Declining viewing figures and sport’s fight against piracy

This article was first published in World Sports Advocate on 13 April 2017. 

Ross Sylvester and Rachel Alexander analyse the recent ruling coming out of the High Court in The Football Association Premier League Ltd v. British Telecommunications plc & Ors [2017] EWHC 480 (Ch) in which a blocking order was issued against illegal streaming servers and what this ruling means in the broader context of sport’s fight against piracy.

One of the hot topics since the start of the 2016/17 English Premier League season has been the debate around declining viewing figures. During the first few weeks of the season, reports suggested that Sky’s viewing figures were down 19%. The reason that this has been such a talking point is mainly attributable to the spiralling price of live sports rights – usually one would expect the supply price to decrease in a market where demand seemed to be waning -however, the price of sports rights in the UK continues to rise. Whilst the £5.126 billion paid by Sky and BT in respect of the 2016/17-2018/19 seasons was, in February 2015, prior to any indication that viewing habits may be about to change, only last month it was announced that BT had paid £1.18 billion to retain the exclusive rights to the UEFA Champions League and Europa League until 2021.

This represents a 32% increase and three times the price that Sky and ITV paid for the corresponding rights for the 2012/13- 2014/15 seasons. Many argue that the escalating price of sports media rights in the UK can be put down to the battle for broadband subscriptions rather than a struggle between sports broadcasters for a share of viewing. However, the fall in viewing figures for live sports must be a concern for broadcasters who are breaking the bank for tier one sports rights. This trend is not confined to the UK or, indeed, to UK sports – NFL viewership in the US was down 9% in the regular season and 6% during the play-offs. The decline in ‘traditional broadcasting’ viewing figures has been attributed to a number of factors. Some commentators highlight free-to-air Olympics coverage as an early season distraction; or the shift of millennial viewing to clips and highlights packages accessed via social media. Towards the end of 2016 Ampere Analysis concluded that the decline in viewing figures is more than a shift in viewing habits, arguing that millennials’ declining interest in sport is attributable to online streaming services like Netflix and Amazon. The analysis highlighted the greater amount of alternative content available and the increasing number of ways to consume the same.

One of the ways of viewing sports (and other premium) content is via infringing streams. Traditionally, these were accessed through illegal streaming sites but consumers are increasingly turning to set-top boxes, media players (such as the popular Amazon Fire TV Stick) and mobile apps to access infringing streams. Such devices can connect directly to streaming servers via their IP addresses, which means that traditional blocking orders (targeting websites accessed via web browsers) are not able to prevent the growing majority of infringements.

Background

In 2013, The Football Association Premier League (‘FAPL’) successfully obtained a site blocking order (pursuant to Section 97A of the Copyright, Designs and Patents Act 1988 (‘CDPA’)), requiring the five main retail broadband access providers (‘ISPs’) to impede access by their subscribers to the FirstRow Sports website1. The application made by FAPL on 8 March 2017 (and supported by a number of sports rightsholders including the Bundesliga, La Liga, the FA, ECB and the RFU) was the first to seek a blocking order directed to streaming servers rather than a website.

FAPL’s application was supported by five of the six defendant ISPs (with TalkTalk confirming that it did not oppose the application). That is not wholly surprising when one considers that BT (which owns EE and Plusnet) and Sky are both exclusive licensees of English Premier League footage in the UK; and Virgin Media has wholesale deals with both broadcasters which enables it to retail and transmit the relevant channels to its subscribers. An Order substantially in the terms agreed by the parties was granted by Mr Justice Arnold on 8 March 2017. The Order requires the defendant ISPs to block access to streaming servers which stream live Premier League matches to UK consumers during certain specified periods. The reasons for the grant of the Order are explained in a judgment subsequently delivered on 13 March.

Analysis: The Order

The Order in this case differs from the Section 97A orders previously granted in a number of respects:

  • As noted above, the Order is directed to ‘target servers’ (rather than target websites) and requires the ISPs to block the IP addresses of the notified servers.
  • The Order is described as a ‘live’ blocking order. In essence, this is because the Order only has effect when live Premier League match footage is being broadcast. The implementation of an Order of this kind is made possible by (i) video monitoring technologies used by FAPL, which permit the identification of infringing streams accurately; and (ii) advances in certain of the ISPs’ blocking systems, which enable the blocking and unblocking of IP addresses during the course of a match, in some cases on an automated basis.
  • The Order provides for a slightly different notification procedure under which the ISPs can access the list of IP addresses to be blocked ‘as close to simultaneously as is reasonably practicable.’
  • The list of target servers is to be ‘reset’ each match week during the Premier League season, to ensure that servers which are no longer sources of infringing footage do not continue to be blocked.
  • The Order is for a short period. Like the Order granted in Cartier2, the Order contains a ‘sunset provision.’ However, in this case the Order has effect only until 22 May 2017 (when the 2016/17 Premier League season ends).
  • The Order requires a notice to be sent to each hosting provider each week when one of its IP addresses is subject to blocking.

Jurisdictional requirements and discretion

The law applicable to Section 97A CDPA site blocking orders is reasonably well established and was fully reviewed by both the High Court and the Court of Appeal in Cartier3 in the parallel context of blocking orders directed to counterfeit selling websites made pursuant to s. 37(1) of the Senior Courts Act 1981 and Article 11 of the Enforcement Directive4. Section 97A CDPA provides that the High Court shall ‘have power to grant an injunction against a service provider, where that service provider has actual knowledge of another person using their service to infringe copyright.’ The key requirements are therefore (i) that the defendants are service providers; (ii) that users and/or the operators of the target websites or servers (as the case may be) infringe copyright; (iii) that users and/or the operators of the target websites/servers use the defendants’ services to do that; and (iv) that the defendants have actual knowledge of this. It is well established that broadband access providers are service providers within the meaning of the relevant legislation.

