Tens of thousands of broadcasters, game developers and fans converged on San Francisco’s Moscone Center during TwitchCon 2015 — Twitch’s inaugural celebration for the video game streaming community.
Since its launch in 2007, Twitch has grown into the world’s most popular streaming platform for video game and electronic sports Internet streaming, ranking fourth overall in the U.S. for peak Internet traffic in 2014. Other platforms, such as the recently-launched YouTube Gaming, are also gaining popularity.
Why the surge? Not only do the services provide a community for video game fanatics, streamers can earn good money through advertisement sharing and viewer donations, and can further leverage their growing popularity into brand deals or other sponsorships. This means many streamers are effectively running a business out of their bedroom. But while it may be exciting to make a living from broadcasting videogame content, streamers should take early precautions to protect their channels and avoid being “GG’ed” by a potential legal dispute.
Copyright law protects original content, such as original songs and videogames, from unauthorized reproduction and use. Both the underlying music composition and the sound recording itself are protected by copyright law, and most often owned by different entities.
Copyrights typically span the author’s lifetime plus 70 years, and licenses are available either through statutory licenses or licenses from a performance rights organization or the applicable music publisher or recording company. Streaming platforms generally enforce copyrights on behalf of the copyright holder by monitoring for the unauthorized use of copyrighted music.
Last year, Twitch struck a deal with Audible Magic allowing it to mute pre-recorded Videos on Demand (“VoDs”) that used copyrighted music (including in-game music). Specifically, Audible Magic’s software scans VoD content from Twitch users in 30-minute blocks and mutes the entire block if copyrighted music is detected.
This can be profoundly frustrating for both the broadcaster and the audience who may not know why the audio was cut. To avoid this, streamers should refrain from playing copyrighted music on their streams, and instead produce their own music or use licensed music from an authorized source (for example, Twitch responded to public demand earlier this year by introducing a royalty-free music library for streamers to use).
Streamers should also be aware that, even if the streamer is not playing copyrighted music, some games, like Grand Theft Auto, contain music that may cause their streams/VoDs to be flagged. Before posting a VoD, it’s good practice to scan the audio for copyrighted music during post-production.
“Fair Use” FTW
Just like using copyrighted music, broadcasting videogame content within a broadcast can also have legal implications for streamers. Many streamers, such as Twitch broadcasters, produce content based entirely on playing videogames. In these playthroughs, the underlying material is copyrighted and owned by the game developer, but streamers may be legally allowed to reproduce the copyrighted content if they fall under the “fair use” rule.
In a nutshell, “fair use” means a streamer can broadcast her gameplay “for purposes such as criticism, comment, news reporting, teaching . . . scholarship, or research . . . .” Whether reproduced content is “fair use” depends on a number of factors: the purpose and character of the use; the nature of the copyrighted content; the amount of content used in relation to the copyrighted work as a whole; and the effect of the use on the potential market for or value of the copyrighted work. Id. For example, a broadcaster’s gameplay is more likely to be protected “fair use” if accompanied by the broadcaster’s running commentary.
Although streamers have generally avoided being brought into court on copyright lawsuits, the Digital Millenium Copyright Act (“DMCA”) allows game developers and other copyright holders to file takedown notices targeting copyrighted content. Further, online streaming platforms are starting to use automated tools for scanning and blocking copyrighted content. YouTube’s Content ID technology, for example, automatically scans streams and uploaded videos for copyrighted content. If a stream is flagged, Content ID may replace the streamer’s broadcast with a placeholder image.
Streamers should therefore protect themselves and their content by becoming familiar with their “fair use” rights. Ninth Circuit law requires copyright holders to “consider fair use before sending a takedown notification” to the broadcaster. In the recent decision involving a YouTube video of a baby dancing to Prince’s “Let’s Go Crazy,” the Ninth Circuit Court of Appeals held that a copyright holder who “pays lip service to the consideration of fair use” may be subject to financial penalties.
Further, both YouTube and Twitch allow streamers to respond to takedowns with a “counter notice” explaining why the takedown was mistaken and that the content is protected under “fair use.” Being well-versed in the law can help streamers protect their channels, and therefore their business, from being disrupted.
Maximizing Gold/Minute — Consider Incorporation
Streamers should consider the potential benefits of formalizing their streaming business by setting up their own corporation or limited liability company (“LLC”). Incorporation can provide important tax benefits (remember, donations from viewers through streaming platforms such as Twitch are not gifts and must be reported each year as income), allow for the deduction of normal business expenses, better protect any personal assets in case of legal action, and increase the streamer’s credibility. It is important to seek help from an experienced attorney to avoid any pitfalls during the setup process.
