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Periscope Piracy Sets Up Grudge Match: Hollywood vs. Twitter

Dick Costolo's triumphant tweet could come back to haunt him

Forget Mayweather-Pacquiao. There’s a more interesting fight brewing between Twitter and Hollywood.

The piracy of Saturday’s welterweight boxing championship enabled by Periscope, a livestreaming app recently acquired by Twitter, is setting up a conflict that could be just as brutal.

HBO and Showtime, which partnered on what will likely be the most popular boxing pay-per-view event ever, took a one-two punch of their own Saturday. First, they watched multiple pay-TV distributors experience technical problems transmitting the fight, which probably cut into their sales total.

But what made matters even worse is that countless people who did pay for the fight used their smartphones to re-transmit the fight to users of Periscope and, to a lesser extent, rival app Meerkat. Each stream reached hundreds or thousands of non-paying fans with a picture quality that was shaky and pixilated, yet still quite adequate.

If Twitter CEO Dick Costolo understood the implications of this activity, he sure didn’t show it in a tweet that declared Periscope the “winner” of the night. There’s no question the app got tremendous exposure that will build nicely off the 1 million downloads impressively achieved in just its first 10 days, a fact Costolo made sure to  mention in the company’s underwhelming first-quarter results last week.

But what Costolo needs to be asking himself is if the price of all that publicity may end up too steep if the content companies come after him for backing an app that may be piracy’s biggest facilitator since PopcornTime.

Any pay-TV channel that pays billions to sports leagues for exclusive rights to programming is going to be concerned about what went on Periscope during the Mayweather-Pacquiao fight. While piracy via livestream is far from a new phenomenon, it may well have achieved a new level of visibility this weekend.

It would be one thing if Periscope was some rogue player like Napster. But Twitter has plenty of business with Hollywood that requires its content rights and advertising dollars, and the company does not have the leverage of bigger entities in Silicon Valley. Just as piracy via YouTube and Google’s search has impacted how Google and media conglomerates have dealt with each other over the years, Twitter is now heading in the same direction.

Costolo can’t plead ignorance, either. The title fight isn’t even the first time that HBO has had Periscope in its crosshairs, having issued takedown notices last month after the app became a source for “Game of Thrones” episodes. Piracy doesn’t typically trouble HBO, which has professed to be unfazed by piracy in the past; Jeff Bewkes, CEO of parent company Time Warner, once equated online copyright infringement in the past to free marketing. “Better than an Emmy,” he quipped.

Oddly enough, HBO itself used Periscope earlier in the evening to stream content from Manny Pacquiao’s dressing room via Twitter. There’s a double-edged sword here for sure: Like so many of the technologies that came before livestreaming, there may be more potential than peril to be tapped.

It will be absurd for Twitter to mount the defense that it complies with any takedown notices filed over copyright-infringing content. Because by the time the compliance occurs the livestream is already over, the company is going to need to figure out a better way to combat piracy on the fly. Periscope may require something like Google’s Content ID system, technology capable of identifying forbidden streams in an instant, and maybe even converting them to transactional opportunities for legal alternatives to the content in question.

Surely HBO and Showtime saw this problem coming. They had already filed lawsuits against a select number of notorious websites that had already been promoting illegal streams of the fight days in advance. Periscope is a cruder form of piracy but perhaps more attractive.

Livestreaming has never been treated as serious a piracy threat as torrent sites or content lockers, but that looks about to change. That said, let’s keep the threat here in perspective: While there’s always going to be some leakage for TV content via livestreaming, the amount that will go on will pale in comparison to the amount available in other forms of piracy that don’t require the perpetrator to be actively transmitting at a particular time.

Neverthless expect to hear from fearful rights holders in the coming days, and not just in boxing. The NHL has already suggested banning the app from its arenas; transmitting from within an arena (as opposed to in front of TV) is actually a separate legal can of worms. And though the MPAA and NATO haven’t shown much concern for the livestream threat yet, it’s hard to believe that equanimity will hold much longer.

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