TV Network Exec Argues That Anything That Causes Cable Subscribers To Cut The Cord Is Illegal

from the felony-interference-with-a-business-model dept

Okay, let's start this out right by noting that the headline is only slight hyperbole. We've already talked about the TV networks suing Aereo for letting people connect, via the internet, to a TV antenna that picks up over-the-air (i.e., free) TV programming in NYC. I still can't quite figure out what the legal argument is here, other than that it upsets their business model. Watching over-the-air TV programming is, obviously, perfectly legal. We've yet to see a competent claim that place shifting legal TV is illegal. About the only real complaint is that this has the chance to drive more people to cut the cord, rather than pay ridiculously high cable/satellite TV prices. Of course, the networks these days thrive because of the insanely high carriage fees they get to charge the cable/satellite guys to include their network programming.

But, you know, disrupting the TV networks business model isn't illegal.

Yet, as with the DISH Networks case, wherein the networks seem to be claiming that skipping commercials is illegal, the networks in the Aereo case don't seem to have much of an argument other than "this disrupts our business model."

In a hearing about whether or not the court should issue a preliminary injunction (as has happened in the similar, but different in important ways, ivi and Zediva cases) the judge didn't just roll over for the networks, and allowed Aereo's lawyers to grill an exec from CBS, who more or less admitted that they think (1) the DVR is a bigger threat than Aereo and (2) that their main issue is that Aereo may lead to more cord cutting.

But, again, getting more people to cut the cord isn't illegal. This is, once again, appearing like a "felony interference with a business model" case. The network exec actually tried to make the argument on the stand that the fact that someone might cancel their cable subscription to use Aereo (cord cutting) is a form of "harm" that requires Aereo be shut down by preliminary injunction. Thankfully, the judge wasn't buying that logic:

The judge also got into the act somewhat, addressing broadcasters' insistence that any customer who cancels his or her cable service to sign up with Aereo is a problem. How does subtracting one subscriber impact advertising, asked the judge, which caused the CBS executive to admit that it would have to be one Nielsen household that canceled for impact, and later that it would more likely have to be a substantial number of defections.

There was some other damning info that came out in the hearing, including the fact that the TV networks refused to even talk to Aereo, never sent a cease & desist, and only decided to sue once they found out that Barry Diller was backing Aereo. Hopefully, the judge refuses the injunction. At the very least, it's good that he's not willing to just roll over and kill innovative startups because they mess with the entertainment industry's business model.

Filed Under: barry diller, cord cutting, television
Companies: aero, dish networks

Networks Go After Barry Diller Personally For The Insult Of Investing In Aereo

from the getting-desperate dept

It's amazing just how desperate the TV networks appear to be getting. We've already discussed how they've sued Aereo, the company that sets up individual antennas to get over the air broadcasts, and then streams them over the internet to people's homes. But, now they appear to be going after Barry Diller personally for investing in Aereo. They've subpoena'd info from him directly including:

All documents concerning Aereo or the Aereo service, including without limitation (i) communications with or about Aereo, the Aereo service or Aereo’s business plans, (ii) presentations or other documents received from Aereo, and (iii) documents or communications concerning the potential impact of Aereo or the Aereo service on broadcast television networks and stations, or the producers of broadcast television.

Diller is fighting this (as you can see below) but it's a pure intimidation technique to go after those "in the fold" who invest in disruptive innovation. We saw it a decade or so ago when some major labels sued Bertelsmann -- one of their own who broke ranks to invest in the original Napster. Investors are supposed to be protected from the actions of the companies they invest in, but the dying entertainment industry folks play nasty, and they especially seem to hate it when one of their own becomes forward looking, rather than playing their myopic game. In this case, they haven't sued yet, but it's clear they're going on a fishing expedition to embarrass and annoy Diller, who (of course) came out of Hollywood in the past.

Update: Looks like Diller's already lost this part of the legal fight, which is unfortunate. Intimidating investors from funding innovative companies -- the kind of companies that actually can help move the industry forward -- isn't going to help anyone. Amazing how short-sighted Hollywood can be.

