This ruling, according to Josh Lerner, Harvard Business School’s Professor of Investment Banking, had a huge impact on U.S. venture capital moving to cloud computing. A risk was removed. In Europe, where the ruling had no authority, the venture investments in the cloud were much less. This is an important economic topic and ruling due to the relationship between venture, innovation and job growth. The ruling might also be relevant in Australia where Optus is facing the same legal challenge today. They started a service in July called Optus TV Now that does essentially the same thing as Cablevision’s. Allowing customers to record and watch the 15 free-to-air stations that are available. Customers can watch the content directly or over their smartphone or computer via the internet. In their July announcement they even included, ‘it is a breach of copyright to make a copy of a broadcast other than to record it for your private and domestic use. Optus accepts no responsibility for copyright infringement.’ Well, the owners of the copyright material being stored and retrieved are saying breach, especially the AFL and NRL, the football and rugby leagues. Optus is saying it’s no different than people recording on a personal DVR at home. It’ll be interesting to follow this.
Back to the ‘funding the cloud’ story. Lerner’s study, 'The Impact of Copyright Policy Changes on Venture Capital Investment in Cloud Computing Companies,' he examines the impact and effect of the US Second Circuit Court of Appeals decision. The authors found that the decision led to additional incremental investment in U.S. cloud computing companies compared to Europe. Figure 1 of their paper:
The same growth did not occur in Europe and in some cases, these types of services have been blocked from even getting to market. Imagine how much different services from Amazon, Apple and Google would be if the court did not reverse the 2007 ruling.
- Clouds, copyright and venture capital: a multibillion dollar nexus?
- Optus offers free-to-air TV recording for those on the go
- Technology Neutral Copyright has a Positive Impact on Investment, Job Creation and Innovation in ITC
- The Cloudy Enterprise: Hours More Important Than Dollars
- The Business Intelligence--Cloud Paradox
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