Quarantine & Chill: Why streaming services are one to watch

Nikkie Kitching
May 31, 2020
9 min read

Updated: Jun 4, 2020

So, we’re all in lockdown. Cinemas have closed. Chances are you’ve binge watched five series, two films and that trending documentary everybody’s been talking about. Hell, even your grandmother has been binge watching "The Crown". Whichever generation you fall under, you’re practically spoilt for choice. A confection of content for all ages.

Streaming services like Netflix, Amazon Prime and Disney+ house some of the best movies, television series and documentaries. Whilst it may seem that streaming content has become our saviour in troubling times, it does raise some interesting legal aspects that many may not see behind the scenes (pun intended).

Licensing and copyright

Before Netflix, Amazon Prime or any other streaming service can add a certain movie or television series to their collection, they will need to acquire permission from the owner who created the content. In this case, it would be a film studio or production company. This permission will come in the form of a document known as a 'licence'. Under general copyright law, if you own the copyright to a movie or series, you can license the use of your work and decide how your work can be used. In this context, once permission is granted, the streaming service will pay royalties to the owner in exchange for the right to use the product. A royalty is essentially a payment made by one party to another party that owns a particular asset, for the right to ongoing use of that asset. In the case of companies like Netflix, Amazon Prime and Disney+, they must abide by the rules set out in any licensing agreement they enter into.

Before Netflix exploded onto the scene, they smartly approached huge media companies such as Paramount Pictures, 21st Century Fox and Lionsgate. The most recent streaming service to join the big leagues is Disney+ which was launched in the US, Canada and the Netherlands last November. In the same vein, Disney+ affiliated itself with the likes of Marvel, Discovery Channel and Pixar. To understand the relationship between a streaming service and a media company a little better, let's use the series "Modern Family" as an example. Modern Family is produced and distributed by 21st Century Fox but has been known to air on both ABC and Netflix. This means that ABC and Netflix have licensing contracts in place with 21st Century Fox.

A licensing agreement will include a timeframe in which the content is to be used and any renewal dates that apply. If a streaming service is lucky, they may have a license that lasts into perpetuity which means the title can be used indefinitely and has no end date. Others will have a date where the license ends, in which case, will need renewing. If you’ve ever wondered why a movie or TV series disappears, it means that the licensing agreement the service has with the content provider has ended. The service can then choose whether to renew this or not. For those wishing to engage with a film studio, producer, distributor or filmmaker can also base their use of copyright on an implied license; essentially where there is nothing in writing. However, it is always good practice to ensure licenses are exclusive and recorded.

Whilst licensing is at the core of streaming service agreements, this doesn’t necessarily mean that they can get a license for any movie or documentary they fancy. Netflix, for example, looks at a specific criteria to help them decide whether the movie or show should be renewed. This include whether the rights to renew are available, the overall popularity of the movie or show and any other factors related to season or locality. For example, the long-standing sitcom 'Friends' has been on Netflix for a long time, meaning that it was renewed on a basis of its popularity and streams.

On an international scale, when companies like Netflix approach film studios and filmmakers, they must ensure that the specific agreements they enter into are compliant with each jurisdictions’ copyright laws. Naturally, licensing differs between jurisdictions. Within some licensing agreements, there may be sub-agreements, for example a non-disclosure agreement or confidentiality clause. If we apply this to Netflix, there could be an upcoming series which has never been seen before and the content owner wants to protect their idea. In this case, they may ask Netflix to further sign an NDA so as not to use or exploit the idea before it is streamed to the public.

Furthermore, what makes Netflix and Amazon Prime stand out from the crowd is that they incorporate original titles. You might have heard the term "Netflix Original". When some people hear this phrase, they believe that Netflix had created the title. However, "original" in this context means that Netflix has either commissioned and produced the show, has international streaming rights or has co-produced the show with another network. Famous examples of Netflix Originals include House of Cards, The Crown and Stranger Things. When Netflix co-produces content, this gives them a bigger degree of control, particularly with intellectual property rights. They will, of course, need to pay an additional fee.

Geo-blocking and censorship

When it comes to content we can view from home, services like Amazon Prime and Netflix incorporate what is called geo-blocking. This essentially restricts each jurisdiction to certain content that can be viewed based on your location. For example, if you were based in the UK, the Netflix content you watch will be quite different to the Netflix content your friend watches in the US. The same can be said if you happen to be sharing your Netflix with other users who are based in different jurisdictions. This can also be seen with some videos on Youtube which prompt you with the message "The uploader has not made the video available in your country". The way they do know this is because the streaming service gains automatic access to your specific IP address when you sign up from your computer or device.

In 2018, the EU declared under regulation 2018/302 that websites using geo-blocking technology will be illegal for most online content i.e. shopping, car rentals, etc. What this means is that websites are not allowed to display different content to people in different European countries unless there is a meaningful reason behind doing so. However, the rules state that "services linked to copyright-protected content or works in an intangible form" will not apply. In this case, streaming services like Netflix fall under this category and they are exempt.