Pick a 1337 Name
Trademarks are words or symbols that represent a certain company or product and make it distinct from others. They are a company’s branding. Popular trademarks include Apple’s logo, Nike’s swoosh, McDonald’s golden arches, and the words “World of Warcraft” by Blizzard Entertainment.
Streamers should also consider trademarking their screen name to strengthen their brand and better promote their activities. This usually involves the first step of “trademark clearance”—making sure that the chosen name does not infringe an existing trademark. This is especially important if the streamer intends to create a website incorporating the screen name in the domain or to sell merchandise branded with the screen name.
The trademark clearance process usually involves retaining an attorney to determine whether the trademark exists, whether the screen name will be a “weak” mark that is limited in scope or unenforceable, and whether the screen name has negative connotations in other contexts or cultures.
“Reported” — Avoiding Slander
State law typically prohibits slander, defined as “false and unprivileged” announcements about another person that cause harm. A streamer can be guilty of slander by lying in the following ways:
- Claiming that the person committed a crime or was indicted, convicted or punished for a crime.
- Claiming that the person has an “infectious, contagious, or loathsome disease.”
- Making statements that directly injure that person’s business.
- Claiming that the person is impotent or promiscuous.
If proven, the streamer would be liable for actual damages to the victim caused by the streamer’s lies, such as the loss of a job, sponsorships, customers or viewers, or clients. Thus, streamers should exercise special care when talking about other people on their stream or during a VoD.
“Supp pl0x”—Using Celebrity Endorsements & Celebrity Likenesses
Streamers must also be careful when broadcasting content related to professional gamers or other celebrities. Claiming that another person endorses your channel without permission may violate that person’s privacy rights. In California, each person has “right of publicity” to their name, voice, signature, photograph, and likeness.
This means each person, including professional gamers, has the right to prevent others from using their identity to endorse a product. A streamer cannot knowingly use a professional gamer’s identity to promote or advertise the steamer’s channel or products without the gamer’s consent. For example, a League of Legends streamer cannot knowingly claim that his/her stream is “Dyrus-approved” or “sponsored by Lee ‘Faker’ Sang-hyeok” for advertising purposes if there is a direct connection between those statements and a commercial purpose (such as doing so to market the stream or sell merchandise).
Further, the Federal Trade Commission (“FTC”) can penalize a streamer for lying about an endorsement or for failing to disclose relevant information about the endorsement. Endorsements must “reflect the honest opinions, findings, beliefs, or experience of the endorser,” endorsements cannot be deceptive, and streamers are liable for “false or unsubstantiated statements made through endorsements, or for failing to disclose material connections between themselves and their endorsers.”
Section 43(a) of the Lanham Act (the most prominent federal trademark statute) also prohibits broadcasters and game developers from implying they are endorsed by a celebrity if doing so would be misleading. The Ninth Circuit previously addressed this issue in several cases involving Electronics Arts (“EA”), though in the context of game developers rather than broadcasters.
For example, in Keller v. EA, former college football player, Samuel Keller, sued EA for improperly using his likeness as part of EA’s NCAA Football videogame franchise without compensating Keller. California law protects the use of a celebrity’s image if “the work in question adds significant creative elements so as to be transformed into something more than mere celebrity likeness or imitation.”
The appeals court ultimately found that EA’s use of Keller’s image was not protected because EA had “literally recreat[ed] Keller in the very setting in which he has achieved renown.” (Note, however, that EA recently filed a writ of certiorari with the Supreme Court over a similar copyright dispute concerning a state-law right-of-publicity claim.)
Streamers should therefore tread carefully when broadcasting public statements about sponsorships or endorsements related to the streamer’s channel, website, or other products.
Last, but not least, streamers should read every agreement that affects their business. This means carefully assessing the terms in sponsorship or partnership agreements before signing them. These agreements may impose restrictions on what can/can’t be said during a stream or VoD. Further, multiple sponsorships or partnerships can raise conflicts of interest if the streamer is contractually obligated to promote two competing products.
Streamers should also become familiar with the Terms of Service for their streaming platform(s). Each platform has different terms, but key provisions usually include a license from the streamer allowing the platform to use the streamer’s content for any reason, prohibitions against certain types of unauthorized conduct by the broadcaster, and a provision allowing for termination of the streamer’s account for repeated violations.