UFC Sues UStream and Justin.TV Over Live Streaming Copyright Infringement

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Copyright infringement is still one of the biggest headaches that video hosting sites deal with on a regular basis–you might have heard about a long legal battle that YouTube spent millions to win.  Most video portals, like YouTube, have gone to great lengths to demonstrate a willingness and ability to help fight copyright infringement by their users.  YouTube’s ContentID, for example, is an automated system that monitors uploaded videos for protected content and notifies the rights holder of possible infractions.

But sites that offer live streaming video services, such as Justin.TV, UStream, and Livestream (among others), have yet to face a serious challenge in the area of copyright.  That’s because they’re not really offering the same kind of product.  These are not YouTube videos that sit in server storage indefinitely, waiting for the next viewer.  Rather, these are live events that typically air once and then never again (unless someone creates a screen capture video of the broadcast).  It’s more difficult to find evidence of copyright infringement on live streaming videos because, as their name implies, they are live… gone forever once they’re viewed.

But copyright infringement still goes on with live streaming video communities, maybe more than we realized.  And now they’re facing their first legal challenge–well, two of them are.  UFC, the Ultimate Fighting Championships, a mixed-martial-arts association, has sued UStream and Justin.TV.  You may remember Livestream’s announcement in March that they had a zero-tolerance policy for copyrighted content, in which they called out their competitors.  You may also notice that Livestream is not being sued by UFC alongside those competitors.  Probably not a coincidence.

UFC is claiming that users of the Justin.TV and UStream services have streamed UFC pay-per-view events to thousands of viewers, costing the fighting league revenue.  The lawsuit is seeking the IP addresses of those users who made the protected content available to others.  So they’re going after the distributors, not the viewers, which makes sense.

UFC events are typically pay-per-view, and cost each viewer something near $50.  They usually have roughly a million viewers–that’s $50,000,000 for those of you averse to math.  That’s a lot of money.

And the league claims that  36,000 people watched illegal live streams of their UFC 108 event in January, while another 78,000 watched UFC 110 on live streaming sites.  So, while it might be tempting to view UFC as rich jerks going after a few lost viewers, the math shows that this is serious money we’re talking about.  78,000 viewers times $50 a pop is nearly $4 Million.  That’s nearly 10% of both their actual audience and earnings.

It’s curious to me that UFC fans would actually choose to watch the event on a site like Justin.TV.  The quality of the picture has to be substandard compared to watching the event legally on a high-definition television.  However, in a troubled economy, people are probably more willing to lower their moral standards in the name of saving money.  And apparently some UFC fans would rather watch a lower-quality version of the event live than the high-quality version that inevitably airs on cable for free.

It’s also curious to me that the UFC is the first one to file a lawsuit like this.  There’s a lot of variety in the copyrighted content you can catch streaming live on sites like this.  Of course, it’s not all pay-per-view, and the money alone has to be the main motivation for UFC.  But I wonder if there’s not something shared between the demographic of UFC and the demographic of online video sites (especially live streaming) that helps account for why the MMA league’s content is so popular in this illegal format.  Meaning… UFC appeals mostly to males ages 15-35 I would guess, and that probably overlaps nicely with the target market for live streaming video sites.

We’ve talked a lot lately about live streaming video, particularly YouTube’s possible entry into that market. In fact, this kind of lawsuit is one reason that’s been tossed out for why Google might choose not to dabble in live-streaming video.

I’m not a legal expert.  I’m hoping there’s one out there that can weigh in who might know more about the intricacies of the law in this situation.  But I would assume this lawsuit is similar enough to the Viacom/YouTube one that a similar defense might be used… or a similar outcome reached.  Is YouTube responsible for what their users upload?  To a degree, yes.  But they’ve demonstrated enough to the court’s liking that they are actively trying to find and remove illegal videos.

So the big question is, can Justin.TV or UStream demonstrate the same kind of proactive approach is being followed?  I have no idea.  But it’s going to be interesting to see.  Will they turn over the IP addresses of their users–something a lot of companies, mostly cable providers, have shown a reluctance to do?  Even if the existence of this lawsuit doesn’t keep YouTube from wading into the live-streaming waters, it will definitely inform their strategy in protecting against copyright violations, which makes this story one worth watching closely.


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