Locast told registered users today that it has stopped inserting ads that would interrupt live TV programming delivered on its platform every 15 minutes, as the streaming video company seeks to remedy a court ruling that put its local TV broadcast signals in jeopardy.

Prior to today's decision, Locast users were interrupted with the money-seeking messages unless they agreed to make a "donation," starting at $5 a month.

Figure 1: Locast's has halted the practice of interrupting live broadcast TV programming with messages seeking donations among viewers who did not make an optional monthly donation of at least $5 per month. The screenshot above is an example of the donation-seeking message Locast was posting every fifteen minutes on broadcast TV feeds prior to this week's court ruling.
(Image source: Locast)

Locast's decision effectively means the service will now run in an uninterrupted form, whether or not the viewer opts to make a donation. The move appears to be Locast's first attempt to counter a court decision handed down Tuesday. The court found that that Locast, a service that provides free streams of local TV broadcast network signals, is not exempt from a copyright exemption that is largely set aside for nonprofits.

The New York federal court, which took on the copyright case brought on by ABC, NBCU, Fox and CBS, effectively viewed Locast's model as a "freemium," whereby viewers had to pay the donation to get the full services/experience. According to the court's partial summary judgment, Locast's total costs in 2020 were $2.43 million, and total revenues for 2020 were $4.51 million ($4.37 million from users and $147,161 from other sources).

"Based on the undisputed facts, it is clear that the Locast service is not offered without charges other than those 'necessary to defray the actual and reasonable costs of maintaining and operating' its service," Judge Louis L. Stanton wrote. "It is of no consequence that a number of users employ the service without paying."

Locast made an attempt to cut through and explain the court's decision to its registered user base.

"The court concluded that by interrupting programming to ask users for donations, and by suspending those interruptions based on whether a user makes contributions, Locast actually was charging a fee, not merely seeking a voluntary contribution," Locast explained to registered users in an e-mail issued Wednesday afternoon. "The court then concluded that revenues Locast collects in this manner exceed the cost of operating the service because funds are used to add new markets, rendering Locast ineligible to use the copyright exemption for non-profits (17 U.S.C. 111(a)(5))."

While Locast acknowledged that it disagrees with the court's interpretation and reiterated that it is exploring legal options to contest it, "out of respect for the court's order, Locast is suspending immediately all programming interrupts to request donations."

Figure 2: In an email distributed Wednesday, Locast informed registered users of its decision to suspend donation-seeking ads that would interrupt live TV programming every 15 minutes.
(Image source: Locast's email to registered users)

For now, this means any person located in a market Locast services will get the service without interruption, regardless of whether or not they donate, Locast added.

"Of course, it is up to you whether or not to contribute to Locast," the company added. "But if you currently contribute, we humbly request that you continue to do so. And if you don't contribute, we hope that you will do so if you can afford it."

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— Jeff Baumgartner, Senior Editor, Light Reading