of product through various markets product through various markets on a price-sensitive basis.on a price-sensitive basis.

Used by content providers to Used by content providers to protect price structure.protect price structure.

““Windows of Windows of Availability”:Availability”:

IFE is a non-theatrical public IFE is a non-theatrical public performance.performance.

The right to publicly perform content The right to publicly perform content is exclusive to the copyright owner.is exclusive to the copyright owner.

No content provider impacting IFE No content provider impacting IFE grants any downstream market any grants any downstream market any primary or secondary use license to primary or secondary use license to include service to aircraft.include service to aircraft.

IFE = Public IFE = Public PerformancePerformance

The decision as to whether to The decision as to whether to license content for use in a public license content for use in a public performance market through only performance market through only a single venue, or to permit a single venue, or to permit secondary use separated via secondary use separated via windows of availability, is also windows of availability, is also exclusive to the copyright owner.exclusive to the copyright owner.

Secondary UseSecondary Use

IFE is a non-theatrical public performance.IFE is a non-theatrical public performance. The right to publicly perform content is The right to publicly perform content is

exclusive to the copyright owner.exclusive to the copyright owner. No content provider impacting IFE grants No content provider impacting IFE grants

any downstream market any primary or any downstream market any primary or secondary usesecondary use license to service aircraft. license to service aircraft.

Rights not expressly granted in distribution Rights not expressly granted in distribution contracts are reserved by the copyright contracts are reserved by the copyright owner.owner.

IFE = “Exclusive Window”

“… “… the same programming in the air the same programming in the air that your passengers get on the that your passengers get on the ground, including PPV movies…”ground, including PPV movies…”

“… “… 30 TV channels at a cost 30 TV channels at a cost competitive with other forms of IFE competitive with other forms of IFE programming…”programming…”

Claims Made by SellersClaims Made by Sellers

““A performance made available by A performance made available by transmission to the public at large is ‘public’ transmission to the public at large is ‘public’ even though the recipients are not gathered in even though the recipients are not gathered in a single place… The same principles apply a single place… The same principles apply whenever the potential recipients of the whenever the potential recipients of the transmission represent a limited segment of transmission represent a limited segment of the public, such as occupants of hotel rooms...”the public, such as occupants of hotel rooms...”

- House Report, supra, at 64-65- House Report, supra, at 64-65

U.S. House of Representatives ReportU.S. House of Representatives Report

accompanying 1976 Copyright Actaccompanying 1976 Copyright Act

What about PTV?What about PTV?

““If the same copy… of a given work is If the same copy… of a given work is repeatedly played (i.e., ‘performed’) repeatedly played (i.e., ‘performed’) by different members of the public, by different members of the public, albeit at different times, this albeit at different times, this constitutes a ‘public performance’.”constitutes a ‘public performance’.”

- Z.M. Nimmer, 8.14 [C3], - Z.M. Nimmer, 8.14 [C3],

at 8-142 “Nimmer on Copyright”at 8-142 “Nimmer on Copyright”

What about VOD?What about VOD?

Exhibition inside an aircraft, Exhibition inside an aircraft, transporting a substantial number of transporting a substantial number of persons outside a normal circle of a persons outside a normal circle of a family and its social acquaintances, family and its social acquaintances, constitutes a public performance constitutes a public performance regardless of whether it is a regardless of whether it is a corporate or commercial aircraft.corporate or commercial aircraft.

What about corporate What about corporate jets?jets?

For an airline to have the right to For an airline to have the right to transmit onboard via satellite or other transmit onboard via satellite or other means the content of the Disney means the content of the Disney Channel, B-Sky-B, CBS, NBC, BBC, ITV, Channel, B-Sky-B, CBS, NBC, BBC, ITV, DirecTV, Star TV, HBO, Canal Plus, DirecTV, Star TV, HBO, Canal Plus, etc., etc., separateseparate licenses to licenses to eacheach program must be obtained from the program must be obtained from the copyright owner of each program.copyright owner of each program.

A Separate License for Each Program

The 4 Cost Centers in IFE:The 4 Cost Centers in IFE:

Hardware/Software Delivery Hardware/Software Delivery SystemsSystems

Content License FeesContent License Fees Program Delivery CostsProgram Delivery Costs Administration of Content LicensesAdministration of Content Licenses

Administrative Administrative ConsiderationsConsiderations

You You cancan avoid seeking third party avoid seeking third party licenses to individual programs on licenses to individual programs on a specific channel by obtaining a specific channel by obtaining output licenses from broadcast output licenses from broadcast services who produce 100% of services who produce 100% of their own programming.their own programming.

But these are a small minority… is But these are a small minority… is there enough?there enough?

““Output Licensing”Output Licensing”

30-52524

600

Channels

ChannelsHoursHours

200800

1000182.5

182,500

one-hour segmentshalf-hour segmentssegmentsbroadcast daysindividual program segments

You do the math:

Separating Delivery from the ProgrammingSeparating Delivery from the Programming

– It may be more practical for the airline to It may be more practical for the airline to

license programming separate from delivery.license programming separate from delivery.

– Is the interest in “live TV” content-driven or Is the interest in “live TV” content-driven or

delivery-driven?delivery-driven?

– Perhaps you can license specific programs and Perhaps you can license specific programs and

pull in their satellite signals selectively rather pull in their satellite signals selectively rather

than delivering all the output of each channel.than delivering all the output of each channel.

Other ConsiderationsOther Considerations

– Is it really “live TV” or is it “live” Is it really “live TV” or is it “live”

delivery of pre-recorded delivery of pre-recorded

programming?programming?

– People in IFE referring to “live TV” People in IFE referring to “live TV”

may often really mean “real-time, may often really mean “real-time,

fixed-schedule” programming.fixed-schedule” programming.

Live-to-Air-TVLive-to-Air-TV

Technology Technology ImplicationsImplications

What of Replay TV, TiVo and Web TV?What of Replay TV, TiVo and Web TV? A paradigm change in TV viewing is A paradigm change in TV viewing is

about to happen.about to happen. Is real-time, fixed-time programming a Is real-time, fixed-time programming a

thing of the past?thing of the past? If satellites are used only to download to If satellites are used only to download to

a hard drive for subsequent VOD a hard drive for subsequent VOD access, will there be channel identities access, will there be channel identities and configurations in the future?and configurations in the future?

Questions & Answers