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Cablevision’s loss is ivi TV’s gain

Fri, 10/29/2010 - 8:39am
Traci Patterson
In the latest salvo of its ongoing retransmission spat with News Corp.-owned Fox Networks, Cablevision issued a press release yesterday afternoon that called on governmental entitles and non-profit organizations to consider retransmitting Fox’s coverage of the World Series for free over the Internet.

Cablevision didn’t name any specific governmental entities or non-profits in its release, but wrote: "The decision whether to retransmit the World Series is one that only a governmental entity or a non-profit organization can make for itself. Cablevision urges any entity interested in providing this public service to independently examine the law."

What’s interesting is that Cablevision cited the 1976 Copyright Act – specifically, section 111 – as proof that non-profits and governmental entities could transmit Fox’s signal over the Internet for free.

Fox said in a statement that Cablevision was encouraging governmental entities and non-profits to break the law, that the “obscure” 1976 Copyright Act was for boosting over-the-air signals to antennas in rural areas, and that it had nothing to do with Internet streaming.

But maybe the 1976 Copyright Act isn’t that obscure, and it would seem that Fox has heard about it on one other front recently.

Earlier this week, online video start-up ivi TV cited the same act and section after it made a filing last Friday in a U.S. District Court in New York. Ivi TV’s filing was in response to CBS, Fox, NBC, PBS, Disney, WPIX and other entities, including the Office of the Commissioner for Major League Baseball, asking the court to issue either a preliminary injunction or temporary restraining order of ivi TV’s streaming online service because it was illegal copyright infringement.

In addition to arguing that under section 111 of the 1976 Copyright Act that it was allowed to retransmit broadcast signals because it’s a cable system, ivi TV asked that the case be moved to Seattle, which is where it’s based. In further arguing that its service was legal, ivi wrote that it paid the Copyright Office, which in turn paid the content owners, and that the Federal Communications Commission didn't regulate the Internet. (Cablevision asked FCC Chairman Julius Genachowski to mediate an agreement with Fox earlier this week, but to no avail.)

So while ivi is using the 1976 Copyright Act to argue for its very existence, Cablevision is using it to encourage an end-around by its subscribers so they can still view Fox shows.

Meanwhile, Cablevision’s subscribers have been without Fox programming since Oct. 16, while ivi has been providing its service in the New York metropolitan area that is largely Cablevision’s footprint.

Ivi TV CEO Todd Weaver told DailyFinance that prior to the start of the World Series on Wednesday, his company had seen a 320 percent spike in subscribers in the New York area, with 300 percent coming from homes with Cablevision connections. Weaver didn’t provide actual subscriber numbers, but he said the service, which launched in September, had more subscribers than many small-size cable operators.

The whole Fox-Cablevision retransmission dustup is driving customers into the arms of ivi TV’s service, which costs $4.99 per month after a 30-day free trial. Ivi TV is currently broadcasting content from ABC, NBC, CBS, Fox, The CW and PBS, and Weaver said in a press release earlier this week that he had inked more content deals at the CTAM Summit last week in New Orleans.

"It is ironic that within hours of returning from a successful CTAM Summit where ivi TV signed some soon-to-be-announced content deals and executed many NDAs to discuss potential deals, we now find ourselves filing this legal brief in response to Big Media copyright conglomerates’ misguided legal tantrums trying to stifle the pace of innovation," Weaver said in the release. "Ivi TV has the law and history on its side. History shows that Congress is more likely to change the law to embrace new delivery methodologies, not to stifle them. So, while we cannot predict the outcome of the legal process or the future of the congressional lawmaking process, we do believe history will repeat itself. Just as they did for cable and satellite before us, Congress will enact a third compulsory licensing scheme to cover Internet television delivery.

"In the meantime," he added, "as one MSO executive we met with at CTAM put it, 'You guys are very quickly establishing yourselves as a new distribution platform that isn't going away.'"

Maybe the next time Weaver sees the Fox execs in court, he can thank them for sending Cablevision’s subscribers to his streaming service.

On a separate note, Insight Communications CEO Michael Willner wrote in his blog yesterday that a free market for retransmission agreements no longer exists.

Also, a story yesterday from MediaDailyNews said that Fox’s local ad sales were being hurt by the impasse.

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