In the wake of the Federal Court ruling that Optus' TV-recording app TV Now infringes on copyright, at least two similar cloud-based recording services have been suspended.
Optus TV Now allowed customers to use Optus' storage cloud to schedule, record and play back 15 channels of free-to-air digital TV from a 3G mobile or PC. Optus argued that this act was legal because of provisions in the Copyright Act designed to let individuals record TV to watch at a time more convenient to them; however, last month, the full bench of the Federal Court upheld complaints made by the National Rugby League (NRL), the Australian Football League (AFL) and Telstra that the recordings of football broadcasts are not covered by the provisions, because it is Optus, or Optus and the customer jointly, making those recordings.
While Justices Arthur Emmett, Annabelle Bennett and Paul Finn pointed out in their judgment that this ruling was limited to the Optus TV Now app, and not other TV-recording or cloud-based storage services, two similar services based in Australia — Beem and MyTVR — have been suspended as a result of the ruling.
Beem, a TV-recording cloud service that allows playback on phones and tablets, lashed out at the ruling on its website, saying that its customers' rights had been "diminished", and that the company had believed its service to be covered by the provisions in the Copyright Act.
"When we launched the Beem PVR service, we, as well as our (very expensive) legal advisers were confident it was within the law as it stood. However, the Australian Federal Court has decided otherwise."
Beem said that content rights owners are "scared" of cloud-based recording services in the same way that they were once scared of the VCR.
"They consider any advancement in technology that makes life easier for consumers as 'theft'. It wasn't that long ago that the movie industry declared that the humble in-home VCR would spell the end of the Hollywood blockbuster. Amazingly, they were so scared of technological progress, they compared the VCR to the Boston Strangler. Fast-forward to the same backward thinking happening all over again today, despite the fact that the VCR kick started the home entertainment market in the US, which is now worth $20 billion a year."
The AFL, which was concerned that its $153 million deal with Telstra for exclusive mobile-broadcasting rights for matches was in danger from the TV Now app, was mistaken, Beem said, because recording broadcasts is different to mobile broadcasting.
"A cloud PVR service records a television broadcast, advertising and all — in theory, meaning more people are watching a television broadcast, including the associated advertising, just at a different time. This would logically mean the NRL and AFL could charge television networks more money for their television broadcast rights, due to an increase in viewership."
This is a similar argument to that made by Optus CEO Paul O'Sullivan in announcing the company's intentions to appeal the case to the High Court of Australia. O'Sullivan said that Optus has paid for a lot of TV advertising, and, if it is forced to pay again to license the TV Now recordings, it would amount to paying twice.
As a result of the court's decision that Optus had a role in "making" the TV recordings using TV Now, Beem said that it could also be argued by the same logic that Apple and Telstra "make" a phone call on an iPhone, and would therefore be liable for any criminal activity made over a phone. Beem said that the ruling is a "setback" for technological innovation, and that the company hopes common sense prevails if the case reaches the High Court.
MyTVR is a web-based TV-recording service that lets customers record and play free-to-air TV from Sydney and Melbourne TV stations on PCs, Macs, iPhones, iPod Touches and some Nokia devices. While suspending its service, the company said that it had pioneered cloud-based TV recording in Australia in 2009.
"Through our own trials and tribulations, we pushed the boundaries of innovation, online video and pioneered the cloud-based PVR space within Australia. We thank all of our customers who were a part of breaking new grounds in technological innovation within Australia," the company said on its website.
MyTVR has offered refunds to customers who paid for yearly subscriptions, and the company said it will come back online depending on the outcome of the TV Now case.
Optus has also suspended its TV Now service, and O'Sullivan indicated earlier this month that the ruling would have an impact on all cloud-storage services.
"We think it has ramifications for all cloud storage. The issues here are about giving Australians confidence that you can take the best advantage of cloud storage in all forms, not just TV Now. It is such a fundamental issue ... we're dealing with new technology, and it's an area where the law is having to evolve."
After lobbying from the sporting codes when Optus won the first round of the court battle, the Federal Government tasked the Australian Law Reform Commission (ALRC) with looking at the time-shifting provisions within the Copyright Act. While it is unlikely that the High Court will hear the case very soon, the ALRC has until November 2013 to report back to the government.