College Libraries Save Money By Ignoring Netflix Terms Of Use

Plenty of Americans have cut their household entertainment budgets by subscribing to Netflix instead of seeing movies in theaters or purchasing DVDs. Now, some college libraries are doing the same thing, sort of. They’re using rented DVDs or streaming video instead of purchasing the movies that professors assign. Is this a violation of Netflix’s terms of use? Yes. But the librarians don’t particularly care, and Netflix doesn’t seem to, either. Yet. As a Netflix spokesman said, “We just don’t want to be pursuing libraries.”

One librarian at a small college experimenting with using Netflix blogged:

Our library has a very limited budget when it comes to film purchasing, especially popular titles. Netflix has saved us an enormous amount of money (around $3,000) by allowing the physical rentals as well as instant play. The streaming movies have been a great success; instead of students waiting for the one DVD on reserve, they can go to the computer or into the library’s film viewing room, where we have a Roku player set up, and watch the movies on our flat screen TV. The amount we save just having the instant play is significant; it’s almost like having multiple copies of the movie on reserve.

Handy. But is it permitted, when Netflix subscribers promise that they will use the service only for personal use? Another librarian told the Chronicle of Higher Education that she hasn’t pretended that the subscription isn’t for library use, and the account is in the library’s name.

“They certainly know that universities are using their service… They have their licensure for a variety of legal reasons. I don’t think that they mean it as a strict prohibition against using their materials for face-to-face teaching.”

Academic Libraries Add Netflix Subscriptions [Chronicle of Higher Education]
Using Netflix at an Academic Library [Tame The Web]

Comments

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  1. deejmer says:

    How dare an American company be reasonable like this?! Humph. Didn’t they get the memo about exploiting every single customer for everything they are worth?

  2. cparker says:

    I think the libraries have to worry more about whether or not the RIAA considers this a public performance. And we all know how measured and reasonable the RIAA is.

    • EarlNowak says:

      MPAA. different evil organization.

      • kriswone says:

        Perhaps more evil, not sure but i think more profit is made from movies than music.

        • dpeters11 says:

          You’re forgetting Hollywood accounting. Harry Potter and the Order of the Phoenix “lost” $167 million, mostly due to WB paying itself distribution fees, interest etc on just under a billion dollars in revenue.

      • Moosehawk says:

        Wait now, he may be on to something. The RIAA might be worried that the students are watching movies with copyrighted music in it at a reduced cost. And maybe they’re not even watching the movies, but just fast forwarding to different parts of different movies just to hear specific songs. Yea, that’s it.

      • Billy says:

        Public performance is a copyright issue with movies (MPAA) as well.

  3. GuJiaXian says:

    So long as Netflix is good with it, is this even an issue? I’m a Netflix subscriber, and I have to say that the few times I’ve called their customer service (including once that I was, well, less than polite with them) they’ve always been receptive, understanding, and willing to make amends–it’s clear they value me as a customer. Oh, and their customer service reps speak English as their native language, which is a big plus in my book.

    • Brontide says:

      The issue may not be with Netflix but the companies that grant Netflix licenses. Without the content at favorable prices Netflix would not exist. All it would take is one or two of the big names to put some pressure on them to close the loophole.

      Right now it’s probably not worth it for any of the parties to pursue it, but if this becomes common it will eventually be too big a target to pass up.

      • GuJiaXian says:

        That’s very true. Still, if that’s the case, the fact that Netflix is willing to “stick it to the man” all for their customers is a very good thing.

  4. pop top says:

    This would be a perfect time for Netflix to create a “business subscription” with a special ToS to protect them from any lawsuits. It could also give the businesses something crazy like 30 or 50 discs out at a time per month, something that a regular subscriber wouldn’t need. But seriously, kudos to Netflix for not wanting to prosecute libraries.

    • EarlNowak says:

      It’d be hard, at least for streaming- they’d have to renegotiate the license for every movie. For disc rentals it would be straightforward though.

      • pop top says:

        Then maybe the professors should pay for their own subscriptions so they can get Instant Streaming separate from the library’s account.

    • Brunette Bookworm says:

      Or an “educational” license for the schools. I think that most of the film companies would be reasonable in allowing schools to use the discs or streaming feature just inside classrooms.

      • MaxH42 thinks RecordStoreToughGuy got a raw deal says:

        I wish it were so, but the licensing agents (which are usually not the film companies, but discrete agents even for sequels in the same series, or a director’s cut and theatrical release of the same movie) are not interested in helping anyone. Their sole reason for existence is 1) maintain their ownership of the content, and 2) maximize profits. Giving it away violates both of those.

  5. kriswone says:

    Wondering if leaving my curtains open in my open window opposite my TV is considered a public performance, especially when i have my 5.1 turned up.

  6. tasselhoff76 says:

    See, Steve Jobs would have just said, “We’re not in the business of helping libraries. Leave us alone.”

  7. dulcinea47 says:

    I’m not sure if this is okay or not… I work in a university library, and I know we would never do this. If a professor rents a movie on their own to show a class, though, we wouldn’t even know about it. And it’s perfectly fine to check out a movie from the library and show it to a class… I think it falls under Fair Use for education.