As Netflix plans to go global, they need to be careful with regions where their service is not yet available, for example in China and Syria. Many users living in these countries have tried to beat the system by using VPN’s and codes. A VPN essentially hides your IP address and location and gives the user access to titles. Globally, there is a bit of a grey area as to whether or not bypassing geo-blocking is illegal. While you will not be smacked with a fine if you were to bypass geo-blocking, companies like Netflix and Disney+ do consider this a violation of their terms of service. It would be best practice to not circumvent their systems.

Geo-blocking also plays a significant role in protecting copyright. To eliminate geo-blocking entirely would mean that any person in any jurisdiction could have access to new content and create similar content and concepts. To do so could also have a significant impact on film companies who perhaps only wanted to grant territorially limited licenses which are licenses for their particular region. This is the same for big producers who perhaps only want to launch movies in one country at a time. If there was no geo-blocking it would mean that other film producers and distributors could copy ideas freely.

On the other hand, there is some content that cannot be shown as it may violate censorship laws. Censorship has also played a huge role in how streaming services operate. At the demand of different governments around the world, a number of titles have been taken down by Netflix and Amazon Prime as they do not comply with the government's censorship laws.

Saudi Arabia, for example, had requested an episode of the Patriot Act with Hasan Minhaj to be taken down. Minhaj, the host of the show, had criticised the Crown Prince of Saudi, Mohammad bin Salam, and speculated that he had involvement in the murder of Jamal Khashoggi, a columnist who worked at the Washington Post. The government had stated that it violated Article 6 of Saudi Arabia's Anti-Cyber Crime Law which states that "the preparation, publication, and promotion of material for pornographic or gambling sites which violates public morals" is a cyber crime which is subject to imprisonment. This was subsequently removed from the Netflix service in Saudi Arabia. Netflix described this as a "valid legal request". Other titles to be taken down in the past few years include "The Last Temptation of Christ" in Singapore and "The Bridge" in New Zealand. Both dealt with sensitive topics like religion and suicide.

Data protection and data hacking

Regular television has been replaced with new streaming services where we can pick and choose what we want to watch and when we want to watch it. With this comes the idea that streaming companies are able to collect information as to what is popular and what is not.

Companies like Netflix and Disney+ are great at identifying what their viewers want to watch. With hundreds of millions people signed up to Netflix alone, this gives you an idea as to the magnitude of data they collect. They incorporate the use of analytics which gains insight into a subscriber’s preferences. What do our viewers like watching? Is there a series that is gaining popularity? What would happen if this series disappeared?

As soon as you sign up to a streaming service, they are able to keep a record of your name, email address, payment details and telephone number. Other information that is collected automatically when you sign up includes which device you stream on, whether this be a smart TV or iPad and your IP address details. Streaming services have a duty to protect this information in accordance with various data laws, for example, abiding by the GDPR and Data Protection Act 2018 in the UK.

Unfortunately, the arrival of Covid-19 has seen a spike in data hacking and malicious activity. In April of this year, Mimecast, a company that specialises in cybersecurity, identified hundreds of websites that were mimicking Netflix and Disney+'s website. New subscribers started seeing websites that looked authentic and were almost a mirror of the original website. Where the hackers fell through was when they offered free accounts to new users so that they could harvest personal data. Disney had originally thought the server had crashed due to Disney+ high demand of subscribers or other tech related issues.

In cases like these, customers often point fingers at the provider of the streaming services when they are hacked. However, at times this is not the fault of the company themselves but rather a hacker on the outside looking for an opportunity. This raises the question of why hackers would want to steal your information. For some, it is an attempt to steal credit card information. For others, it is a case of using other people's accounts for the sake of not paying for the service, particularly targeting email passwords which are fairly short and simple.

Final thoughts

It is undeniable that streaming services represent the best in television and movies. The competition is high with the likes of Netflix, Amazon and Disney+. Emphasis should also be placed on their excellent marketing, especially with ads that use the words “Only available on this platform” and “You can’t find this programme anywhere else”.

A lot of work goes on behind the scenes to ensure the content that is put out there is both relevant, appropriate and entertaining. It is clear that series such as Friends and Brooklyn 99 are proof that some license agreements are worth their weight in gold. Governments also play their part in ensuring that any content that goes against their censorship laws are flagged.

As to what we can expect going into the future, issues may arise when there are a lot of choices to choose from as companies are beginning to set up their own streaming services. With the uncertainty surrounding Covid-19, there are questions as to what will happen to films and series that are yet to be released. Certainly, the virus has caused a financial strain in terms of movie production. Some titles are in the process of moving to online streaming. However, more anticipated movies such as Disney's live-action Mulan, James Bond's "No Time To Die" and Fast and the Furious 9 will delay their releases to 2021. In more recent news, there have been rumours circulating about Amazon looking to acquire AMC, the largest movie theatre chain in the world. As with other major chains, AMC took a financial hit with a debt of $4.9 bn (equivalent to £3.9 bn). This, however, is yet to be confirmed.

This is not to say that we will be bidding adieu to normal television forever but it is clear that the public are turning their attention to streaming services as they are cheaper and offer a better variety of content. Furthermore, cinemas will remain in good standing post Covid-19 as many people enjoy the prospect of going to the movies and consider it a fond past time.

For more information on streaming services and the various legal aspects, check out the following links:

Quarantine & Chill: Why streaming services are one to watch

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