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Who 'Owns' Omniverse's OTT-TV Customers?

Jeff Baumgartner

As more details emerge about how Omniverse One World Television operates its relatively inexpensive TV streaming video service, a big question I've been getting from readers a lot is: Who "owns" those customers?

From the outside looking in, the answer isn't immediately clear. As we reported earlier this month, Omniverse says it has a joint venture with HovSat Inc., a New Jersey-based private cable operator that, according to Omniverse top exec Jason DeMeo, has a 100-year contract with DirecTV that originates with Hughes and apparently takes advantage of some economically advantageous bulk video rates on a nationwide basis. (See Omniverse CEO: 'I'm Doing Everything Literally by the Book' and Is Omniverse Sourcing Video Feeds From DirecTV? )

While the details of that deal are open to interpretation -- Omniverse is being challenged in court by The Alliance for Creativity and Entertainment (ACE) over claims that the company is violating copyright -- the result so far is that this contract and the JV between Omniverse and HovSat has paved the way for several partners to sell and market OTT-TV packages. Examples of those include Clikia, SiliconDust's HDHomeRun Premium TV, Flixon, SkyStream and VivaLive TV. (See Big Programmers & Studios Bring Hammer Down on Omniverse .)

According to DeMeo, HovSat and the joint venture with Omniverse essentially own the customer. "We don't relicense content," he said in a recent follow up interview. "We don't have the right to do that, number one. Number two, if we're not relicensing the content, then... our resellers or marketers couldn't own the customer, technically."

So, how do those resellers make money?

"They're all commission-based," DeMeo said, noting that they are paid commissions as digital storefronts. "The closest thing we mirror is prepaid mobile."

Privately-held Omniverse won't say how many pay-TV customers it has via its partnership with HovSat, but it's not alone in its focus on the prepaid video market. That's also the angle being taken by Vidgo, a relatively new, national virtual MVPD. Comcast also offers prepaid TV and Internet services inside its footprint. (See Vidgo Soft-Launches National OTT-TV Service .)

As Omniverse faces the legal challenge lodged by ACE, DeMeo continues to insist that what he is doing is legal, and is angered by those who are casting him and his company as a pirate or are making comparisons of Omniverse to Dragon Box, SetTV or Tick Box -- three services that have settled copyright-related lawsuits and have since been shut down. "I'm offended by the comparison," he said. (See ACE Slays the Dragon Box and TickBox to Pay $25M to Settle Video Piracy Lawsuit .)

"At the end of the day, we're paying everyone what they're due," DeMeo said. "We're paying our way and our licenses and bandwidth charges. We've invested millions of dollars in infrastructure."

He estimates that Omniverse's bandwidth costs alone run more than $100,000 per month, and that all of his company's retail streaming partners have to be verified with Toronto-based SotalCloud, one of Omniverse's streaming technology partners.

"Every time a stream goes out, it costs us money," DeMeo said.

— Jeff Baumgartner, Senior Editor, Light Reading

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