    • Billy says:

      As far as copyright law it would probably fall under fair use. But this isn’t really about copyright law. it’s about the TOS. The TOS can be more restrictive than copyright law.

  8. Bill610 says:

    For those who are concerned with the copyright issues as opposed to the user agreement with Netflix, if the way in which the library is making the videos available doesn’t fall under fair use, perhaps someone will (or has!) come up with a solution similar to what churches do. There’s an organization called CVLI which has negotiated licensing agreements with most major film companies. Churches pay an annual licensing fee, the film companies are paid out of that pool of money, and the churches who subscribe then have the right to show clips and full movies, as long as they aren’t charging admission.

    • raydee wandered off on a tangent and got lost says:

      I guess they should not get too ah … pushy when it comes to tithing. I briefly attended a Catholic church that sent the collection plate around twice per service.

    • The Cynical Librarian says:

      Libraries can also get away with it by just paying for this service:
      http://www.movlic.com/library/
      It’s pretty simple you can pay per movie shown or a whole year license (which is based on your population served.

      It kind of bothers me that a library would completely thumb it’s nose at copyright just to save a few bucks. However you feel about intellectual property, it’s not really in the best interest for each library to decide what is and isn’t ok to do based on their bottom line.
      I’m glad Netflix isn’t pursuing lawsuits, but at the same time I cringe for those libraries talking about how wonderful it is that they’re saving money. Yes and we could also save money on our music collection by installing limewire on the computers or buying a single copy of an album and just making burned copies to check out to patrons, but we’re not.
      /rant

      • Bill610 says:

        Cool! I thought someone might have set up something like that for libraries. For churches, it’s based on the congregation size as opposed to the size of the community, in the case of the library model.

        Unless I missed something, there’s nothing in the article which would indicate that this particular library does NOT have a licensing arrangement like http://www.movlic.com/library/. That license appears to have nothing to do with how the movies are acquired. If that’s the case, then if they held such a license, there would be no copyright issues involved with showing a movie obtained through Netflix, just the issue of the agreement with Netflix itself. Which takes us back to the beginning of the discussion.

        • The Cynical Librarian says:

          I think you’re correct in that, according to their FAQs, once it’s in your possession in a legal manner, you can show it. But, as you said it takes us back to the beginning where, I can’t find it in my heart to agree with this library.
          It does bear mentioning that I can almost guarantee most libraries would be all about it if Netflix would institute an “institutional license” for streaming content.
          Then all you’d need to worry about is someone trying to watch “9 Songs” or “Shortbus”* at a public Internet terminal.
          *Nothing against those movies, it’s just the public display of nudity that may run you into problems.

  9. parv says:

    Not quoted in OP are the words of Steve Swasey (Netflix VP of corporate communications) which go with the not-pursing part (3d paragraph at http://chronicle.com/blogPost/Academic-Libraries-Add-Netflix/27018/) …

    The company knows that its service is being used by librarians, but so far it has not taken legal action to stop them. “We just don’t want to be pursuing libraries,” Mr. Swasey said. “We appreciate libraries and we value them, but we expect that they follow the terms of agreement.”

    • parv says:

      Oh, need to copy-paste the link for the Consumerist link parser considered “)” as part of the link. Or, just use the link in OP.

  10. Mr. Pottersquash says:

    I remember in Canada a Judge once in a ruling on a copy right case something to the effect that no holder of a copyright/license can truly claim to restrict all unauthorized copying when ever public library everywhere has a copy machine that anyone can use, normally unsupervised to make w/e copies they need, and that concievably, a person could make a copy of an entire book and just walk out.

    We should just pass special exceptions for Libraries and say if your a non-profit enitity which purpose is to collect and display various works for an informative purpose, as long as you charge nothing to those seeking the information and you make nothing from providing it, intellectual property law does not apply. users of the library could be held liable just not the library, it would be considered a good-faith publisher. Oooo library would also have to set and maintain clear limits to duration of use and WOULD be liable if it failed to follow/pursue its own policies.

    • HogwartsProfessor says:

      I agree with an exception. They’re not charging for it; the students are viewing it for homework. They’re not making copies. It’s not really different from students checking out a book and reading it. Books are copyrighted too. Are they going to go after the books next?

      And if it violates public performance rules, then theoretically professors wouldn’t be able to show a film they rented from their personal Netflix account in class either. Unless they show the same movie every year in their curriculum, it’s not economical for them to buy movies all the time.

    • Billy says:

      But the issue here is the Netflix TOS. Even if the library’s use doesn’t violate copyright law, that doesn’t mean that it doesn’t violate the Netflix TOS.

  11. Phineas says:

    Wait, I think we are missing the point of this article:
    They have money for a flat screen TV?

    • dork says:

      Have you looked for TV’s recently? Flat screen LCDs are everywhere and cheap. You would probably pay more for a CRT HDTV now, and boxes that stream content easily probably only have HD outputs, so older SDTV’s can’t be used easily.