Filed Under: barry diller, intimidation, streaming, television

Barry Diller Tries To Explain To Ari Emanuel That He's Wrong About 'Piracy' Being A Problem For Movies

from the get-past-it dept

Ari Emanuel -- famous for being either the Hollywood agent that Jeremy Piven's Entourage character is based on or being the brother of former White House chief of staff, now Chicago mayor, Rahm Emanuel -- has been banging the drum about the "evils" of file sharing in movies for a few years now. Multiple times he's made it clear that he was using his connections in DC to tell the federal government it needed to pass strict new anti-piracy laws that would make everyone else responsible.

So, it's little surprise that he trotted out the same tired, uninformed line at a recent conference. What was a bit surprising was to see Barry Diller push back on this. Diller -- the same guy who insisted that "free content is a myth" -- apparently told Emanuel that file sharing was no big deal, and that it wasn't a "threat" to the industry. Diller seemed more "concerned" about Netflix, which seems pretty silly (yet another example of the entertainment industry hating on those who actually innovate).

However, the two of them had a little debate with Emanuel insisting "the government has to get involved":

Piracy “is going to happen,” said Diller. “They’re making films available for streaming. As we go, you will see more distribution digitally. Piracy is a risk, but it’s small.”

The chairman of WME countered with Hollywood's party line:

“You can’t say piracy is not an issue,” he said. “I don’t believe it’s going away, it’s a big issue. The government has to get involved.”

Of course, that ignores that the government has been involved. And it's been involved in a big bad way... and it's had almost no impact. Even more amusing is that Emanuel mocked a new Hollywood Reporter person who was on the panel saying:

“I don’t want to give you a lesson here, but the business of the movie business is DVDs.”

That's amusing, because if Emanuel had his way a few decades back, when the movie industry insisted that VCRs were simply pirate devices, there would be no DVD market. It was out of an "infringement device" that a massive new opportunity was created, which Hollywood fought tooth and nail until it finally realized it could profit (and profit massively) from it. Yet, now, with absolutely no basis, Emanuel wants to repeat the same claims all over again.. and even more ridiculously use the DVD to support his position? Ari may be able to negotiate great deals for his clients, but he doesn't know what he's talking about on this subject.

Filed Under: ari emanuel, barry diller, movies, piracy

Barry Diller Is A Myth

from the as-much-as-free-content,-at-least dept

Barry Diller has apparently declared that "free content is a myth." Good thing you can read about it -- for free -- online. A little suggestion: it helps not to declare something a myth when it's already a fact and already widespread. But, just to see how it works, I'm calling Barry Diller a myth. That's about as accurate as calling free content a myth -- but if he can get away with it, I should be able to also, right?

Filed Under: barry diller, free content

Making Sense Of Diller's IAC Breakup: Buy Low, Sell High

from the keep-making-deals dept

For years, we've joked about how Wall Street's dealmakers don't care if they're merging companies or breaking them apart: they have a script for both. When there are merger opportunities, it's all about the "synergies" of companies working together. When it's time to break them apart, you talk about "releasing shareholder value" that is hidden within the larger company. All it really means is another opportunity for another deal -- with the Wall Street folks taking their cut whichever direction things are going in. The latest to go through this pendulum is Barry Diller's IAC -- which has always been an odd conglomeration of internet companies. For years, we've wondered where all the synergies were that Diller promised the world when he started putting them all together -- and the latest answer apparently is that even Diller doesn't know. He's going to break the company up into five separate pieces in order to, yes, you guessed it: "increase shareholder value." While some are saying that this is classic Barry Diller -- a sign that he's more of a dealmaker than an executive, the timing of this might not be so crazy. After all, Diller did most of his buying during the dot com downturn, when many of the properties were undervalued. These days, with all the talk of the new bubble, and new enthusiasm on Wall St. for internet plays, the opposite is true. So while we tend to snicker at the "merge 'em up, break 'em down" thought process that goes into these efforts, in this case, it might actually make sense.

Filed Under: barry diller, conglomerates, mergers, spinoffs
Companies: iac