Blog Ipsa Loquitur

Published on under Imaginary Property

Netflix announced this week that they’re cracking down on the use of VPNs. Among other uses for VPNs, they let users connect to web sites “from” other parts of the world. I’m in New York, but I can use a VPN in Sweden to connect to the Swedish version of Netflix, which has a different selection of TV shows and movies than the American version.

Popehat’s Mark Randazza has some thoughts on Netflix’s announcement:

I frequently log in to my Netflix account from an Italian VPN. I like to watch movies in Italian. I am teaching my kids Italian, and I like them to watch their cartoons in Italian. The same cartoons that are on my Netflix USA account are also available on Netflix Italy. But, for some reason, Netflix does not give me the option to change the language to Italian, as it does if I log in through an IP address in Europe. Netflix could easily offer the same shows with the Italian language option in the USA, but for some reason, they would rather not.

Zone shifting is a legitimate use. I can understand that Netflix would rather not let me access “Better Call Saul,” from my proxy server. They don’t have U.S. distribution rights to it yet, so technically, if I were to access Better Call Saul on that proxy server, I’m violating someone’s rights.

A cursory look on Google seems to indicate that Randazza has coined “Zone Shifting.” I love it.

a quick lawsplainer

Zone Shifting is an allusion to Time Shifting, which is the thing that saved the VCR. Back in 1979, Universal Studios sued Sony for selling the cutting edge Betamax analog videocassette magnetic tape home recording device. The Betamax could be programmed to record a certain TV channel at a certain time for a certain amount of time, which meant that anyone could make a copy of any show, movie, or sporting event. Universal (and Disney, and a whole bunch of folks who own the copyrights to shows, movies, etc.) were unhappy with the idea that it could be so easy to copy so many things. So they sued.

Sony v. Universal ended up being one of the most important copyright cases of the last fifty years. There are lots of moving parts in the case, but Time Shifting is one of the things that helped Sony and the Betamax win the lawsuit.

Universal argued that Sony had basically invited the public to engage in widespread copyright infringement by selling the Betamax, but the District and Supreme Courts found that Universal failed to show that the Betamax harmed them at all.

To put the whole case on fast-forward, Time Shifting is basically Fair Use because TV networks were already giving away the shows and movies via broadcast television. This is the fourth factor in a standard Fair Use analysis: harm done to the market for the work. You might be surprised that it didn’t harm the market, because people were copying the whole (copyrighted) movie or show. But the important part of the court’s analysis was ‘the entire movie was on TV anyway.’

Now sure, theoretically, folks could have taped stuff and formed some underground economy of Betamax swappers which killed the broadcast TV market. But again, Universal couldn’t show that they had been or were likely to be harmed at all. Worse, by the time the case got to the Supreme Court, Betamax had been A Thing for nearly a decade and the movie industry was having its best year ever. It’s really hard to argue that a device has harmed the market for your work when you’re making more from the market for your work than you ever have.

Besides the market effect, the most pertinent of the four Fair Use factors in Sony v. Universal was the first one, covering the purpose and character of the copy. Justice Stevens, in the majority opinion, wrote:

If the Betamax were used to make copies for a commercial or profitmaking purpose, such use would presumptively be unfair. The contrary presumption is appropriate here, however, because the District Court’s findings plainly establish that time-shifting for private home use must be characterized as a noncommercial, nonprofit activity.

Moreover, when one considers the nature of a televised copyrighted audiovisual work […] and that time-shifting merely enables a viewer to see such a work which he had been invited to witness in its entirety free of charge, the fact that the entire work is reproduced, see § 107(3), does not have its ordinary effect of militating against a finding of fair use.

Stevens compared this sort of personal use to photocopying a newspaper clipping and mailing to a friend, presumably to bewilder millenial law students who’ve never used a photocopier, newspaper, or post office. Time Shifting is a personal and Fair Use.

zone shifting

So Zone Shifting is the digital version of Time Shifting, except it’s arguably even more personal and therefore an even Fair-er Use. Time Shifting created a persistent copy of shows and movies that could be used to set up the aforementioned underground Betamax economy. Universal argued that that could (theoretically) decrease demand for the work. The copy created by Zone Shifting, on the other hand, persists only until you play something else. That makes it harder to show harm.

However: if you’re Zone Shifting to watch a TV show or movie that isn’t on Netflix in America, that’s a different story. Non-American Netflixes get movies and shows that aren’t available online in America. For example, Canadian Netflix gets all ten seasons of 24, six seasons of Community, eight seasons of Full House, six seasons of The Good Wife, all three seasons of Homeland, and many more.

In such a scenario, the argument for Zone Shifting as an analogy to Time Shifting falls apart real fast. Having an HD copy you can watch any time you like is probably detrimental to the market for selling DVDs. We’ll stick to the ‘Zone Shifting for other languages’ use case.

Again, of the four Fair Use factors, the court in Sony v. Universal cared the most about the first and last: the purpose of the copy and the effect on the market. If the theory of Zone Shifting as Fair Use were to be tested in court, that’s where a judge would start.

the purpose of the copy

The first factor shakes out just about the same way in Zone Shifting as it did in Time Shifting. The copy is being made for personal use, and while you’re making a copy of the whole show, you’ve already been invited to watch the whole show. Also, there’s a little extra wrinkle here. The Italian version of a cartoon is actually a separate copyrightable work than the original English version. They’re thematically similar, but legally distinct; you’re not allowed to pirate one version of Sherlock Holmes because the other version was just on TV.

There’s a bonus argument in favor of Zone Shifting as Fair Use, too. During the Sony v. Universal arguments at the Supreme Court, Children’s TV show host and everyone’s favorite neighbor Mister Rogers may have saved the day single-handedly:

“[he] testified that he had absolutely no objection to home taping for noncommercial use and expressed the opinion that it is a real service to families to be able to record children’s programs and to show them at appropriate times.”

Educational uses get a lot of the benefit of the doubt in Fair Use analyses, whether or not Mr. Rogers shows up to personally lend his gentle tenor to your cause. In the case of Zone Shifting, as I said before, watching shows that aren’t available in your country probably isn’t Fair Use. But showing your kids the Italian version of cartoons they can watch anyway? You’d best believe that’s an educational use. Mister Rogers would be proud!

the copy’s effect on the market

The other factor is a little murkier. I would argue that it doesn’t hurt the market; there really isn’t much of a market for Italian-language versions of kids cartoons, as far as Netflix and publishers of the cartoons think. If there were such a market, Randazza wouldn’t need to use a VPN because Netflix and cartoon publishers would have worked out a deal to stream Italian-language cartoons here. And really, Zone Shifting helps publishers find out the extent of the demand for more languages in new regions. Netflix has pretty good analytics, I’d wager.

Alas, it’s not that simple. Copyright holders get the exclusive right to publish or not publish their work. If there’s no market because the copyright holder doesn’t want there to be a market, copying isn’t automatically Fair Use. For example, J.D. Salinger, author of Catcher in the Rye, won a lawsuit to stop the publication of a sequel to Catcher, even though Salinger has written no sequel. He owns Holden Caulfield, and you don’t: you can affect the market for all current (and future) Caulfield books by creating one.

Now, with Zone Shifting, that argument might go differently, because these aren’t fan-created translations; the publishers have gone through the effort to translate these cartoons. It would definitely be a lot closer than the Catcher case.

Ultimately, Netflix and the publishers aren’t going to pick a fight with Randazza or anyone else who is Zone Shifting to teach their kids Italian. The lawsuit will be against someone who Zone Shifts to watch 24, or Community, or Avengers: Age of Ultron when it’s not available in their home region.