Networks Sue to Stop Streaming Service Offering Free TV Feeds
July 31 2019 - 11:11AM
Dow Jones News
By Joe Flint and Drew FitzGerald
The four major broadcast networks have filed a suit in federal
court to shut down Locast, a nonprofit streaming service funded in
part by AT&T Inc. and founded by a Dish Network Corp. lobbyist
that offers their feeds to subscribers for no charge.
CBS Corp., Walt Disney Co.'s ABC, Comcast Corp.'s NBCUniversal
and Fox Corp. argue that Locast is retransmitting the signals of
their local TV stations without permission, in violation of
copyright law. The fees that broadcasters receive from pay TV
distributors have become crucial to their long-term survival, and
there is concern that if Locast grows in popularity, it could cut
into that revenue stream.
Locast has positioned itself as a free alternative to consumers
who are tired of rising cable bills, in addition to serving as a
distribution alternative for people who can't get local TV signals
through their antenna. In the lawsuit, the broadcasters argue that
Locast is a pawn for AT&T and Dish, two of the largest pay TV
distributors in the country. The suit says Locast's primary reason
for existence is to help them avoid paying to carry broadcast
content.
"Locast is not the Robin Hood of television," said the lawsuit,
which was filed in U.S. District Court in the Southern District of
New York. "Instead Locast's founding, funding and operations reveal
its decidedly commercial purposes."
Broadcasters also said when Locast retransmits their signals it
strips out vital information including Nielsen codes that are used
to measure ratings, according to the lawsuit. At the same time,
Locast, a nonprofit, is gathering its own customer data and
requiring registration, "even though there is no technological
reason to do so."
Locast is the second major threat to subscription revenue that
broadcasters have faced in the past decade. In 2014, Aereo, a
similar streaming service whose backers included media mogul Barry
Diller, was shut down after the Supreme Court found it violated
copyright law.
Locast says it complies with the 1976 Copyright Act, which
allows for nonprofits to operate so-called booster and translator
stations that strengthen a TV station's signal to reach antennas
that otherwise wouldn't receive the channel.
Launched in early 2018, Locast says it has signed up more than
250,000 users. The service isn't yet available nationwide but is
present in many of the country's largest TV markets and reaches
more than 30 million households.
While Locast markets itself as a free alternative, the
broadcasters note that it seeks donations during its
retransmissions and "promises that the commercials will abate if
viewers commit to the recurring monthly 'donation.'
Locast relies on user donations and recently received a $500,000
contribution from AT&T. IOT Broadband LLC, a firm owned by
former Dish executive Michael Kelly, has donated nearly $800,000 to
Locast, according to a tax filing. Both DirecTV and Dish point
their customers toward Locast on their set-top box menus.
The lawsuit said Locast provides commercial benefits to AT&T
and Dish. "It is a strategic play funded by and functioning for the
benefit of decidedly commercial interests," it said. Broadcasters
also said Locast "collects commercially valuable data about its
users' television viewing habits while offering that data as an
enticement for other commercial players to support Locast with
infrastructure or other assistance."
Founder David Goodfriend, a Washington attorney who has long
ties to Dish, has said Locast is willing to share its viewership
data with TV stations that request it.
Locast is part of the nonprofit Sports Fans Coalition NY Inc., a
group Mr. Goodfriend launched years ago to contest the National
Football League's earlier practice of blacking out local broadcasts
of games that didn't have full stadium attendance.
The broadcasters said the provision Locast is citing still
required permission from the TV station owner. The suit noted that
the service markets itself not as an answer to bad reception but
"to users who already have access to broadcast television as a way
to enjoy the added convenience of live mobile viewing over the
internet without having to pay for it."
Write to Joe Flint at joe.flint@wsj.com and Drew FitzGerald at
andrew.fitzgerald@wsj.com
(END) Dow Jones Newswires
July 31, 2019 10:56 ET (14:56 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
DISH Network (NASDAQ:DISH)
Historical Stock Chart
From Aug 2024 to Sep 2024
DISH Network (NASDAQ:DISH)
Historical Stock Chart
From Sep 2023 to Sep 2024