TWITCH.TV: THE WORLD'S NEW CHANNEL FOUR.

• Author: Selak, Christopher

1. INTRODUCTION

   What if someone told you that in 2019 a video game championship had more concurrent viewers than the NFL's Superbowl? (1) Or, that you could make millions of dollars per year playing such games in front of people? (2) Twitch.tv has grown from simple interhouse Atari competitions to mainstream entertainment events, drawing millions of views each day. (3) The site's popularity continues to reach past college dorm rooms, grasping the attention of famous music artists like Drake and Post Malone, and even professional athletes like Juju Smith-Schuster and Karl Anthony-Towns. (4) Today, as the COVID-19 pandemic continues to run its course, Twitch.tv has become an outlet for more than just video games, with other genres climbing the charts like talented artists and live musical performances. (5) Alternatively, Twitch has faced numerous obstacles, such as legal issues and disputes over the Digital Millennium Copyright Act (DMCA) "take down requests." (6) Additionally, streamers must be aware of Twitch's Terms of Service (TOS), community guidelines, tax structuring, and trademark rights because any infringement of the aforementioned could lead to a permanent ban from the platform. (7)

   This Note will explore the legal impediments of becoming a streamer on the streaming platform Twitch.tv in both the U.S. and the European Union. (8) Part II explores the historical back-ground of copyright law, TOS, community guidelines, trade and tax law. (9) Part III provides a factual analysis of secondary issues streamers face such as TOS, community guidelines, trademark infringements and how Twitch is providing protections. (10) Lastly, Part IV evaluates the comparative tax procedures in place for streamers located in the United States and European Union. (11)

2. HISTORY

   1. Justin.tv into Twitch.tv

      In 2005, while studying physics and psychology at Yale University, Justin Kan started to develop Justin.tv, a live broadcast of his life and, in the following years, the other people he had hired. (12) In the next two years, Justin.tv amassed an enormous following on the internet that propelled the company beyond the expectations originally anticipated. (13) This rapid growth generated various issues such as turning growth into profit, guaranteeing the personal safety of users, preventing copyright infringement during broadcasting, and addressing tragic events like, suicide taking place on its platform. (14) After broadcasting successfully for seven years, Justin.tv made the decision to shut down and rebrand into Twitch. (15)

      Shortly after the rebrand, Twitch saw immediate success in live videogame streaming. (16) Not going unnoticed, larger companies like Google, Yahoo, and Amazon quickly submitted bids of close to a billion dollars (USD) to acquire the company. (17) After a successful deal with Amazon, Twitch swiftly came to dominate the video game streaming market over its competitors. (18) Similar to Justin.tv, Twitch also faced its own set of issues regarding its platform, users, and compliance with U.S. and European laws. (19)

   2. Streaming and Copyright in the United States

      In 1976, the Copyright Right Act (Public Law 94-553) was signed with the primary purpose of cultivating creations and rewarding artists for their originality and creativity. (20) Twenty-two years later, President Bill Clinton signed the Digital Millennium Copyright Act (DMCA), which further enhanced authorized infringement. (21) Under the Copyright Act, streaming is, at a minimum, categorized by a public performance through audio visual work. (22) Over time, DMCA has played a significant role in video game streaming by providing both boundaries and protections to streamers. (23) The increase in content takedowns has encouraged Twitch and streamers of the platform to figure out new techniques to further enhance their content. (24)

   3. European Twist on Copyright and Streaming

      In 1886, the Berne Convention was agreed to, which allocated authors with protections and rights to their work. (25) Collectively, the European goal over time was to align copyright acts into a single enactment to be followed by every member country. (26) Member States and their citizens are able to ensure these protections will endure after their lives as well. (27) Early on, European copyright laws differed from the United States's in many regards. (28) Now, Europe and its member states are attempting to take a similar approach to the United States by cracking down on copyrighted material shared on online platforms. (29)

   4. Terms of Service and Community Guidelines History

      As society continues to progress regarding its laws and morals, so are Twitch's Terms of Service and Community Guidelines. (30) For example, despite Congress's failure to pass an amendment in support of heightened regulations on Twitch, the streaming service independently took on new regulations. (31)

