Hold On, FilmOn: Broadcast Networks Not Yet Becoming Cable Nets
Just when you thought all broadcast networks and stations might turn into cable networks and platforms in the near future, there was a somewhat unexpected legal loss for one company that was streaming over-the-air content without paying access fees.
The issue: Does an Internet company that transmits local broadcast signals provide “individual antennas” to consumers’ homes?
Los Angeles-based FilmOn said its FilmOn X service was using the same technology as Aereo, a New York-based company that previously won a few legal battles against broadcast networks and stations.
The Federal District Court for the District of Columbia issued a preliminary injunction last week against FilmOn X, which had previously been known by the somewhat confusing name of Aereokiller. Broadcasters had sued FilmOn for copyright infringement.
Back in December, a federal court in California said FilmOn had violated the broadcasters’ copyrights.
But in July, Aereo won its third consecutive victory in the Court of Appeals for the Second Circuit in New York, when the court declined to hear the broadcasters’ appeal.
What’s next? Possibly a Supreme Court hearing.
CBS and other broadcast networks have expressed the view that should the likes of an Aereo or a FilmOn X be allowed to go forward, the might become cable networks – so that nobody could take their network signals and distribute them via the Internet. without paying for the content.
FilmOn said it would continue to air independent TV stations that are not part of the lawsuit.
How much viewing of local broadcast stations comes over the Internet right now? It’s probably very limited. But this might change in the future. Some believe all TV programming will be distributed this way.
Turning any broadcast network or station into a cable network or channel would solve some of these problems -- as the broadcasters now believe they are content creators and should be paid for it.
Some 90% of U.S. TV homes now pay for TV content -- including broadcast stations -- through multichannel TV distributors.
Converting into a cable network would have its disadvantages. For example, ESPN -- perhaps the biggest, most widely distributed cable network -- gets into 98.5 million U.S. TV homes. CBS gets into 115.6 million,17% more, a disparity that is likely to stay that way.
A lot has been made of CBS getting over the next several years $2 a subscriber per month (up from 50 cents) from the likes of Time Warner Cable and others. As a cable network, CBS would seek much more since its advertising revenues would take big hit because of an expected smaller universe and lower viewership.
But is this a likely scenario -- or some kind of backhanded business threat? Right now a D.C. Federal Court has seemed to suggest broadcasters should hang on to their status quo dreams for a while.