Struggle with Olympics Pirates Should Not Bring New Regulations

Published October 10, 2008

Holding the U.S. broadcast rights to the Beijing Olympics, NBC waged an aggressive campaign to thwart Americans who attempted to use the Internet to circumvent its monopoly.

The conflict exposed weaknesses in the current international intellectual property situation, but new laws won’t fix the problem, industry analysts say.

The network announced American viewers were evading the broadcaster’s exclusive rights as soon as the Games started on August 8. NBC’s lawyers contacted video download Web sites, including YouTube, to request immediate removal of clips of the Olympic opening ceremonies.

The company’s fight against Internet circumvention of its broadcasting rights was set against the backdrop of its own effort to increase online coverage of the Olympics.

NBC offered just two hours of Internet coverage during the 2006 Winter Olympics in Torino, Italy, whereas an estimated 2,000 hours of live online coverage from Beijing was offered by the current Games’ close. The network invested $894 million to secure the rights and implement the technical infrastructure necessary for this breadth of coverage.

Despite NBC’s efforts, computer-savvy viewers in the United States visited sites offering live or early viewing of Olympic events prior to NBC’s broadcasts.

Business Models Changing

The struggle between NBC and some viewers over online coverage of the Olympics raised questions about the applicability of intellectual property laws on a global scale.

Professor Michael Risch of the West Virginia University School of Law said he “wouldn’t call these concepts [of content exclusivity] in IP [intellectual property] law outdated. … NBC paid good money for the exclusive right to broadcast … an extremely creative event” that was funded in part by the network’s advertising dollars.

Fred von Lohmann of the Electronic Frontier Foundation (EFF) believes the Internet should force companies like NBC to change the way they do business. “The geographic exclusivity that the Olympics have employed in the past is not likely to survive … where the Internet is able to move video cheaply from person to person,” he said.

“The business models will adapt to the technology, not the other way around,” von Lohmann said, noting NBC had not demonstrated meaningful harm as a result of viewers’ efforts to circumvent its exclusive rights to Olympic broadcast content.

Conflicting Claims

“The fans will always be able to get what they want” as Internet technology advances, von Lohmann said.

“It is not for big media companies or the IOC [International Olympic Committee] to lecture fans about what they ‘should’ do,” von Lohmann continued. “Media companies and the IOC should be learning from this experience and working to deliver what the audience is demanding.”

Risch, however, argues it’s important to protect content providers’ investments. “If viewers are unhappy with blocked access, they have a choice to fly to China or some other country to watch it,” he said. “[I do not] see individual viewers paying what NBC or its advertisers are paying to bring the ceremonies to TV for free.”

However, Risch doubts the illegal video downloads had much effect on NBC, saying he “suspected only a small percentage of actual viewers bypassed the television to watch the event in another language or on the computer.”

Professor Sheri Engelken of Gonzaga University said viewers on YouTube aren’t doing anything wrong, because they “haven’t engaged in any of the exclusive activities that copyright grants to NBC.” She said, “NBC has no legal ability to prevent you or me from visiting foreign Web sites and watching what’s available there.”

Law’s Effectiveness Limited

The experts interviewed for this story all say additional legislation would not prevent similar infringement in future Olympic broadcasts.

“There is likely little role for legislation or [additional] enforcement here,” Risch said. He said he believes the only solution to future infringement on an international scale would be to “block or [make] more expensive [such] alternative means of obtaining the broadcasts.”

Von Lohmann cited the malleability of the marketplace in responding to rumors of potential legislative intervention, saying, “Markets and businesses tend to be far more flexible and responsive to new technologies than legislators.”

As a result, von Lohmann says, it’s “hard to imagine lawmakers, many of whom are just becoming familiar with YouTube, being able to sort this out quickly enough.”

Nicholas Katers ([email protected]) writes from Franklin, Wisconsin.