3. FACTS

   1. Global Rise of Video Game Streaming and Twitch.tv

      Due to COVID-19's ability to keep people at home around the globe, people are watching more live streams. (32) Further-more, researchers project that Twitch will continue to grow, showing little to no signs of slowing down. (33) Twitch, along with other companies and consumers, continues to expand its reach to new viewers and further into the global market. (34) For example, as the United States anticipated one of its biggest elections in history in 2020, members of the United States House of Representatives, such as Alexandra Ocasio-Cortez (AOC) and Ilhan Omar, used the platform to reach voters. (35) Likewise, the U.K. Parliament also began to use Twitch to provide individuals with a stream of its proceedings in the House of Commons and the House of Lords. (36) Looking to the future, Twitch has set itself apart from its competitors by not only staying true to its core through gaming, but also through expanding into global markets outside of the United States, such as streaming talks shows, crafting, music festivals, and gaming competitions. (37)

   2. Becoming "The Big" Streamer and Making Millions on Twitch

      Streamers like Tyler 'Ninja' Blevins, Nick "NickMercs" Kolcheff, and Felix "xQc" Lengyel have turned the average hobby of gaming into a full-time career. (38) After amassing a huge following and gaining world recognition, these streamers have received sponsorship deals with companies such as Red Bull, Adidas, Samsung, and Logitech. (39) While anyone can sign up to be a streamer, it is unlikely in reality that one can make it into a full-time career, in fact, 95% of streamers do not. (40) To be successful, many streamers dedicate themselves to a specific schedule and play the most popular games at that moment. (41)

   3. Copyright and DMCA Takedowns for Streamers in the US

      After overcoming the challenges to start a channel, streamers are then immediately tasked with preventing their channels from being removed from the Twitch platform for copyright infringement and DMCA violations. (42) Recently, Twitch has "dropped a major bombshell on creators" issuing notices to take down and remove the majority of their work dating years back in order to comply with copyright law. (43) Many streamers play their favorite music on their stream, whose rights are held by a variety of different record labels. (44) On top of streamer frustration, Twitch's lack of empathy and minimal guidance has made it even more difficult. (45)

      1. Safe Harbors for Streaming

         For Twitch to stay compliant and retain DMCA Safe Harbor privileges under 17 U.S.C. [section] 512, they must abide by its requirements. (46) These protections, affirmed by the Ninth Circuit, give streaming platforms more leverage and flexibility while also shielding them from potential liability. (47) The four specific categories providing protection to Twitch and other streaming platforms are listed in the first four subsections of [section] 512. (48) These protections are only as effective as their consumer, meaning that Twitch must provide takedown notices to infringers if they receive a notice from the copyright holder. (49)

      2. Fair Use Doctrine & Streaming

         The Fair Use Doctrine acts as a defense which allows streamers to stream the content and games, and play without suffering. (50) When applying the Fair Use Doctrine to streaming, it becomes less complicated when it is in its live form rather than an alternative form known as "Let's Play." (51) Specifically, for example, when it comes to music, Twitch details that uses of copyrighted material can qualify under the Fair Use Doctrine. (52)

      3. Article 13: Streaming in Europe

         EU Copyright Directive recently passed Article 13, which left European streamers open to liability and dissuaded them from streaming their gameplay on Twitch and other platforms. (53)

         With the enactment of this new directive, Twitch soon let its streamers in the EU know that they could be required to "impose filters and monitor measures on all works uploaded...." (54) Currently, the Directive requires that streamers and content producers provide licenses prior to using the material they plan to use. (55) Finally, if this Directive continues to pass without any initiative, it could lead to limitations on European users' access, or worse, a complete shutdown of content. (56) As many commentators express frustrations with Article 13, others believe that it will "finally pay its fair share." (57)

   4. Are Twitch's Terms of Service and Community Guidelines Enough?

      Terms of Service and Community Guidelines are required to be followed by every user whether streaming or simply just watching. (58) Terms and guidelines are enforced to protect streamers and users, but also penalize or even permanently remove users from the platform. (59) In contrast, Terms of Service are not truly enforceable as many "top streamers" have been able to keep streaming, while others have been permanently banned for similar or less extensive offenses. (60)

4. ANALYSIS

   1. Twitch: Before, Today, and Tomorrow

      In the...