Courts Keep ivi's Internet TV Service Off

ivi Inc. 's Internet TV service must stay off, an appeals court ruled Monday. The ivi service, which captured over-the-air TV broadcast signals in Seattle, New York, Chicago and Los Angeles, and provided access to them via broadband-connected PCs for $4.99 per month, is not protected just because it was paying a fee to the U.S. Copyright Office.

A New York court originally ruled against ivi's service in February 2011, finding that ivi did not qualify as a "cable system." (See Court Cuts Ivi's Web TV Signal.)

Ivi's court battle started because broadcasters and studios get retransmission fees from cable operators and other pay-TV providers for the rights to distribute their content. Ivi CEO Todd Weaver argued that the company could operate its service without paying those fees. He said ivi was not violating copyright rules because it was paying $100 per year to the Copyright Office for a compulsory license.

But, on Monday, the U.S. Court of Appeals for the Second District upheld an early court decision that compulsory licenses were intended for localized redistribution and ivi's Internet distribution is too broad for what that particular kind of copy protection was intended to cover.

Why this matters
With ivi mostly dead, it will be interesting to see if the Internet-related aspects of its struggle have any bearing on the fate of Aereo Inc. , the Barry Diller-backed startup that uses a similar distribution scheme and is also being sued by broadcasters.

One major difference is that Aereo's system, currently offered only in New York City, uses an array of thumb-sized antennas to capture broadcast TV signals, and assigns each customer to an individual antenna. Aereo also endeavors to keep its service local by not selling access to people who don't live in the area. Aereo also claims that what it is selling access to infrastructure, not content. Of recent note, Aereo said it was acting in the public interest by allowing people in NYC to access its platform for free for an hour per day.

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— Jeff Baumgartner, Site Editor, Light Reading Cable

Cooper10 12/5/2012 | 5:22:40 PM
re: Courts Keep ivi's Internet TV Service Off

An interesting aspect of the ruling is that the court seemed to go out of their way to point out the burdens that ivi would impose on the broadcast business model as well as on copyright more generally.  Quote below 

"The strength of plaintiffs' negotiating platform and business model would decline," it said. "The quantity and quality of efforts put into creating television programming, retransmission and advertising revenues, distribution models and schedules -- all would be adversely affected," it added, but did not stop there. "These harms would extend to other copyright holders of television programming."

Doesn't seem to bode well for Aereo if the health of the broadcast business model is part of the criteria of the court...

Jeff Baumgartner 12/5/2012 | 5:22:37 PM
re: Courts Keep ivi's Internet TV Service Off

Yes, I would agree that that part of the ruling would also worry me if I was Aereo.  Even though Aereo got the stay, it's nowhere near out of the woods yet. The myriad aspects of this latest ruling against ivi would appear to make things look a bit bleaker for Aereo.  But if I'm ivi, i'm also rooting like hell for Aereo. 

The cable guys, meanwhile, have to sort of feel conflicted about the Aereo thing. Its presence could give them leverage in retrans negotiations, but Aereo still offers some competitive worries. Then there's Comcast... the cable guys don't like paying high retrans fees, but the NBCU side gets the benefit. JB


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