Company Claims Legal Right To Stream Broadcast TV Online; Broadcasters Disagree

from the ah,-copyright-loopholes dept

Wed, Sep 22nd 2010 5:50pm — Mike Masnick

Here's a fun one. Just as Hollywood is getting especially freaked out about TV shows being available online, and is pushing for this new censorship law to block any site that points people to such video content, a Seattle company named ivi is brashly declaring a legal right to stream broadcast TV online. After the company launched a few weeks ago, it almost immediately received cease & desist letters from NBC, CBS, Fox, Disney, MLB and others. So, it's decided to step up and file a lawsuit to get a declaratory judgment of non-infringement:

The company is clearly trying to milk this for the publicity (they sent us the press release about the lawsuit trying to drum up attention). What's interesting, of course, is the legal "theory" behind this. Basically, they point to Section 111 of the Copyright Act, which allows for "secondary transmission" of certain over-the-air broadcasts for a nominal fee to the Copyright Office. The intention behind Section 111 was to let cable providers rebroadcast local network television to cable customers, without having to negotiate with every local TV station. Whether or not that also applies to a company like ivi broadcasting online... is an open question that the court will have to settle.

That said, this does seem like a lot of hype over not very much. While the company has suggested in interviews that it intends to offer cable channels like ESPN at some point in the future, right now it only offers retransmission of broadcast network TV -- as that's all that Section 111 is designed to cover. If it wants to offer any other channel, it's either going to have to work out some sort of deal (highly unlikely) or come up with some other legal loophole (which probably won't work). The company's business model is to charge users a monthly fee to get this content -- which seems like a pretty big request, considering most people can get network broadcast TV for free. Perhaps it's appealing to Americans abroad who want to watch their local news back home, but that seems like a limited market.

Of course, the company does make the quite reasonable argument that the content it's retransmitting is available for free, they are showing all of the commercials, and they are reporting their viewers to Nielsen, so it is difficult to argue what these networks are actually losing by allowing ivi to go forward. I'm sure the TV companies' response is that it's somehow "taking" their right to try to charge for programs online via sites like Hulu, but that's not that compelling an argument. If something like a Slingbox is allowed -- where I can set up a system to retransmit the TV service I receive in my home to my internet connected device, perhaps there is an argument that a network-connected Slingbox is equally legal. To some extent, you could see a second version of the famed Cablevision lawsuit, which questioned whether or not you could set up a remote DVR. If that's legal, perhaps a remote Slingbox would also be legal... There have been a few companies that have simply set up remotely hosted Slingboxes, which resulted in some public griping, but I'm not aware of any actual lawsuits. Thus, it could be interesting to see where ivi goes with this...

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Filed Under: cable, copyright, secondary transmission, web
Companies: ivi

21 Comments

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ChurchHatesTucker (profile), 22 Sep 2010 @ 6:03pm

This may have legs
"The company's business model is to charge users a monthly fee to get this content -- which seems like a pretty big request, considering most people can get network broadcast TV for free."

A lot fewer people can get all their stations over the air, thanks to HDTV's crappy signal (trust me: we've about given up on broadcast TV since the changeover.) I can see this working, if their prices are significantly below cable's. And once they get an established audience, at least some cable channels my well come onboard.
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ofb2632 (profile), 22 Sep 2010 @ 6:06pm

big vs little
I want them to win the lawsuit just because it will be a bite in the ass to the big corporations that are used to bullying anyone that they see as a threat to their bottom line.
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Dan J. (profile), 22 Sep 2010 @ 6:42pm

Re: This may have legs
Another big draw is sports. A lot of sports games are only available in the team's local area. If you're out of the area and want to watch it, you must pay up for the privilege to do so.
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Anonymous Coward, 22 Sep 2010 @ 6:46pm

This is "free" TV, afterall
IVI should win.

This is broadcast TV, which anyone can watch with nothing more than an antenna.

I cringed at NBC hassling the cable companies in all those ads over their license deal recently.

