The media business is no stranger to legal proceedings. Now some renegade Internet video services are tossing a new wrench into the works, challenging the broadcast networks by running network and local TV programming online -- with essentially not one business agreement with those networks or stations.
Services like Los Angeles-based FilmOn and Seattle-based ivi TV say they have this right under the compulsory copyright laws. That means all they need to do is contribute some tiny dollar amounts to the U.S. copyright service and be covered.
They claim cable operators started the same way and the courts eventually let them do it -- so why shouldn't Internet video companies do the same thing?
Retransmission consent, you say? The founder/CEO of ivi TV says sure -- but it better be for the right price. These new video providers want to be another distribution spoke in the wheel, after cable systems, satellite systems and telco video programming services.
My question: Why hasn't anyone done this before? The Internet has been around for quite a while. Did these services only figure this out now -- or perhaps are they brazen enough to have found a legal loophole, vamping long enough until TV networks somehow go along?
Publicly, traditional TV networks will tell you it's all about the content. As long as they keep making good shows, there is little to worry about. They want to be everywhere the consumer is.
Privately, however, other executives say there is lots of panic. Traditional TV-based media companies aren't sure where to place their emphasis. Hulu? Not for everyone -- CBS doesn't see a business here yet. Apple TV? Maybe. Not for everyone, either. Ninety-nine cent rentals are too cheap for NBC.
Now look at mobile TV. Didn't many major broadcast/cable networks make deals with Qualcomm's FloTV, the mobile TV packager? Now that company seems to be ending. What does this leave those network brands? (I agree with MediaPost columnist Steve Smith: Maybe we don't need every single TV program to be fed live to us in our pocket).
Still, those mobile deals were more straightforward ad revenue share deals. The angel investors of these daring Internet video companies must have iron-clad stomachs. These companies seemingly start with a heavy legal business plan. Ivi TV actually sued the networks first, as a pre-emptive move.
Todd Weaver, chief executive officer of ivi TV, says the competition isn't the broadcast, cable networks, or local TV stations. It's cable operators -- just as the satellite programming services DirecTV and Dish positioned themselves when they started up.
Competition is good. But broadcast "content" is increasing just "content. In a world of escalating media choices, old FCC rules that hang on the "public airwaves" laws are quickly looking very tired and out-of-date No one should get something for nothing.