The streaming service, which offered some 31 U.S. cities free access to the four major TV networks, reaching 2.3 million registered consumers, has stopped operating. A federal judge ruled Locast was violating TV networks copyright.
Locast argued that as a nonprofit organization, it is exempt from paying any fees that cable, satellite, or telco operations pay the networks, amounting to billions of dollars each year.
As it turns out, Locast made a tiny mistake, according to the judge.
Sure, the service was free to all consumers. All it needed to do was endure an advertising announcement every 15 minutes asking viewers to make a donation -- to Locast. If not, customers would have to pay a $5-per-month fee.
You need monetization somewhere -- even for nonprofits. Apparently, “free” isn’t completely “free.”
Locast isn’t the first to go this route. Others in the past have tried to get around TV networks' copyright protection -- some regular for-profit operations, like Aereo, which stopped some years ago.
In part, Locast said it was looking to cater to those TV homes that couldn’t afford paying high monthly cable bills -- or perhaps not wanting to delve into the growing and sometimes expensive streaming world.
We are talking not just cord-cutters. But cord-nevers. So this seems like a fair deal for the underserved.
Still, Locust was an online streaming service and that means customers need a broadband/internet connection — and that costs $20 to $80 a month, depending on what one can afford.
The TV networks and the judge believe Locast was just another TV player looking to nudge itself into the TV world, perhaps thinking this little niche area — digital access of TV stations — was a modest business.
As a nonprofit, there was a donation -- including a major one from AT&T for $500,000, according to one report. Late last year, company founder/chairman David Goodfriend said it was able to have “operational sustainability.”
Versus other operations of its kind, Locast positioned itself as “public service” to offer affordable access to local news for consumers. Guess that means a service with absolutely no strings attached -- not even a hint. A TV ad can remind one of that.