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Can an Academic Library use a Netflix Subscription?

Interesting article:

Travis Kaya, Academic Libraries Add Netflix Subscriptions, Chron. of Higher Ed. (Sep. 18, 2010).

The article touches on the conflict between a professor’s fair use argument for classroom use of the rented DVDs (or use of the streaming service via the library’s subscription) and the college libraries’ potential violation of Netflix’s terms of use.

I don’t know Netflix’s arrangements with copyright owners, but as to streaming, I presume they pay per stream, so the copyright owner isn’t clearly harmed if faculty use the streaming service. Instead, copyright owners are compensated.

As to the tangible DVDs, to the extent this means fewer libraries purchase the DVDs themselves, that’s a potential revenue loss for the copyright owners, but it’s not as if Netflix isn’t paying for its copies of the DVDs. So, if more libraries take this approach, Netflix will have to keep more copies of each DVD on hand, resulting in at least some (but perhaps fewer) sales of the DVDs. Whereas before there was an inefficiency of distribution at work where libraries kept on hand copies of discs they weren’t using or used infrequently, they’ve now found a distributor in Netflix who can get the disc to them quickly enough that it’s more efficient to have this subscription rather than their own under-utilized storehouse of discs.

Regardless of whether copyright owners through copyright or Netflix through contract can prevent this activity by libraries, should they be able to? Are copyright owners entitled to an inefficient distribution market?

See also:

Categories: Contract, Copyright, Copyright Limitations and Exceptions.

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