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Libraries and Netflix — Questionable Borrowing Practices From People Who Know From Borrowing

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Recently, a small number of university libraries have begun talking about a practice that strays into apparently illegal grounds — using a Netflix rental subscription to provide both DVD and streaming movies to their campus.

A blog post by Rebecca Fitzgerald of Concordia College seems to have started the public knowledge-sharing of this practice. An earlier paper by Ciara Healy of the University of Wisconsin in Library Trends outlines her experience implementing a similar approach, starting a few years ago. The article is written in a tone that is at times shockingly enthusiastic:

The impetus for exploring the use of Netflix was my experience as an at-home Netflix subscriber: “Let’s get a Netflix subscription for the library.” So general has been the home use of Netflix that the importance of the idea was at once recognized by my colleagues.

In addition to outlining a process for paying for the DVD subscription using a credit card, implementing a lending service based on it within her campus, and tracking usage, Healy also rolled the program out to an extension (I have to admit my jaw dropped when I read this):

A complication that had to be dealt with was that the college expanded one campus and opened a new one in an eighteen-month period. Adding inter-campus lending to the Netflix model was tricky, but extension of the service to deal with this expansion became part of the pilot program because several professors who taught on more than one campus wanted to use Netflix DVDs wherever they taught. In the case of a branch campus request, when the Netflix DVD arrived it was simply sent via intercampus mail to the branch library along with the Netflix return envelope.

The Chronicle of Higher Education recently covered the phenomenon, followed by additional coverage in ReadWriteWeb.

The practice boils down to university libraries purchasing fairly robust (in some cases, 16-discs at a time) subscriptions from Netflix, allowing them to have a strong virtual collection while also providing streaming capabilities so they can immediately fulfill requests. As Fitzgerald says in her post:

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.

Netflix, however, is probably becoming less and less amused by the trend, even though they have yet to bring the hammer down. Their terms of service specifically limit rentals and streaming to “personal, non-commercial use.” Since Netflix doesn’t have institutional site licenses, Wisconsin’s Healy found a way around this — get their library its own credit card, as if a credit card anthropomorphizes a library sufficiently to  make it a person.

Peter Hirtle, writing on the LibraryLaw blog, sees the issue in pretty clear terms, reflecting on the fact that by taking a Netflix subscription, users enter into a binding agreement with Netflix to limit use to personal and non-commercial uses, which Netflix’s agreement defines further to allow for members of your family and personal computers:

I don’t see how a library subscription to Netflix could be considered to be “personal” – not when the purpose of the subscription is to lend the movies to others, rather than watch them yourself (as if a library could even watch a movie.)  Nor can authorized users of a library be considered to be “members of your immediate household,” nor could library workstations be considered to be “personal computers.”  I am not even sure that we could consider Concordia’s use to be non-commercial, since its purpose is to avoid paying purchase, rental, and licensing fees – and avoiding purchasing an item has at times been considered to be “commercial.”

Precedents suggest that Hirtle’s right. Companies were found liable for rights violations when they were trying to save money in the Texaco case, and the Napster case underscored that saving money is a commercial goal. On one forum, educators and librarians briefly tried to spin up the idea that “fair use” might protect them, but streaming full movies or lending full DVDs clearly goes beyond the spirit of fair use. Remember, the four posts of fair use — to be employed together, not separately — are :

  1. the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
  2. the nature of the copyrighted work;
  3. the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
  4. the effect of the use upon the potential market for or value of the copyrighted work.

While the purpose of the use may be nonprofit and educational, if the materials are entertaining movies, if they are watched or delivered in their entirety, and if the users no longer feel the need to rent or buy the movies, 3/4 of the criteria of fair use are unfulfilled. This creates huge exposure for universities, both from Netflix and from film companies.

It’s important to remember that contracts supersede copyright laws pretty uniformly, so there is substantial risk.

Some librarians are also shocked by the practice. Meredith Farkas, writing on her blog “Information Wants to Be Free,” says:

It’s annoying enough when average people do things like this, but librarians should be smarter than that. We are supposed to be the ones helping faculty stay on the straight-and-narrow regarding copyright. What kind of an example are we setting when we show such flagrant disregard for a company’s Terms of Service? And this not only opens a library up to being sued by Netflix; it also opens the library up to being sued by the studios that own the movies libraries are saving money on by not purchasing and getting through Netflix.

In addition to living on a borrowed video archive, this library practice is probably living on borrowed time.

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About Kent Anderson

I am the Founder of Caldera Publishing Solutions, a consultancy specializing in informed growth and smart strategy for academic, scientific, and scholarly publishers. I have worked as Publisher at AAAS/Science, CEO/Publisher of the STRIATUS/JBJS, Inc., a publishing executive at the New England Journal of Medicine, and Director of Medical Journals at the American Academy of Pediatrics. Opinions on social media or blogs are my own.


4 thoughts on “Libraries and Netflix — Questionable Borrowing Practices From People Who Know From Borrowing

  1. And if that library has a site license for public performance of copyrighted films from the licensing studios available on Netflix? Would that still be illegal in your view?

    Posted by ipreferastick | Mar 24, 2011, 9:59 pm


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