An end-run around film parallel imports?

I've been annoyed about New Zealand's film classification regime for a while. I hadn't considered the copyright and licensing angle on it.

Recall that New Zealand generally runs a free parallel importation regime. If some brand wishes to enter into restrictive licensing arrangements for retail distribution, the New Zealand government generally sees no reason that it should go about enforcing those deals where they restrict Kiwis' access to imports. So if some retailer is the only officially licensed supplier of a brand of shoes, The Warehouse can still import a container load of them for sale in their stores. The producer can punish the wholesaler who sold the the shoes to The Warehouse, but there's no recourse in the New Zealand courts. Parallel importation is legal. There is a carve-out in which you cannot parallel import films for nine months after the films' first release anywhere in the world, to give some time for the theatres to have a go, but otherwise things are open. Here's MED's FAQ.

Now recall further that the folks with local distribution rights are mightily annoyed with parallel importation. And the film distribution companies that sell rights to Netflix prefer being able to engage in pretty serious geographical market segmentation. Where Kiwis can pretend to be American through use of ISP global modes, or Hola!, or any of the various other VPN arrangements, geographic market segmentation breaks down.

New Zealand's censorship regime then gives an end-run around parallel importation: you can't legally import a film that hasn't been classified here and you can't distribute one that doesn't have the New Zealand film classification. Having the US one isn't good enough. Where some NZ ISPs advertise a global mode that facilitates subscribing to Netflix, the Censor's Office reckons they're complicit in helping the importation of films that haven't been rated. I would have thought that 122 (3)(b) and 122 (4)(b) meant that ISPs couldn't be liable, but I'm not a lawyer.

And so it's all rather interesting that The Film and Video Labelling Body has weighed in on the Censor's Office's legal run against Slingshot and Orcon.

The Film and Video Labelling Body, an incorporated society whose members include the likes of Sony, Universal, Paramount, Spark and The Warehouse, does most of the legwork involved in issuing labels to non-R-rated films.

Operations manager Sharon Rhodes said it expressed concern to the Office of Film and Literature Classification about online services bypassing the New Zealand labelling system early this year, but had not specifically mentioned Slingshot or GlobalMode.

Spark, which launched online television service Lightbox in September, had raised concerns with the labelling body last year, she said. "I brought it up at our annual meeting in May and members were pleased to see it was something we were looking into."

Rhodes said she agreed with the chief censor's view that Slingshot had breached the Films, Videos and Publications Classification Act by offering GlobalMode as a means for New Zealanders to access services such as Netflix.

The cleanest solution? Fix the law so that a New Zealand classification is no longer required. Require instead that films carry the rating of any country's classification office from some list of countries whose classification decisions generally seem to make sense, or that tend to correlate strongly with New Zealand's prior decisions. It makes no kind of sense that a small country should re-classify every movie for the New Zealand market; we should be relying on others' work here.