Why should IVI or the cable company or even any satellite company have to get permission to send those shows to their subscribers, many of which could easily pick up the very same TV shows with an antenna. Free, with commercials.

The viewers pay for the shows when they receive the commercials. With eyeballs. And no, they can't *make* you pay attention to the commercials.

Why should IVI or anyone pay anything at all to a broadcaster, who has a broadcast license and uses the public airwaves in the public interest? They shouldn't, and no one else should have to pay for broadcast TV regardless of how they get it delivered.

The principle here is broadcast TV is "FREE", which is the cost of having that FCC license.

If the TV companies want their content to be paid for they should give up their broadcast licenses and become purely cable/satellite content providers. Then they can charge for their content if anyone will pay. Prevent anyone at all from seeing it if they want.

If I put up an antenna or watch online or even subscribe to cable or satellite nobody with a broadcast license should be able to prevent anyone from watching that content.
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Anonymous Coward, 22 Sep 2010 @ 7:32pm

Keep in mind that the networks are paid a certain amount of money by the cable company, so they are still losing a sometimes small, sometimes large amount of money depending on the channel when people don't subscribe to cable TV.
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Ren� (profile), 22 Sep 2010 @ 7:39pm

Techdirt: Perhaps it's appealing to Americans abroad who want to watch their local news back home, but that seems like a limited market.

It might look limited if you look at percentages, however, if you look at absolute numbers, it's actually a lot of money being left on the money on the table. As an example, The Filipino Channel (TFC) earned 10 million US$ in 2007 from DirecTV licenses for programs from a single Filipino network (ABS-CBN). Surely, there are a lot of American expatriates that want their hometown's local programming. Long tail works with broadcast TV, too.
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Anonymous Coward, 22 Sep 2010 @ 7:58pm

This link is hilarious. The entire article is, as expected, entirely one sided in one direction. Doesn't mention the problems of our copyright law (ie: insane length), doesn't mention that our founding fathers were critical of copyright law, doesn't mention that copyright is really an unowed privilege, doesn't mention that Hollywood is partly responsible for the existence of these outrageous laws, only complains about piracy. Then the comments are exactly the opposite.
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Anonymous Coward, 22 Sep 2010 @ 8:18pm

Who cares about abroad?
I live in the Seattle area and if I could get this to work on my Roku, I would gladly pay $5 a month. I live in an area where the broadcast signals vary greatly from minute to minute. Do you know how frustrating that is? $5 is worth the convenience and I know I have several clients who would agree.

Travel would be nice as I take my little box every where with me.
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Anonymous Coward, 22 Sep 2010 @ 8:23pm

Re:
The cable companies should not be paying for over the air TV.

As long as they just send it on to their viewers and don't charge a special charge for it, they shouldn't pay any more than anyone would pay to view those networks using an antenna. Nothing.
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Anonymous Coward, 22 Sep 2010 @ 8:23pm

Re: Who cares about abroad?
Also, the lawsuit is pointless, the local operators hooked up to IVI http://www.ivi.tv/content_owners/connect_via_encoder or hooked up over the air boxes to them.
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ChronoFish (profile), 22 Sep 2010 @ 9:04pm

Re: Re: This may have legs
Sports - specifically the NFL - is exactly what I had in mind when I read the article.

I live on the East Coast - but I am from Colorado and naturally a Denver Bronco fan. I don't have cable. So I don't get to watch them very often. If they play NE - then a local bar will tend to show it.

This service would be brilliant if it proves legal. I would be able to get news/real-time sports/and watch shows on the broadcast day rather wait a day later through Hulu or other means.

I will have to follow the story.
-CF
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Ryan Diederich, 22 Sep 2010 @ 9:32pm

Advertising...
I have a question, dont you think that tv channels charge companies advertising rates based on the number of viewers?

Dont you think that in a densely populated area they charge more money per second than an area of low population density.

Since broadcast television takes in at least most of their revenue from advertising, which means that their revenue is directly proportional to the number of viewers.

