(by Peter Hirtle)
One of the things that Napster taught us is that just because it is easy to do something, it is not always legal.
There is a recent post that has been getting some buzz. In “Using Netflix at an Academic Library,” Rebecca Fitzgerald describes how Concordia College uses a Netflix subscription to supply movies to students. She reports that using Netflix subscriptions has been a great success, saving the library over $3,000 so far by substituting film purchases and licensing with Netflix rentals and instant play.
The program appears to be popular with the students and saves the college money. It is easy - but is it legal? I don’t see how.
Here is the problem: As one of the commentators on her post notes, when you sign up with Netflix you enter into a binding contract with them. The terms of that contract specify that “our DVD rental service and the content on the Netflix website, including content viewed through our instant watching functionality, are for your personal and non-commercial use only and we grant you a limited license to access the Netflix website for that purpose” (emphasis mine). As far as the instant play service of Netflix, its end user license stipulates that Netflix grants the licensee “a non-exclusive, limited, personal and nontransferable license, subject to and conditioned on your compliance with the restrictions set forth in this License Agreement, to install and use the Software.” To whom does this apply? Netflix stipulates that the licensee includes “members of your immediate household for whom you will be responsible hereunder and users of the personal computer or Netflix ready device with which you are accessing the Netflix Service and for whom you will be responsible.”
I don't see how a library subscription to Netflix could be considered to be “personal” – not when the purpose of the subscription is to lend the movies to others, rather than watch them yourself (as if a library could even watch a movie.) Nor can authorized users of a library be considered to be “members of your immediate household,” nor could library workstations be considered to be “personal computers.” I am not even sure that we could consider Concordia’s use to be non-commercial, since its purpose is to avoid paying purchase, rental, and licensing fees – and avoiding purchasing an item has at times been considered to be “commercial.”
It looks to this non-lawyer like Concordia may not be complying with the terms of the license. As a general rule, I think libraries should respect the terms of the contracts they enter into. If you don’t like a license, regardless of whether it is the license that accompanies an e-book reader or a Netflix subscription, try to change it. (At least one recent article suggests that we should be trying to negotiate different terms so that Netflix subscriptions can be used in higher education.)
Of course, one can also ask how much risk does Concordia College face because of the library’s actions. In reality, the answer is probably "not much." Fitzgerald reports that to date “There have been no legal repurcussions (sic) involving our Netflix accounts.” If Netflix found out about Concordia’s program and objected, it is most likely that it would simply cancel the library’s membership rather than also bring legal action. I am a little more worried, though, about the possible response of copyright owners. Movies that have been secured via Netflix in violation of the license agreement between Netflix and the end user (or that are used in ways that Netflix has not licensed) are no more legal than pulling the movie off of BitTorrent. A copyright owner could theoretically sue Concordia College for willful copyright infringement (distribution, in this case), which carries with it a $150,000 fine per infringed movie. Until recently, however, suing schools and libraries was considered poor form, and so the risk of a lawsuit is likely still small.
Given the potential high risks that a Netflix lending program entails, though, I would only enter into such a program with the full support of my institution’s legal department. I hope that Fitzgerald considers posting Concordia’s counsel’s legal assessment of the risks and benefits of the program. (And let me credit Fitzgerald’s piece for at least raising the issue, something that a Library Trends article that she cites in her post fails to do.)
Is there any way a library can utilize Netflix in its collection development? Certainly negotiating with Netflix for different terms would be a start (though it would not surprise me if Netflix’s agreement with the film distributors might actually prohibit anything but personal, non-commercial use). A library could also consider buying individual memberships in Netflix for all of the students. But until I see a legal justification for a Netflix borrowing program, I think this has to go into the “easy – but not legal” category.
Image from dolphinsdock, http://www.flickr.com/photos/66568868@N00/3078317546/, licensed CC-BY-NC-ND.