Video Game Streamers: Free promotion, copyright infringement, or both?

Just before New Year, a controversial piece of US legislation tucked into a COVID-19 relief package had people who stream video gameplay online concerned that their livelihood was about to be criminalized. While a careful reading of the legislation reveals that the initial reaction was unwarranted and perhaps overblown, it does raise some interesting questions about the legal status of “streamers” and the interplay between game publishers and online video content creators.

Streamers use internet platforms such as Twitch and YouTube to broadcast videos of themselves to their fans and followers. Some of the most popular streamers will play videos games on camera during the streams. These gameplay videos are sometimes referred to a “Let’s Play” videos (as in, “Let’s Play Animal Crossing” or “Let’s Play Assassin’s Creed”). They earn revenue by offering subscriptions, accepting donations from fans, promoting products and services, and selling merchandise. The videos are live streamed so viewers can interact in real time with the streamer using a chat function. Many of the videos are also stored and can be viewed on-demand later.

Protection Lawful Streaming Act

The US legislation, which is known as the Protecting Lawful Streaming Act, was sponsored by Sen. Thom Tillis and was rolled into the $2 trillion COVID relief package. Tillis’ bill is intended to make the commercial streaming of infringing content a felony offense. It was aimed at streaming services that offer pirated movies and illegally broadcast live professional sporting events. Sen. Tills claims it is narrowly tailored to target criminal organizations and not to criminalize the activity of individual streamers.

While the legislation will not criminalize the practice of streaming videogame play online, it does highlight the tension between businesses who create video games and individuals who use those games on streaming platforms to earn revenue, often without the consent of the copyright owner. According to industry research an average “professional” streamer can make between $3,000 to $5,000 (US) a month playing 40 hours a week. This does not include advertising revenue, which can generate another $250 for every 100 subscribers, paid sponsorship deals or the sale of merchandise like t-shirts.

Canadian Law

Under Canadian copyright law, when a streamer plays a computer game online and transmits the video to the public (the audience), she is engaged in the communication of the game to the public by telecommunication, which is a form of public performance, one of the exclusive rights granted to copyright owners under section 3 of the Copyright Act.

Video games, like movies and television shows, are complex bundles of copyright-projected subject matter. The computer code and any text elements are literary works, the graphics are artistic works, the score is a series of musical works. Many games include voice-acting and those voice files are considered performers’ performances that are also protected by copyright. Copyright in these diverse elements is typically owned by the publishers which earn revenue from the sale of the game, monthly subscriptions, in-game transactions, or some combination of all these elements.

While the streamer is not transmitting a copy of the game code when she plays online for an audience, she is communicating the graphics, the text, the music, and the voice actors’ performances. If this is done without the consent of the copyright owner, it could give rise to a claim of copyright infringement with the potential for statutory damages.

If its infringing, why no litigation?

So, if streamers are engaged in widespread copyright infringement, why haven’t we seen the game industry unleash a wave of litigation to stop streaming like the music industry tried to do in the early days of Napster and other file-sharing platforms? There are two possible answers: the “legal” answer and the “business” answer.

We’ll get to the “legal” answer below, but the “business” answer arises from the symbiotic nature of the streamer/game publisher relationship. Successful streamers can attract hundreds of thousands or millions of fans and generate a lot of publicity and demand for the games they play online. For a smaller, indie developer without a large marketing and promotion budget, that kind of positive attention can turn a relatively unknown title into a viral sensation selling hundreds of thousands of copies. Rather than trying to discourage online gameplay, many developers nurture their relationship with the streaming community by giving them exclusive advance access to new releases, offering free copies of games for streamers to give away to fans, and even appearing on the stream to talk about the game.

However, not all game publishers benefit equally from having their titles streamed. Watching a streamer enjoy a challenging fighting or racing game likely has a positive impact on the sales of that title. However, the same might not be true of shorter, story-driven adventure games which can often share many attributes with movies. If a streamer plays through the full story online, the audience who watches the stream might not be as likely to purchase the game themselves once they know how the story ends, especially if the nature of the game is that each gameplay experience is the same or similar each time so there is limited replay value, or if an important part of the story is based on surprise or twist endings.

This has recently led to a discussion in the industry of whether streamers should pay for licenses from game publishers to use their titles online as a way to share the revenue earned by this ancillary activity. This suggestion is generally met with a strong negative reaction, usually on Twitter, from the streaming community who point out the enormous benefit to game publishers from the promotional effect of streaming and who wave the banner of “fair use” (or “fair dealing” for those of us in Canada).

It’s copyright, so it’s complicated

The application of copyright law to streaming is certainly not straightforward. In Canada, it is not an infringement of copyright to use a work in a way that is fair dealing for the purpose of research, private study, education, parody, satire, criticism or review. It is not enough that the use is for one of these purposes; the use also has to be “fair” which is a contextual fact-specific question. Courts have developed a fairness test that looks at certain factors to determine if a particular use is fair or not. These factors include the purpose of the dealing, the character of the dealing, the amount of the dealing, alternatives to the dealing, the nature of the work, and the effect of the dealing on the work.

Not all streaming is equal under a fair dealing analysis. A 30-minute stream of a sports game with commentary about the playability would likely be found to be fair dealing for the purpose of criticism or review. A four-hour stream of the full play-through of a story-driven adventure game which offers little commentary by the streamer and reveals the twist ending, and which is carried out for profit by a commercial streamer would be less likely to be considered fair by the Court. Most actual video game streaming falls somewhere in between these two examples.

Canada’s Copyright Act offers one more wrinkle to consider – the “user-generated content exception” found in section 29.21. Under this exception, it is not an infringement of copyright for an individual (the streamer) to use an existing work (the computer game) in the creation of a new work (the Let’s Play video) and for the individual (streamer) to authorize an intermediary (YouTube or Twitch) to disseminate it (transmit it online). However, for this exception to apply the use must be for a non-commercial purpose. This means amateur streamers might be able to rely on it, but people who earn their living from the activity cannot. The use cannot also have a “substantial adverse effect” on the exploitation of the existing work (the game). In other words, if your highly popular but unmonetized Let’s Play of a game has a harmful effect on the sale of the game, the exception would not apply. The most likely case of harming sales of a game would be by spoiling plot points or twist endings, but other possibilities could exist as well.

For the time being, it looks as if most of the gaming industry will continue to tolerate and even encourage the streaming community, while the discussion of whether licensing is appropriate will continue.

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About Gerald Kerr-Wilson

Jay Kerr-Wilson is the co-leader of the Technology, Media and Telecommunications group and practices primarily in the areas of communications and public law, with a particular emphasis on copyright.