With many people disowning their broadcast companies, doesnt it stand to reason that they would be interesting in gaining a few viewers.

Reasoning? in a company whose original world war 2 veteran owners are long dead and the spoiled mass of baby boomers has taken over? I think not.

-RD
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cc (profile), 23 Sep 2010 @ 3:38am

If you think about it, this *expands* the TV networks' potential market quite a bit, as these days there are a lot of people who have computers, but don't have TVs.

In fact, internet TV is clearly the next step in the evolution of broadcast TV, and it could probably be done efficiently enough using some clever multi-cast technology -- but the broadcasters need to be willing to innovate before that happens. As things are, the way the broadcasters work is so entrenched that most of them will *never* innovate, unless somebody like IVI comes along and shakes them up a bit.

I'm rooting for IVI. They certainly have balls.
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Casey (profile), 23 Sep 2010 @ 6:28am

What about retransmission consent?
Under the Cable Act, cable companies can't "retransmit" broadcast stations without the station's consent. I wonder why ivi believes it is not subject to retransmission consent as well, particularly since it seeks to rely on Copyright Act provision designed for cable companies. Seems like they shouldn't be able to have it both ways.
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AW, 23 Sep 2010 @ 6:54am

Ummm, there are already a large number of websites that do this, some of which have been around for a while. Not sure why exactly this is news. A lot of companies charge up to $40 a year for this service.
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Hephaestus (profile), 23 Sep 2010 @ 7:16am

I really hope the succeed
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Laura, 23 Sep 2010 @ 7:44am

It's about LOCAL advertising
You're all forgetting what this is REALLY about -- LOCAL ADVERTISING. The networks have LOCAL affiliate stations that broadcast LOCAL commercials. If you're in Los Angeles you see commercials from businesses, etc. that are in your area. You can't show New York commercials in Los Angeles, and vice-versa. IVI would have to become, in effect, a local affiliate of EACH NETWORK and distribute the same commercials that are shown by each network's local affiliate station. IVI's current business model won't work because viewers in other locales would not be seeing the commercials for their area -- which is not going to work for the local affiliates, who will lose advertising dollars because people are watching online vs on their TVs.
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DS, 23 Sep 2010 @ 8:31am

I've always wondered how giving away something for free that was given to you for free was illegal. Or how giving away something that you paid for to someone else who paid for it as well.

As long as I have the legal right to watch something, and as long as I have th legal right to record something, why or how does the courts get tangled up in where that recording originated?
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Anonymous Coward, 23 Sep 2010 @ 7:22pm

Re: It's about LOCAL advertising
Who cares, public airwaves don't inherently belong to anyone. They inherently belong to everyone and, as such, we all have a right to broadcast on it, watch what's broadcasted on it, record what's on it, and redistribute what's on it via the internet or however we feel. Our broken law may not think so but the law needs to change. It's not the laws responsibility to provide anyone with a living by providing them with a business model that provides them an unowed and wrongful monopoly on public airwaves. It's the govts job to act in the public interest, not in the private interest of someone who wants a monopoly on public airwaves.
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Anonymous Coward, 23 Sep 2010 @ 7:31pm

Re:
Exactly, public airwaves were freely given to the govt - corporate complex. If neither person A nor person B have an inherit right to my house then person A can't simply give person B my house just because person B paid person A for it. They must ask ME for my house and ask ME for payment and I must agree.

I never agreed to give my right to freely use public airwaves away to the govt and neither have I agreed to give those rights away to the corps that bought it from the govt. So some entity, the corps, supposedly paid for their legal right to take away my inherit right to freely use public airwaves however they wish. They paid who? The govt. and did the govt ever consult with me before taking away my rights. no? Then, as far as I'm concerned, the corporate/govt complex were freely given our rights to public airwaves without our consent. and, heck, the only thing the public gets in return is taxed.

and yet, the corp/govt complex feel that they can charge for my use of something that they were freely given? Public airwaves were freely given to mankind, no corp/govt complex should be allowed to charge for their use.
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