By: Audrey Harris
In the early 2000’s, anti-piracy advertisements tried convincing audiences to refrain from stealing copyrighted materials by equating the crime with auto theft. However, these “You Wouldn’t Steal a Car” advertisements didn’t significantly stem rampant copyright infringements.[i] Copyright infringment costs the United States’ economy an estimated $29.2 billion annually.[ii] This cost will certainly continue if adequate steps are not taken to impede illegal streaming. This documented detrimental effect of piracy on the economy prompted Senator Thom Tillis (R-NC) to propose the Protecting Lawful Streaming Act of 2020 (PLSA), which was subsequently signed into law on December 27, 2020, as part of the Consolidated Appropriations Act, 2021.[iii] Prior to its passage, publicly performing copyrighted material was considered a misdemeanor, while reproducing a copyrighted material was considered a felony.[iv] This difference in criminal sanctions resulted in what is known as the “streaming loophole.”[v] The PLSA closes this loophole by increasing the potential penalties for infringement of copyrighrighted material, done through public performance, to be equal with the potential felonly liability for reproducing copyrighted material.[vi] This is arguably a step in the right direction to mitigate the economic loss from illegal streaming. However, it remains to be seen whether the PLSA does enough to counter the economic cost on the economy, without producing unintended consequences. In particular, due to closure of venues, bars, clubs, and the like due to the COVID-19 pandemic, DJs have turned to streaming concerts as a way to continue to deliver music to their fans.[vii] But with the passage of PLSA are DJs exposing themselves to felony liability if they fail to obtain proper licenses from copyright owners? Is there a potential that the fear of felony charge will stifle the creative production of content by DJs by deterring them from virtual performances at all?
PLSA is not first time the “streaming loophole” has been addressed.[viii] The Stop Online Piracy Act (SOPA) was a 2011 proposed bill which aimed, among other things, to expand, “the offense of criminal copyright infringement to include public performance of: (1) copyright work by digital transmission, and (2) work intended for commercial dissemination by making it available on a computer network.”[ix] However, SOPA never passed due to waning Congressional support amidst mass petition urging Congress to reject the legislation.[x]
So, why did the streaming loophole exist in the first place? The streaming loophole existed, in part, due to the structure of penalties for copyright infringement. Historically, criminal infringement of reproduction and distribution rights have been treated differently than the criminal infringement of the display and public performance rights.[xi] The former could result in felony charges, while criminal infringement of the display and public performance rights “no matter how egregious” would only result in misdemeanor liability.[xii] This has, perhaps unintentionally, created a dichotomy of someone exposing themselves to up to a five-years prison term for physically reproducing copyrighted movies, for example, but only a misdemeanor for instead posting those same movies on the web behind a paywall.[xiii]In our digital age of virtual schooling, on-line streaming, and on-line game playing, it seems that the days of a person selling physical copies of pirated videos or albums are gone; replaced instead, by lucrative websites that offer the pirated materials to a larger audience.
PLSA, in essence, was proposed by Senator Tillis to close this streaming loophole.[xiv] The language of the statute directs that felony charges can be brought against an individual who infringes copyrighted material: (1) for “purposes of commercial advantage or private financial gain,” (2) by either reproduction or electronic distribution, and (3) “distribution of a work being prepared for commercial distribution, by making it available on a computer network accessible to members of the public, if such person knew or should have known that the work was intended for commercial distribution.”[xv]
According to Senator Tillis, the newly created felony liability is intended to be construed narrowly, and “would apply only to commercial, for-profit streaming piracy services [and not] normal practices by online service providers, good faith business disputes, noncommercial activities, or in any way impact individuals who access pirated streams or unwittingly stream unauthorized copies of copyrighted works.”[xvi] “[N]o individual streamer has to worry about the fear of prosecution.”[xvii] Time will tell if the courts heed Senator Tillis’ words.