    • delicatedisarray says:

      I work at a University Library- former students will often donate things like flat screen tvs. It’s how we ended up with the two at the front of our building. When someone donates money to an organization and specifies what the money is for you have to purchase that item, doesn’t matter if it’s something you need.

    • pecan 3.14159265 says:

      Like dork said, flat screen TVs are pretty cheap and are useful for small groups. It used to be standard def TVs and it’s not so different now.

  12. edicius is an acquired taste says:

    This is why I’m glad that the video collection on my campus got taken out of my department and is under the jurisdiction of the library. I had enough problem dealing with copyright violations when faculty would try and get me to make copies of videos. This would just be a nightmare.

    However, I will say that Netflix is a great resource for the film classes on campus, but I admit it still is kind of a gray area re: the whole public performance thing. I know that a number of years ago, a faculty member had recorded something off TV, a 60 Minutes report or something like that. Apparently, the father of a student in the class worked for CBS, heard about it…and tried to take legal action.

  13. Mr. Pottersquash says:

    I remember in Canada a Judge once in a ruling on a copy right case something to the effect that no holder of a copyright/license can truly claim to restrict all unauthorized copying when ever public library everywhere has a copy machine that anyone can use, normally unsupervised to make w/e copies they need, and that concievably, a person could make a copy of an entire book and just walk out.

    We should just pass special exceptions for Libraries and say if your a non-profit enitity which purpose is to collect and display various works for an informative purpose, as long as you charge nothing to those seeking the information and you make nothing from providing it, intellectual property law does not apply. users of the library could be held liable just not the library, it would be considered a good-faith publisher. Oooo library would also have to set and maintain clear limits to duration of use and WOULD be liable if it failed to follow/pursue its own policies.

  14. 339point4 says:

    As a librarian, I am mortified by this. Librarians, of all people, should know better. Academic librarians are, among other things, responsible for teaching students how to properly use information. They can do this directly, or indirectly by example. This is a very poor example.

    • rdclark says:

      Thank you. Institutions that operate as a public trust and in the public interest have an ethical obligation to maintain the highest possible standards which, clearly, does not include violating contracts and endorsing improper use of rented or borrowed material.

      This should not require any action by Netflix or anyone else. The college’s own lawyers will undoubtedly (and as quietly as possible) put a stop to it.

    • ckspores says:

      I am really disgusted with librarians that think this is okay. As a librarian myself I would never violate Netflix’s TOS like this because it simply sets both a bad example and a bad precedent. While I give credit to Netflix for not pursuing the issue I think that librarians doing this (and bragging about like like the original blog poster) should be not only ashamed of themselves but should suffer consequences for their blatant misuse of the service.

      Money is tight in libraries everywhere! I get it! But being a jerk about saving a few dimes makes us all look like idiots. This librarian (and all of them) should know better.

  15. Saltpork says:

    Netflix just went even higher in my book.
    We have other things to do then witch hunt libraries. I like that philosophy.

  16. evnmorlo says:

    It might be OK for a library for which $3000 is an “enormous amount of money”, but most college libraries are funded well enough. On the other hand, Neflix hands out millions of free trials and hardly has any expense for streaming, so library subscription abuse isn’t too significant. I think a struggling library could certainly charge for “popular titles” not used for classes

  17. xamarshahx says:

    now the mpaa will probably sue netflix and all these libraries

  18. smo0 says:

    Good for them…. we are taking one step further into resolving our education issues… baby steps, people.

  19. WagTheDog says:

    Professors assign movies? I went to the wrong University!

  20. javert says:

    If Netflix is cool with this then why is this even an article? Or is this a strange way to talk about a company doing good?

  21. sumocat says:

    It’s not Netflix the librarian needs to worry about, but the movie studios. Let’s say Netflix cuts them off, what do they get out of it? One less paying customer. Netflix only rents movies; it does not sell them. The only ones getting screwed here are the movie studios.

  22. Conformist138 says:

    Meh, I fully admit that I have a (highly trusted) co-worker/friend who accesses my account to stream cartoons for her daughter. Netflix allows two streams at once for the basic plan and there’s only one of me. We get paid so poorly at my job that she really can’t afford to spend money on anything that isn’t 100% necessary. So, it doesn’t hurt me at all and Netflix has her hooked so she’ll probably subscribe to their service when there’s less of a strangle-hold on the finances. I’ve always loved how Netflix doesn’t try to punish their paying customers. I mean, all that would lead to is fewer people willing to pay and more attempts by those who remain to screw them on “principle”.

  23. Whtthfgg says:

    makes sense to quote the whole exchange. Otherwise it looks very out of context

    Whoops. Turns out Netflix isn’t actually cool with libraries using the service and doesn’t want early adopting librarians to be encouraging others to do so. Netflix doesn’t offer institutional subscriptions and expects its services to be limited to personal consumption. “We just don’t want to be pursuing libraries,” Netflix’s vice president of corporate communications Steve Swasey told the Chronicle of Higher Education recently. “We appreciate libraries and we value them, but we expect that they follow the terms of agreement,” he said, adding that Netflix “frowns upon” the liberties taken by librarians.