Local Broadcast Retrans Streaming Gaining Steam Amid Legal Questions
Third-party streaming of local live TV broadcasts is growing, with Locast adding markets and Didja, trialing in three markets, hoping to sign retrans agreements with major broadcasters soon. Though the copyright and retans lawsuits some saw as possible with the early 2018 launch of Sports Fans Coalition's Locast (see 1801110026) haven't materialized, some say it's not in the clear.
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Section 111 of the Copyright Act gives an exemption for secondary retransmission by a nonprofit, and what counts under that exemption has never been substantially litigated, meaning there’s only the statute to go by, said John Bergmayer, Public Knowledge senior counsel. Aero, when its somewhat similar service was before the Supreme Court, unsuccessfully argued what it was doing wasn’t public performance but a collection of private performances, while its secondary argument was that it was a cable service and met that statutory exception, Bergmayer said. Courts have been reluctant to describe as cable anything other than traditional cable systems, he said. PK staff have been on the SFC board.
Locast is operating in "an interesting little [legal] hole" but as long as it doesn't cause major discomfort to broadcasters, they won't do anything, said cable consultant Steve Effros. He said something like Locast wasn't the intent of the Copyright Act, but it seems to fit the parameters of the language. A court might look at intent more than language, but broadcasters must be aware of the risks of suing and losing, and currently the risk seems to outweigh any benefit of a win. As time passes, it's tougher for a plaintiff to sue and claim a business threat, said SFC founder David Goodfriend. NAB didn't comment Friday.
Locast is available in more than a dozen markets, including Baltimore, Chicago, Dallas, Los Angeles, New York and Washington, having added Rapid City and Sioux Falls, South Dakota, last month, Goodfriend said. He said the expansion plan includes more West Coast markets and smaller middle America markets. It’s available on multiple platforms, including IoS, Roku, Amazon Fire Stock and Hopper, and is trying to get on others, such as TiVo, he said.
The service could financially break even before year’s end though paying down debt is a separate issue, Goodfriend said. He said spending on Locast has been less than $2 million. He said much of that was in legal research and guidance. He said that seems to be paying off, with its approach staying within the scope of the law. Goodfriend, a former Dish Network vice president-policy, said it hasn’t funded Locast, though it and other MVPDs have directed subscribers there during blackouts. AT&T said last month it was donating $500,000 to SFC for running of Locast, after announcing in May it would add the Locast app to its DirecTV and U-verse platforms. Asked why it was making the donation, the telco didn't comment.
The costs of operation for a market are relatively small -- an antenna, rooftop access, server space and an upstream connection to the content delivery network in the local market, Goodfriend said. The CDN is the largest variable cost.
The upstart also is working with some local broadcasters, including in New York and Philadelphia, with must-carry stations worried about cord cutting seeing the organization as another distribution route for their signals. He said they see online eyeballs as a pathway whereby retrans stations losing revenue from cord cutting can make up that revenue. Locast gives broadcasters viewership data.
Didja, which unlike Locast does retrans deals with major broadcasters, started trials in Los Angeles, San Francisco and Phoenix in 2018, said CEO Jim Long. He said the broadcast industry, now that it's largely done with deals with vMVPDs, can turn its attention more to other deals, such as Didja. Currently, no major broadcasters are part of the trials in those markets, Long said.
Long said that with the MVPD and vMVPD market having peaked, Didja is targeting a market of what will be 40 million to 60 million cord-cutter homes in the U.S. He said it's a route to wider distribution for broadcasters, especially among younger viewers, and offers data and targeted advertising opportunities. He said the ATSC 3.0 rollout also should lead to a proliferation of more hyperlocal channels to be carried.
Both Locast and Didja offer market-restricted feeds, so watchers in a particular designated market area can only see streaming broadcast feeds from that market.
Broadcasters should be more worried about services like Locast, Effros said. That's since cable distributors are also increasingly pushing back on forced tying of channels, and finding they don't lose customers when channels are dropped.