When Netflix's DVD Giveaway Became a Legal Cliffhanger: An Entertainment Lawyer Weighs In
Updated: Sep 5
Today, I'm diving deep into Netflix's DVD Giveaway fiasco—a classic tale of good intentions mired in legal ambiguities. The story unfolds like a thrilling courtroom drama, featuring a clash between intellectual property law and public relations. Let's dive right in.
The Plot Thickens
Netflix, in a move to commemorate the end of an era—the discontinuation of its DVD Distribution Service—decided to give away 10 DVDs to random subscribers. Sounds like a feel-good finale, right? Except there was a plot twist: the announcement left everyone wondering whether these DVDs had to be returned. As an entertainment lawyer, I was captivated by how quickly this public relations victory became a legal quagmire.
The Conflicting Narratives
Articles and blogs erupted on the internet like popcorn, questioning the true nature of this "giveaway." Was it a gift or just a long-term rental? Netflix's terms of service only allow subscribers access to a single DVD at a time. So, offering a stack of 10 seemed like a generous parting gift to soothe the disappointment over the service's termination. However, the ambiguity in the announcement led to public confusion instead of gratitude.
The Legal Underbelly of Netflix DVDs
Here's where the plot gets juicier. NPR's "Morning Edition" and The Washington Post contacted me for legal clarity. You see, Netflix's DVDs aren't precisely theirs to give away. Netflix has a license from studios and filmmakers to distribute these DVDs but doesn't own the underlying intellectual property --- the film. Under its license, Netflix may give subscribers access to DVDs for personal use but is prohibited from selling or otherwise giving them ownership. To give away the DVDs outright without any licensing restrictions would be like handing over mini-goldmines of copyrighted material, potentially opening Netflix up to lawsuits from rights holders. That kind of intellectual property intricacy makes an entertainment lawyer's heart race!
Navigating the Legal Minefield
If Netflix demanded the return of these DVDs, could they enforce it, especially with the DVD service soon to be extinct? Its website's Terms of Use are pretty straightforward: DVDs must be returned if the service is canceled. However, pursuing customers legally could be a PR disaster, yet ignoring the issue might irk studios and filmmakers.
The Ambiguous Ending
Netflix finally settled on a cliffhanger ending: On its website, Netflix announced that subscribers could "enjoy" the DVDs for as long as they liked and that they wouldn't be charged for unreturned DVDs, even if kept beyond September 29, the date Netflix ceases its DVD operations. That careful wording means subscribers will not own the DVDs but will be forever bound by the license terms within the Terms of Use now on the website, which prohibit copying, selling, or commercializing the DVDs. Whether Netflix's resolution here will trigger legal action from the rights holders is unclear. Netflix seems to be betting against it.
The Moral of the Story
Things can get tricky when businesses try to balance keeping consumers happy and navigating the complexities of intellectual property. Netflix could have avoided these hiccups if it had taken more time to analyze and understand the rights issues before launching its PR campaign. As an experienced entertainment lawyer, I find cases like this a compelling reminder of how essential legal expertise is in the rapidly evolving and complex entertainment landscape.
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The information provided in this article is for general informational purposes only and should not be construed as legal advice or opinion. Readers are advised to consult with their legal counsel for specific advice.