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Ivi online tv, swarmed by broadcasters' suits, takes fight to Washington

By Cecilia Kang

ivi-tv-pro-guide.jpg

Ivi tv, in its short two months of existence, has made enemies out of network giants with its online television streaming service. It’s fighting back, with its own lawsuit and a push to get federal regulators to change television rules to include new Internet platforms.

With a few lobbyists spreading their message to staffers on Capitol Hill this week, the Seattle-based startup hardly has the ground forces that broadcasters and telecom firms do. Critics pan the firm’s interpretation of copyright laws that it uses to justify retransmitting over-the-air broadcast signals so its online viewers can watch live streams of Oprah and big sporting events.

Ivi and a growing crop of television streaming platforms such as FilmOn.com are caught in the crosshairs of a shifting business landscape. Networks say they are stealing content and not paying networks their due.

The debate highlights the high-stakes corporate battles taking place in a shakeout of the traditional television industry. Consumers are increasingly looking to watch entertainment and news over the Internet and networks are trying to ensure they are getting paid adequately for their shows.

During Fox’s and Cablevision’s retransmission dispute, ivi saw the number of its subscribers triple in New York, as viewers watched live World Series coverage on ivi because they couldn’t get the games on Fox.

Ivi wouldn’t say how many subscribers it has because the service started just two months ago. But a 300 percent leap in subscribers probably doesn’t put a big dent into Cablevision’s base of 3 million subscribers.

It also doesn't identify its angel investors, except to say they are high net worth individuals. FilmOn's chairman is wealthy media entrepreneur Alki David. Observers say those individuals will have more stamina than a venture firm to fight legal battles against networks.

Todd Weaver, CEO of ivi, talked to Post Tech by phone about its role in the television industry and why he thinks the Federal Communications Commission needs to step in to protect upstarts like his.

Here’s an edited version of our talk:

Q: What’s your mission?
A: We are an online cable company and our goal is to make subscribers out of cord cutters, those who want their subscriptions attached to a device and not a home address.

Q: How did you go about getting your content?
A: We launched two months ago but have been working since 2007 to negotiate carriage rights for channels.We basically have the same model as cable but want to give bite size subscriptions so people can get shows a la carte over any device, laptop or desktop computer.

We talk to literally hundreds of cable operators and networks to carry signals on ivi. But broadcasters say you don’t get to carry our signal, cable channels would not negotiate program access with us and so we were left with independents like Viacom, who wouldn’t sign us up either because they have agreements with cable companies like Comcast not to carry signals on the Internet.

Q: So no one wanted to cut a deal with you so you decided to just feed off over the air signals to your Internet service. How is this legal?
A: So we found ourselves in a pickle. We don’t get FCC benefits because we carry content on the Internet, which the FCC doesn’t govern. So we looked at the cable industry and saw that 16,000 small cable companies pay the U.S. Copyright Office for a license, which grants them non infringing rights to retransmit over-the-air broadcast signals.

Q: Is this a work-around? Do you think broadcast and cable companies are getting their fairly compensated?
A: No, this is not a workaround at all. If that’s the case 16,000 other cable firms are in the same place. We pay the Copyright Office a license fee and those fees get divvied up between the broadcasters.

Q: Do you think you’ve got a shot a winning your lawsuits and lobbying push?
A: We knew when we launched that all major broadcasters out of New York and Seattle would protest. We imagined history would repeat itself and were not surprised by the cease and desist letters from local affiliates and networks. But we’re not stopping because we aren’t doing anything wrong. Broadcasters fought against cable companies, then joined them. Broadcasters then fought against satellite companies, then joined them. Now it is our turn.

Q: You went the extra step to file your own suit. Tell us why.
A: When we received a third cease and desist letter, we asked a Seattle federal judge to tell the broadcasters that we are not infringing in a declaratory ruling. A week later, broadcasters filed a copyright infringement suit against us in New York. At this point, all parties are waiting for the Seattle’s judge’s ruling.

Q: Why are you lobbying in Washington D.C.? What do you want to accomplish?
A: We want senators to hear our side of the story ahead of the (communications subcommittee) hearing on retransmission fees disputes next week. We also want the FCC to consider online platforms to create a more level playing field. Until they do so, companies like ivi are left out of the benefits of retransmission consent and program access negotiations.

Q: Why can’t broadcasters just block your shows to your service like Fox did with Cablevision and networks are doing with the Web versions of their shows to Google.
A: This is 24 hour-7 day feed in your living room that we are retransmitting. We have a digital antenna in New York that is pulling down their feeds, their content and advertising. We capture and retransmit that to our subscribers.

Q: What’s the interest been so far in your service?
A: Unbelievable. Beyond just cord cutters. We deliver live sports and news, which is the most beneficial to get live. One of the biggest benefits for our company has been the Cablevision/Fox dispute with the World Series. Before the pregame pitch, we saw an explosive increase in subscribers. At the time we were just 40 days old.

Q: Will this supplant cable?
A: We have cord cutters who previously cut the cord and have been looking for something like ivi for some time. But we also have people who never established the cord in the first place -- the college kid who grew up with cable in their parents’ homes but then went off to college and only watch television streaming online on their campus Wi-Fi.

Related stories of interest:

Internet TV battles come to head at FCC

The battle for your television viewing habits

Senate to scrutinize television fees negotiations

By Cecilia Kang  | November 12, 2010; 10:41 AM ET
Categories:  FCC, Online Video  
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati   Google Buzz   Previous: E.U. won't adopt net neutrality law
Next: Regulators eye Internet, program conditions to Comcast-NBC merger, sources say

Comments

Cecilia Kang, Google's reporter at the Post, is carrying water for Google again. By writing a puff piece for iVi, Kang is also pulling for Google's "Google TV," which likewise has been denied free access to program content. Why doesn't the Post simply fire Kang and let her take the job at Google for which she's clearly "paying forward?"

Posted by: LBrettGlass | November 14, 2010 11:36 AM | Report abuse

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