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.
- Aereo Offers a Free Taste
- Court Cuts Ivi's Web TV Signal
- Q&A: ivi Inc. Founder & CEO Todd Weaver
- ivi TV: We Gained From Cablevision-Fox Spat
— Jeff Baumgartner, Site Editor, Light Reading Cable