Sky looks to draw a legal line in the sand as it takes on the news

  • Opinion
  • December 12, 2016
  • Matt Hayes
Sky looks to draw a legal line in the sand as it takes on the news

Sky’s recent legal action over the alleged misuse of its exclusive content has drawn a lot of media attention. Its guns have been levelled at Fairfax, TVNZ and NZME.

So one has to ask the question, is a battle over the reproduction of material for the purpose of reporting on current events warranted?

I can’t speak to the merits of the more recent claims that Sky has against TVNZ and NZME, over the use of content for reporting on rugby fixtures. There’s not enough publicly available information yet about the claims, although one might speculate that the upcoming Lions Series in 2017 is a motivating factor for trying to establish a line in the sand. However, there’s plenty to learn from Sky’s legal action against Fairfax during the Olympics.

In Sky’s dispute with Fairfax, the legal papers were lodged with the High Court three days into the Olympics. Sky claimed that Fairfax had infringed the exclusive media rights that it had secured enabling it to cover the Olympics. At the time, Sky also sought an order, pending a full trial, to prevent what it said was the unfair use of content it had paid handsomely to have the right to broadcast in New Zealand.

While Sky was refused an interim order, which was reported as a loss by mainstream media, it was in fact a win for Sky. How can you win when you lose in Court, you might ask? Well, Sky won because they got the result they wanted by a different means.

Sky had an exclusive media rights agreement with the International Olympics Committee (IOC), allowing it to broadcast and exhibit footage of the Olympic Games in New Zealand, it claimed. Outside of this, the IOC allowed media organisations to sign up to ‘News Access Rules’ (NAR) so they could be an accredited media organisation at the Olympics. Under Sky’s agreement with the IOC, the local New Zealand Olympic Committee (NZOC) had the power to issue ‘Supplementary News Access Rules’ (SNAR) to local media in New Zealand. These were slightly more favourable than the IOC’s NAR, but still strictly limited the manner in which other news media outlets could report on the Olympics using the IOC’s content.

The use of NAR/SNAR is commonplace in New Zealand and internationally. They are designed to address the ‘fair dealing’ defence to copyright infringement in a proactive way – essentially it’s a way of sorting out in advance how much content you can use and how you can use it without attracting legal action. The defence allows some copying of the material for the purpose of reporting current events and the Court noted that news coverage of the Olympics was in the interests of both the IOC and Sky to encourage viewer participation in the Olympics.

The NZOC SNAR created a ‘safe harbour’ around the length and frequency of broadcast material that other media could use when reporting on the Olympic Games. The NZOC SNAR provided three options for online news reporting. One option allowed the use of six minutes of Olympic material per day. It could only appear in a video highlights package as a news bulletin update, with no more than three bulletins per day. Each bulletin could contain no more than two minutes of Olympic material and each bulletin had to be at least two hours apart. Coverage of a specific event could only be broadcast 30 minutes after the conclusion of the live event.  Another option allowed for use of two minutes of short extracts from Sky's footage per day, not necessarily in a news bulletin format, with no more than 30 seconds per clip of any one and, again, not to be broadcast until 30 minutes after conclusion of the live event.

The NZOC offered the SNAR to major New Zealand media companies but Fairfax refused to sign up, and streamed edited footage from Sky’s broadcasts of the Olympics on the Stuff website.

The nub of Sky’s complaint against Fairfax was the amount of online use of Sky's material made by Fairfax, which Sky viewed as more than permitted by fair dealing, and which was also outside the parameters provided in the SNAR.  Fairfax also utilised a roll-on feature that enabled a user to view edited footage of a particular Olympic event sandwiched in between advertising material. The patient user, who waited for the second advert to end, could then access other previously uploaded Olympic material via an automatic playlist feature. This meant a user could potentially access more than six minutes’ worth of Olympic highlights on any given day via the Stuff website.

The Court said that this roll-on feature of Fairfax’s reporting was a significant and blatant deviation from what was acceptable under the NAR or SNAR. The Court said that it would have seriously considered granting an interim order if Fairfax had continued to make use of it. But Fairfax made it easy for the Judge, because on the third day of the hearing, it advised the Court that it disabled the roll-on feature and had accepted that such a feature could not be defended as ‘fair dealing’.  The Court also recorded that it was apparent that, by the time of the judgment, Fairfax had significantly modified its conduct.

This was a practical victory for Sky. It forced Fairfax to make a significant change in its behaviour and method of content delivery, and Fairfax was warned that if the conduct resumed, Sky would be able to seek a mandatory injunction at short notice.  We have also heard that Fairfax's online use of Sky's footage operated within the parameters in the SNAR for the remainder of the Rio Olympic Games.

So, is it worth having a battle over the use of exclusively-licensed content for news reporting? It will depend on the circumstances. But as long as you’ve paid large sums of money for the exclusive right to broadcast content for a major sporting event like the Olympics, a series of rugby fixtures, or a Joseph Parker fight, it probably will be.

This is going to be an interesting space to watch. I think we’re likely to see more of these issues arising in the coming year as consumers continue to drive the move towards a one-to-one method of content delivery and shun the old delivery method of one-to-many. 

  • Matt Hayes is a senior associate at AJ Park. 

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