Locast's Scorecard: 250,000+ People Registered, 0 LawsuitsLocast's Scorecard: 250,000+ People Registered, 0 Lawsuits
Unlike Aereo, Locast has found a way to stream local TV channels without raising the legal hackles of powerful broadcasters. But can it drive enough donation dollars to survive for the long haul?
June 20, 2019
Locast, a startup that provides streaming access to local TV channels in a growing number of markets, continues to succeed where others, such as Aereo and Ivi, crashed and burned.
It's still early days, but Locast appears to have found a way to stream access to those channels without having to dodge the crushing legal hammer of powerful US broadcasters.
Locast's angle into streaming local TV hinges on its position as a non-profit organization underpinned by donations that, it hopes, are enough to keep the service running. In its FAQ, Locast boasts that it did its homework in this area, noting that the copyright statute allows it to charge a "nominal fee" to "defray the actual and reasonable costs" for providing a digital translator service.
Locast delivers TV programming by first accessing the local over-the-air signal, transcoding it on a server and then handing it off to a content delivery network within a local DMA. Geo-fencing assures that only consumers in that local market can access the TV channels in a given market.
Figure 1: Streaming for DollarsLocast uses geo-fencing to ensure that its TV streams stay local. Pictured is a local Denver feed of CBS delivered to a web browser by Locast.
Locast has not yet received any warnings from broadcasters that they might challenge the legality of its offering, according to Locast founder David Goodfriend. Still, other industry experts see this as a temporary situation. In January 2018, broadcast industry vet Preston Padden tweeted a prediction that Locast will "almost certainly will be struck down by the Courts."
Meanwhile, Locast's service isn't nationwide yet. It has launched in several major US cities, including New York; Chicago; Houston; Denver; Dallas; Boston; Philadelphia; Baltimore; and Washington, DC. And just this week it added some more rural areas to the mix with the addition of Sioux Falls and Rapid City, SD. Locast estimates that its current reach is 24% of the US market, or roughly 27 million homes.
Update: According to Locast's markets page, the company launched services this week in San Francisco and Los Angeles.
Even as it looks to broaden its reach, Locast has already gained some consumer traction. In emailed responses to questions from Light Reading, Goodfriend said that more than 250,000 people have registered with their email addresses, and that Locast is seeing a steady increase in service usage as well as sign-ups.
Goodfriend declined to say what percentage of those users donate money to Locast. But he said he anticipates the service reaching "operational cash-flow break-even by the end of the year at current trends."
Locast also isn't saying how much it has raised via donations so far (The New York Times pinned it at about $10,000 some six months ago), but Goodfriend stressed that the amount coming in the door is "not enough yet because we still have to draw down on our loan" but more is coming in the door each day. He adds that Locast has also received a couple of "small donations from underwriters," but nothing sizable enough for the company to pay down its debt or launch to a lot of new markets.
Goodfriend told The New York Times earlier this year that Locast is also seeking corporate sponsorships and having talks with Samsung about integrating Locast on smart TVs.
Though a service like Locast would seem to appeal to cord-cutters and cord-nevers who want to watch local TV on a wide range of TV-connected and mobile devices or don't have access to a strong over-the-air signal, Locast is also getting the attention of pay-TV providers.
AT&T, for example, recently announced it has added Locast's app on its DirecTV and U-verse platform, an agreement that followed a similar one with Dish Network (Goodfriend confirmed that Dish is not a Locast investor). The Locast option could give pay-TV service providers some valuable leverage when they negotiate retransmission deals with TV broadcasters.
Goodfriend said Locast has reached out to many cable operators and other pay-TV service providers about integrating the service. "We want Locast available to everyone, everywhere, on any app platform," he explained.
While Locast does provide critical access to local TV for some consumers, it's not absent from criticism. In its review of the service, The Verge said the free aspects of Locast are appealing, but also was a bit rankled about the "catch" -- that consumers who don't donate will have their broadcast interrupted every 15 minutes by a request for a contribution before being sent back to the programming grid (rather than to the channel they were watching prior to the interruption. "[I]f you don't [donate], you'll find Locast's broadcasts practically unwatchable," the reviewer found.
Others, such as video streaming industry expert Dan Rayburn, have encountered problems with Locast's reliability and stability:
For all the hype around @LocastOrg's not-for-profit streaming service offering users access to local broadcast signals in select cities for free, it almost never works. Literally 75% of the time I try it, I get error messages of all kinds. And when it does work, constant rebuffer pic.twitter.com/jMVH89n823— Dan Rayburn (@DanRayburn) June 11, 2019
As a Denver-area resident, I have access to Locast and I've had a positive experience with it the handful of times I've used it. After a very brief sign-up procedure, I have had no issues spooling up live streams on Locast using a web browser. The Verge, meanwhile, found the quality of the stream "reasonable" without stutters and pauses.
— Jeff Baumgartner, Senior Editor, Light Reading
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