FilmOn, a service that streams live TV and movies over the internet, is reinventing itself as a cable company following last week's Supreme Court ruling that barred a similar service, Aereo, from operating without a license. But the broadcasters, fresh off their victory over Aereo, are unlikely to stand still.
On Monday, FilmOn announced the launch of a new paid streaming package in 18 cities across the U.S., offering the ability for viewers to watch broadcast channels like ABC(s dis), NBC(s cmcsa), CBS(s cbs) and Fox on their computers or mobile devices. Here's a screenshot of how NBC's morning show looked on FilmOn this morning:
I asked my colleagues on the West Coast to give it a try, and they reported it worked for them too -- but they could only get the local New York NBC affiliate station, not the San Francisco one. According to FilmOn, this quirk is due to its "teleporter" technology that "transports" viewers in order to let them to watch TV through a mini-computer screen situated in New York.
If you think all this sounds half-baked, you're probably right. FilmOn, you see, is run by an eccentric billionaire named Alki David who delights in thumbing his nose at the broadcasters' reluctance to license their signals over the internet. The broadcasters keep squashing him in court, but he keeps coming back.
A cable company on the internet
This time around, David is seizing on the Supreme Court's words last week that streaming services like Aereo (and, by extension, FilmOn) are basically cable companies. In Alki David's eyes, this means that the broadcasters must now treat FilmOn as a cable company by allowing it to use their signals in exchange for a fair royalty payment. He claims that FilmOn has long offered to pay but that the broadcasters have refused to negotiate with him -- but now they don't have a choice.
In order to qualify as a cable company, FilmOn claims it must charge its subscribers, which is what the company also started to do on Monday morning. Here's the paywall that my colleague, Barb Darrow, encountered after watching a CBS show on FilmOn for 5 minutes at her home in Boston:
In Alki David's view, the copyright problem is now solved -- since FilmOn is now officially a cable company, the broadcasters get paid and everyone is happy.
The big broadcasters, however, are unlikely to see it that way, especially given their previous responses to FilmOn.
In recent years, for instance, the broadcasters have sued FilmOn repeatedly. In their most recent court triumph, they obtained an injunction that barred FilmOn from retransmitting their signal anywhere outside of three states, including New York, where another court had said Aereo was legal. (This meant that FilmOn could continue to offer small local over-the-air TV channels, but not the big networks).
John Hune of Pillsbury, a lawyer for the broadcasters, told me on Monday that FilmOn is definitely not a cable company -- and can expect yet another lawsuit.
A "Teleporter" to TV
FilmOn is going on a big legal limb to say it is a cable company. But that position is downright conservative compared to the other legal gambit it announced on Monday, concerning what it calls a "revolutionary technology--which goes far beyond anything Aereo had offered."
The technology is what FilmOn calls a "Teleporter." You can see Alki David, who is also an actor, holding the marvelous machine here:
FilmOn first described the device to the Financial Times in February as a way to watch out-of-town TV, but its legal and practical implications are unclear. A spokesperson, who conceded the legal argument is "aggressive," said the Teleporter allows a user in San Francisco to claim they are actually watching TV in New York via a "split-screen" or a "mini-computer" attached to a thousands-mile long cord (I confess I don't quite understand this argument).
In my view, the Teleporter claim is a legal fiction to get around the injunction imposed by U.S. District Judge Rosemary Collyer, who Alki David described to me by phone as "that fascist woman in Washington."
Hane, the broadcasters' lawyer, said he had not heard of the "Teleporter" but said that FilmOn can't retransmit the networks' signal with that or any other device without permission.
The bottom line is that Alki David appears eager to exploit the hole left by the Supreme Court's unwise decision to shutter Aereo -- but for now, he better put aside some of his fortune for some coming legal bills.