As to the second criterion, Arnold J accepted both that FAPL owned copyright in the works relied on (being films embodying Premier League matches, as well as various logos and graphics) and that the operators and users of the target servers infringe those copyrights in the following ways:

  • Copying by users: In the course of streaming FAPL’s copyright works, copies are made in the memory of the user’s device. In the case of films of Premier League matches, Arnold J considered that a substantial part is very likely to be copied if users stream an appreciable segment of the match. The copying will take place in the UK where the users are located in the UK.

Communication to the public by operators: Arnold J held that the operators of the target servers which stream the FAPL’s copyright works to the public are liable for communication to the public for the following reasons:

  • streaming involves an act of communication of FAPL’s works by electronic transmission to each user who accesses a streaming server during a relevant match period (ITV v. TVCatchup5; Svensson6);
  • the operators of the target servers commit the act of communication because they “intervene deliberately, and in full knowledge of the consequences of their actions, to give access to the Works in circumstances where the users would not in principle be able to enjoy the Works without that intervention” (GS Media7);
  • FAPL’s works are communicated to the public: they are capable of being viewed by an indeterminate number of potential viewers, and are in fact viewed by a large number of users (GS Media);
  • where the original communication of FAPL’s works was by cable or satellite broadcast, streaming will constitute a different technical means requiring separate authorisation from FAPL (ITV v. TVCatchup);
  • even where the source is an internet transmission, the communication is to a “new public” not taken into account by FAPL (or BT or Sky) when they authorised the initial communication to the public of their works in the form of broadcasts and specific transmissions for authorised users of paid streaming services (Svensson). The judge observed that “[g]enerally speaking, the operators of the Target Servers are not merely linking to freely available sources of Premier League footage. Even if in some cases they do, the evidence indicates that they do so for profit […] and thus are presumed to have the requisite knowledge for the communication to be to a new public” (GS Media); and
  • the acts of communication to the public are targeted at the public in the UK.

Authorisation and joint tortfeasorship:

The operators of the target servers authorise copying by their users or, in the alternative, are joint tortfeasors with such users. The judge stated that, as with all Section 97A orders, the Order sought aimed to restrain future infringements of  FAPL’s rights. As to the third and fourth criteria, Arnold J held that the services of the ISPs are clearly “used” to infringe since the ISPs “play an essential role in enabling users to access the Target Servers and thereby obtain copies of [FAPL’s works]”; and that the Defendants had actual knowledge of the use of their services to infringe, including through notices sent by the FAPL and the service of the s. 97A application and supporting evidence. Having considered the threshold conditions, the judge then turned to the issue of discretion, the “overriding question” being “whether the Order is proportionate having regard to the competing rights of those affected by it.” Arnold J held that FAPL and its licensees have a legitimate interest in curtailing the infringement; that the Order would not impair the ISPs’ freedom to carry on business; and that the freedom of internet users to impart or receive information does not extend to copyright infringement. The judge went on to consider other factors (such as the effectiveness and dissuasiveness of the orders, the substitutability of other streaming servers and alternative measures) before concluding that the Order sought should be granted.

Comment

This case demonstrates the importance of advancements in technology to address an ever evolving piracy landscape. It also serves to further highlight the important role that online intermediaries have to play in addressing online infringement. The site blocking jurisdiction in the UK has been advanced incrementally since the first s.97A Order was granted in Newzbin28. Over 160 websites arenow blocked by the major UK ISPs, including copyright infringing torrent sites, streaming sites and Popcorn Time sites, and sites that advertise for sale and sell counterfeit products. The Order now obtained by FAPL signifies how site blocking orders can be further adapted and targeted, in terms of the services to which they are directed; the mechanisms employed to implement the blocking (including automated means); and the timescales within which, and the time periods during which, the blocking measures are applied. It is hoped that the Order will have a marked impact on reducing unlawful access to FAPL’s content in the UK.

Piracy is, of course, a threat to subscriptions and legitimate viewership of all premium content. The principles established by FAPL’s application are applicable to other rightsholders whose content is being similarly infringed. However, the need to address illicit content streams is, perhaps, particularly crucial for sports broadcasting and, in turn, the funding of major UK sports. In its Annual Review of Football Finance 2016, Deloitte reported that broadcast revenues across the ‘big five’ European leagues9 increased by 8% in 2014/15, and at €5.8 billion represented 48% of total revenues. Given the heavy reliance on broadcast revenue as a source of income, it is crucial that the relevant rightsholders are in a position to effectively tackle piracy to preserve value in the rights cycles.

For so long as they are exclusive licensees, the likes of Sky and BT have a vested interest in supporting and complying with such interventions; but should the problem of pirate operations spiral out of control, an impact on the price which broadcasters are willing to pay for sports rights (particularly in a climate of declining viewing figures) may well be seen.

  1. The Football Association Premier League Ltd v. British Sky Broadcasting Ltd & Ors [2013] EWHC 2058 (Ch).
  2. Cartier International &Ors v. BskyB & Ors [2014] EWHC 3354 (Ch).
  3. Cartier International &Ors v. BSkyB & Ors [2014] EWHC 3354 (Ch); [2016] EWCA Civ 658.
  4. Directive 2004/48/EC of 29 April 2004 on the enforcement of intellectual property rights.
  5. Case C-607/11 ITV broadcasting Ltd v. TVCatchup Ltd.
  6. Case C-466/12 Svensson v. Retriever Sverige AB.
  7. Case C-160/15 GS Media BV v.Sanoma Media Netherland BV.
  8. Twentieth Century Fox & Ors v.BT [2011] EWHC 1981 (Ch).
  9. England, Spain, Germany, Italy and France.