DJs–Virtual Concerts and Potential Repercussions of the PLSA
It is no secret that one of the changes to society brought by COVID-19 is that people have increased their usage of on-line streaming.[xviii] Consumers of on-line media may intentionally seek out pirated media or inadvertently access pirated media. PLSA aims to address and limit this consumption by increasing the criminal liability that content producers of such pirated content can face.[xix] In light of the massive number of concerts and events which have been canceled due to COVID-19,[xx] some creative DJs have adapted their business models to now provide virtual livestreamed content for fans.[xxi]
Typically, during a pre-COVID-19 live music performance by a DJ, the DJ would coordinate with the hosting venue prior to the show and the venue would provide licensing fees to use songs through a music performing rights organizations[xxii] such as ASCAP[xxiii] or BMI.[xxiv] ASCAP and BMI distribute license fees as royalties to whichever copyright holder the organization represents.[xxv] In this traditional approach, because it is the venue which is ultimately benefitting from the DJ’s public performance of the music, the venue retains the responsibility to ensure that the proper licensing agreements are in place before the performance.[xxvi] COVID-19 has pushed DJs to move to the internet as a creative way to provide a new virtual musical experience.
Within the new realm of virtual streaming of concerts, DJs can no longer rely on the venue host to obtain the proper licensing, and have to begin to learn the complex nuances of music copyright law.[xxvii] Music performing rights organizations function by allowing DJs to utilize copyrighted songs that are within that organization’s repertory.[xxviii] If a DJ decides to stream a virtual concert, the DJ will have to first obtain the proper licensing and then take the proper steps to ensure that the music used is within the music performing rights organization’s repertory.[xxix]Requiring DJs to obtain the proper licensing, which comes with it a hefty price tag, may deter many DJs from offering virtual performances at all. In addition, now if a DJ hosts a virtual concert for commercial purposes, behind a pay-wall, and he or she inadvertently fails to obtain the proper licensing for the music used, he or she may be facing felony liability under PLSA.[xxx] With DJs no longer able to be sheltered behind a venue during virtual concerts, the requirement to purchase licensing, and the new potential for felony liability, means some DJs may find that it is no longer worth it to host virtual concerts.
PLSA appears to have been drafted narrowly, to avoid criminalizing the average internet user that inadvertently streams copyrighted material. Thus, it appears that this legislation has taken a practical approach of modernizing penalties for copyright infringement to provide additional leverage for copyright holders. However, at this time, it is unclear how narrowly the courts will construe PLSA and this legislation may have the unintended consequence of stifling creative content in the world of virtual concerts due DJs’ fear of potential felony liability.
[i] Finlo Rohrer, Getting inside a downloader’s head, BBC News (June 18, 2009), http://news.bbc.co.uk/2/hi/uk_news/magazine/8106805.stm.
[ii] David Blackburn, Jeffrey Eisenach, & David Harrison Jr., Impact of Digital Video Piracy on the U.S. Economy,NERA 12 (2019), https://www.theglobalipcenter.com/wp-content/uploads/2019/06/Digital-Video-Piracy.pdf.
[iii] Continuing Appropriations Act, 2021 and Other Extensions Act, Pub. L. No. 116-159, 134 Stat. 709. B.
[iv] 17 U.S.C.A. § 506. See generally, Press Release, Thom Tillis, U.S. Senator for North Carolina, Tillis Releases Text of Bipartisan Legislation to Fight Illegal Streaming by Criminal Organizations (Dec. 10, 2020), available at https://www.tillis.senate.gov/2020/12/tillis-releases-text-of-bipartisan-legislation-to-fight-illegal-streaming-by-criminal-organizations.
[v] Press Release, Thom Tillis, U.S. Senator for North Carolina, Tillis Releases Text of Bipartisan Legislation to Fight Illegal Streaming by Criminal Organizations (Dec. 10, 2020), available at https://www.tillis.senate.gov/2020/12/tillis-releases-text-of-bipartisan-legislation-to-fight-illegal-streaming-by-criminal-organizations [hereinafter Press Release].
