Video services

Omniverse CEO: 'I'm Doing Everything Literally by the Book'

DeMeo 'fed up' with criminal claims, calls lawsuit 'reckless'
So, why is DeMeo reaching out now and offering further comment on his company and the contract even as the case is still ongoing?

In addition to reacting to the blog post about Omniverse published Monday on Light Reading, DeMeo said he wants to illuminate some details about Omniverse's relationship with Hovsat and Hovsat's unique, super long-term video services contract. Plus, he's "just fed up with being compared to criminals out there. I just want the benefit of the doubt. I deserve that."

He called the ACE-led legal challenge "reckless," believing that it stems back to the suit that ACE lobbed at Dragon Box that resulted in a settlement and the shutdown of the service. (See ACE Slays the Dragon Box.)

"I'm against piracy," DeMeo said, noting that Omniverse only deals with live TV channels and that its distribution partners strike their own separate VoD movie package deals.

"I worked and distributed and handled intellectual property for multiple producers before I ever did this for a living," he said. According to his LinkedIn profile, DeMeo was the founder of New Media Buys, a company that distributes movies, TV series and other specials across various media platforms.

And to say DeMeo is confident that he'll win the ACE challenge is an understatement. "There's going to be so much egg on their face at the end of this, it's not even funny," he said, noting that his deposition is scheduled for March 9.

ACE said it could not comment further about Omniverse while the litigation is ongoing. The plaintiffs identified in the lawsuit (PDF) filed last month include Paramount Pictures, Columbia Pictures, Disney Enterprises, 20th Century Fox Film Corp., Warner Bros. Entertainment, Universal City Studios Productions, Universal Television and Universal Content Productions.

A big part of DeMeo's confidence is rooted by his and his legal counsel's understanding of the contract in question. Plus, he added, Omniverse has already defeated multiple cease and desist orders from major programmers after presenting them with the paperwork.

"Fifty percent of the channels that I provide have already sent cease and desists, and we've won," he said, citing Discovery Communications and Viacom among the examples. "They never went to court. We proved our agreements, and we passed." Discovery and Viacom have both been asked for comment to verify that.

"What nobody realized is that these [channels] aren't coming from Omniverse; they're coming from Hovsat" and they're being paid the carriage fees due to them, he said, adding later that he's endeavored to keep the Hovsat part quiet so as to not draw too much attention to the joint venture.

He acknowledged that the contract Hovsat has with DirecTV amounts to what many would call a bulk rate discount, with the intent of servicing various communities they developed around the nation. "But it's not a traditional MDU [multiple dwelling unit] deal," DeMeo stressed.

But how does Hovsat and Omniverse get around national digital/OTT distribution rights that typically are negotiated differently and aren't necessarily cheap?

"Because it was never in the agreement to begin with," he responds. "The only thing in that agreement is protecting their intellectual property; that's it... And we do [that] better than anybody... It was basically a national contract; it wasn't limited to DMAs [designated market areas] or OTT. Those terms, when they engaged into that agreement, didn't even exist." [It's not clear when Nielsen started to use the DMA term based on our research so far, but we've asked the ratings and audience measurement giant for assistance on pinning down a year.]

But it appears that programmers and studios tied to the ACE case don't agree with Omniverse's interpretation of the contract. DeMeo says he doesn't blame them. "My first gut reaction to this [contract] would be, this is dead wrong, based on today's contracts," he said while still holding firm on the belief that everything being done under that contract is on the level.

"I'm literally doing everything by the book," DeMeo claimed, noting that Omniverse pays all the requisite licenses, including those for metadata from Gracenote, as well as fees to patent/licensing clearinghouse MPEG LA (Omniverse is listed as an H.264 licensee that's in "good standing"), and that he even took SiliconDust, one of his distribution partners, to task when it appeared they might be out of compliance on something.

'Powered by Omniverse' a verification aid
The lawsuit argues that the video streaming services claiming to be "Powered by Omniverse" show that Omniverse is brazen and "not shy about their role" it plays with the alleged infringing OTT offerings

DeMeo said having its distribution partners label their services as such is a requirement and further serves as proof that he and his company are not trying to hide anything. In fact, he claims that the idea for that came from a lawyer with a programmer that thought that such labeling would make it easier for them to determine if a service was an authorized distributor or possibly stealing content. "It was great advice that they gave us, quite honestly," he said.

He's hopeful that this will all get resolved, and soon. "By the time this is done, they're going to happy, we're going to be happy and we'll all proceed," DeMeo said, adding later that Omniverse has a deal with a major US broadband company that has done its due diligence on Omniverse and "doesn't care about the lawsuit." (See Omniverse Will 'Engage Quickly' to Resolve ACE-Led Copyright Allegations .)

Dish & Cox M&A claims
Long before this recent legal dust up, Omniverse drew M&A attention from Cox Communications and Dish Network about five years ago when they were eyeing new ways to tackle the pay-TV market, DeMeo claims. (See Cox's Fledging OTT Service Flares Out.)

Cox, he said, "waved a check in front of my face" in the presence of one of their attorneys at a NATPE conference, while Dish made a play for Omniverse during at an annual event run by the now-defunct Electronic Retailing Association.

DeMeo said he shot down both offers. "I'm not looking at the exit. I'm looking at the long term," he said.

Cox and Dish were asked if they had any M&A-related interactions with Omniverse. Dish hasn't responded to that question, but a Cox spokesman said: "We regularly review many investment opportunities across our business and don't comment on any related rumors or speculation."

— Jeff Baumgartner, Senior Editor, Light Reading

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Jeff Baumgartner 3/6/2019 | 10:26:59 AM
Use of the DMA term Haven't heard back from Nielsen, but a source from the cable industry says he recalls using the term DMA since at least the mid-1980s, so that certainly contradicts  one of the arguments being made here. OTT, though... i don't recall that really being used much until around 2004 or so. JB

GilSanf 3/6/2019 | 1:48:08 PM
Good Omniverese reporting, badly needed Thank you, Jeff, for digging into the Omniverse story. The TV/media industry needs a good journalist to contact the key parties and get their stories.  Well done.
mpohlman 3/7/2019 | 10:16:11 AM
TOP US Cable Companies If the subscribers are being reported through HovSat?  How is it that HovSat is not listed as one of the top providers in the US in terms of subscriber counts?!?  Or at the very least, being mentioned as a disruptor or game changer in the industry for this record breaking growth and consumer-cost saving offering?!?  
macemoneta 3/7/2019 | 10:29:04 AM
Goes around, comes around This reminds me of the deals musicians, TV actors, and movie actors signed in the pre-digital era. Digital distribution was not covered for royalties, so performers weren't (arent) getting any. Now the shoe is on the other foot, and it's hard to feel any sympathy.
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