FilmOn.com joins ivi TV in claiming status as cable carrier, streams OTA broadcast content online
Online service = cable company? The concept has yet another proponent – FilmOn.com, Inc. (FilmOn). Launching an online service featuring over-the-air content (in late September, just in time for the start of the new TV season), FilmOn has joined ivi TV in the fray over the alleged right of the upstart online companies to webcast broadcast programming to subscribers. And already FilmOn is on the wrong end of a lawsuit brought by folks looking to nip that claim in the bud.
The result could accelerate a final and authoritative disposition of the issue, one way or the other.
When I wrote about the ivi case recently, I tried to be clear that ivi’s approach to copyright could radically alter the broadcast carriage landscape. It’s not that ivi’s approach is a sure-fire winner – far from it. But in its request for a declaratory order (filed in a Federal court in Washington State), ivi has squarely posed an important question: is an online video delivery system the legal equivalent of a cable company for purposes of retransmission rights under the Copyright Act?
Earlier this month, broadcast networks (i.e., ABC, CBS, Fox, NBC) and other content providers opened their own offensive: they sued FilmOn for copyright infringement in Federal court in New York. (The networks have sued ivi in New York as well.) Their claim is essentially the polar opposite of ivi’s: according to the broadcasters, online streaming of over-the-air television programming without the specific consent of the copyright holders constitutes infringement.
The legal issues may be the same as in ivi’s Washington case, but the roles have changed. In the FilmOn litigation, the broadcasters are the ones who are affirmatively seeking the court’s blessing of their position – as well as an injunction preventing FilmOn from continuing its service and an award of damages and attorneys’ fees.
There may be some differences between the services ivi offers and those that FilmOn offers, but those differences are essentially trivial. Basically, we’ve got two companies each charging a subscriber base for access to copyrighted broadcast network programs being streamed over the Internet. Though they may ultimately advance different legal arguments in support of their respective claims, each company’s business model will ultimately depend on their obtaining some governmental imprimatur – from the courts, or the Copyright Office, or Congress – that online distribution is the functional equivalent of a cable system.
If either ivi, or FilmOn, or both succeed in getting such an imprimatur, the result will have far-reaching repercussions for the redistribution of broadcast programming.
And even if both ivi and FilmOn end up striking out, that’s not likely to put an end to the argument. More and more television is being consumed online. As a result, even if ivi and FilmOn both bite the dust, I won’t be surprised to see other pop-up entrepreneurs – or even cable companies themselves – adopt similar online delivery methods under the general “cable system” rubric. And if either ivi or FilmOn eventually prevails with its position, it’s an odds-on mortal lock that other companies will be jumping on the bandwagon.
In other words, the bell announcing the ivi/FilmOn approach has been rung, and it’s impossible to un-ring it. The argument that online distribution is the equivalent of a cable system for copyright purposes is not likely to go away unless and until it is finally resolved in some manner. Such resolution could possibly be achieved, or at least jump-started, by negotiation among the various interest-holders – programmers, broadcasters, would-be online services, etc. Such private resolution would, however, require major league moves by all parties away from their currently dug-in positions. It might happen – particularly if the general video audience continues to embrace Internet delivery of programming – but for now all sides have staked out their positions in their respective court cases, and they’ll probably be inclined to let those ride for a while.
There is one intriguing aspect of the ivi and FilmOn lawsuits, though, which could move things along some. Recall that the ivi-initiated suit for declaratory relief was filed in Washington State – in the Ninth Circuit – while the broadcasters’ suits again ivi and FilmOn were filed in New York, i.e., the Second Circuit. If both cases wend their way through the trial and appellate processes in the ordinary course, we are looking at the likelihood of two separate Circuit Court decisions on essentially the same issue.
Imagine, just for a moment, that one of those circuit courts rules for the broadcasters while the other circuit says that the online service does qualify as a cable system under Section 111 of the Copyright Act, just like ivi and FilmOn claim. With that you would have the classic “circuit split” situation that often justifies Supreme Court review. In fact, I think the Supreme Court would have to resolve this split – 100% lock that they take the case in my mind – because of the nationwide (indeed, ubiquitous) reach of online webcasting. And, regardless of how the Supremes might rule in such a case, the losing industry would probably seek some legislative reversal through amendment of the Copyright Act (as happened in the case of satellite carriage of broadcast programming).
There are potential endgames aplenty here. Expect to see them played out in the near term.
[Interesting factoid: FilmOn is the brainchild of Alki David, who is reportedly a “billionaire heir” who offered $1 million to the first person who would streak in front of President Obama with “Battlecam.com” written across the streaker’s chest. Battlecam.com is a “video-sharing community” linked to FilmOn.com. At least one contestant has attempted the stunt so far.]