[vi] Continuing Appropriations Act, 2021 and Other Extensions Act, Pub. L. No. 116-159, 134 Stat. 709. B. See generally, Press Release, Chris Coons, Bipartisan legislation to fight illegal streaming by criminal orgniazations to be signed into law (Dec. 21, 2020), available at https://www.coons.senate.gov/news/press-releases/bipartisan-legislation-to-fight-illegal-streaming-by-criminal-organizations-to-be-signed-into-law.
[vii] Liz Kraker, COVID-19 left the live music industry in shambles, so DJs are finding other creative ways to connect with fans, Business Insider (Aug. 12, 2020), https://www.businessinsider.com/edm-live-music-industry-coronavirus-impact-on-djs-2020-8.
[viii] Stop Online Piracy Act, H.R. 3261, 112th Cong. (2011).
[x] Larry Downes, Who Really Stopped SOPA, and Why? Forbes (Jan. 25, 2020),https://www.forbes.com/sites/larrydownes/2012/01/25/who-really-stopped-sopa-and-why/?sh=3e3019177b76.
[xi] Press Release, supra note v.
[xii] Adam Mossoff, Randall Rader, Zvi Rosen, Closing the Steaming Loophole, Regulatory Transparency Project of the Federalist Society 1, 4 (July 20, 2020), https://regproject.org/wp-content/uploads/RTP-Intellectual-Property-Working-Group-Paper-Streaming-Loophole.pdf.
[xiv] Press Release, supra note v.
[xv] 18 U.S.C. § 2319C.
[xvi] Press Release, supra note v.
[xviii] Ryan Williams, How COVID-19 is Changing the Way Americans Engage With Streaming Services, Comscore(May 26, 2020), https://www.comscore.com/Insights/Blog/How-COVID-19-is-Changing-the-Way-Americans-Engage-With-Streaming-Services.
[xix] Continuing Appropriations Act, 2021 and Other Extensions Act, Pub. L. No. 116-159, 134 Stat. 709. B.
[xx] See generally, Here Are All the Major Music Events Canceled Due to Coronavirus (Updating), Billboard.com, (Aug. 24, 2020), https://www.billboard.com/articles/business/touring/9323647/concerts-canceled-coronavirus-list/.
[xxi] See generally, Here Are All the Livestreams & Virtual Concerts to Watch During Coronavirus Crisis (Updating), Billboard.com (Dec. 16, 2020), https://www.billboard.com/articles/columns/pop/9335531/coronavirus-quarantine-music-events-online-streams.
[xxii] See generally, Darren M. Richard, Music Licensing 101, A Nuts and Bolts Guide for Filmmakers, Television Producers, Music Publishers, and Songwriters, 29 Ent. & Sports Law. 12 (2012).
[xxv] See generally, ASCAP Payament System, ASCAP, https://www.ascap.com/help/royalties-and-payment/payment/whocollect (last visited Feb. 10, 2021); How We Pay Royalties, BMI, https://www.bmi.com/creators/royalty/compulsory_license_fees#:~:text=Public%20Television%20(PBS),broadcast%20on%20public%20TV%20stations (last visited Feb. 10, 2021).
[xxvi] See generally, Licensing FAQ, BMI, https://www.bmi.com/licensing/#faqs (last visited Jan. 18, 2021). See also Dreamland Ball Room, Inc. v. Shapiro, Bernstein & Co., 36 F.2d 354 (7th Cir. 1929).
[xxvii] Jesse Washington, DJ livestreams are under attack just when we need music the most, the Undefeated (June 3, 2020), https://theundefeated.com/features/dj-livestreams-are-under-attack-just-when-we-need-music-the-most/(discussing that content platforms such as Facebook and Instagram are directing DJs to obtain copyright licensing before streaming; the very licensing venues would provide pre-COVID-19).
[xxviii] See generally, Frequently asked questions, supra note xxiii.
[xxix] 17 U.S.C. § 106(6) (copyright holders are given the exclusive right to publically perform their works).
[xxx] Continuing Appropriations Act, 2021 and Other Extensions Act, Pub. L. No. 116-159, 134 Stat. 709. B.