Locast vs. the Media Giants

Locast a nonprofit startup service that launched in 2018 which grabs over-the-air channels and streams them free over the internet said late Thursday that the ABC, CBS, Fox and NBC's "sham litigation" against it, is an antitrust conspiracy to drive it out of business and they are colluding to deny consumers over-the-air signals they once committed to make freely available. 

The suit was the first attack against a company that many see as a successor to Aereo (see past stories), a for-profit streaming service that five years ago offered consumers livestreams of broadcast channels for a monthly subscription. The difference between the cases is Locast's nonprofit status. US copyright law has allowed certain nonprofit institutions to grab over-the-air TV signals and retransmit them to nonpaying viewers, such as a university setting up an antenna that can retransmit to students in its dorms.

Locast's first official answer to the copyright suit goes beyond simply rejecting the companies' accusations of copyright infringement to accuse them of collusion and it's bringing Google's YouTube into the fight. Locast stated that executives at YouTubeTV a paid service that streams live TV channels, met with the Big Four broadcasters suing Locast in April. According to Locast, the YouTube executives were told that if YouTubeTV provided access to Locast, then YouTubeTV would be "punished" by the media giants when YouTube renegotiated the licensing deals allowing its streaming service to carry media giants' cable networks.

In full disclosure, although Locast relies on donations from viewers, it accepts money from corporations and recently received $500,000 from AT&T, which also operates the DirecTV satellite service. When a fee dispute blacked out CBS for more than 6.5 million AT&T television subscribers for a few weeks this summer, AT&T encouraged its users to try Locast.

No doubt this story will continue for some time and we look forward to seeing how it ultimately plays out. More:  The Hollywood Reporter 09/26/19 - Locast Accuses the Major Broadcasters of Antitrust Violations and The New York Times 09/27/19 - Locast, a Free Streaming Service, Sues ABC, CBS, NBC and Fox

Dish Unveils Sling TV Internet Pay-TV Service

The OTT video landscape changed significantly this week when DISH finally unveiled their long talked about OTT offer, Sling TV. The new service targets cord cutters and cord neverers with a new video product that is helping shape a rapidly changing video business marketplace. It’s interesting that this new twist on TV is coming from a traditional pay-TV operator which appears to be the first to be breaking from the standard industry bundling status quo. Sling TV's lineup will include ESPN and ESPN 2, but it doesn’t include any broadcast networks. They will feature networks from Disney/ESPN, Turner Broadcasting and Scripps Networks Interactive. The stripped-down bundle is targeted at price-sensitive and Internet-savvy millennials who don’t currently subscribe to a pay-TV service. MORE: Telecompetitor.com 01/06/15 - DISH OTT Offer, Sling TV, Uses Sports for Cord Cutter Bait and GIGIOM 01/05/15 - Dish’s new Sling TV service liberates ESPN from the cable bundle

OTT gains on traditional TV particularly among Millennials.

Late yesterday, measurement specialist comScore, issued a research paper titled "The U.S. Total Video Report" that looks at shifting TV viewing habits in the digital age. There's little doubt that American's viewing patterns are quickly changing, and our youth are leading the way.  The study – The U.S. Total Video Report, which tabulated results from 1,159 respondents in August – found that Millennials (adults 18 -34), watch original TV shows on digital platforms one-third of the time. ComScore notes that the older the viewer, the more likely to watch on a TV set. In other bad news for TV broadcasters, comScore found that 1 in 6 millennials hadn't watched an original series on a TV set in the past month. Instead, they're getting their video from set-top boxes such as Roku and Apple TV, and game consoles.

Unsurprisingly, Millennials are also more likely to be cord-nevers or cord-cutters and they are more likely to time-shift their viewing: 46 percent of them time-shift shows, while only 35 percent of those 35 to 54 do so.  Among other findings, consumers who subscribe to paid digital video services are more likely to binge-view TV shows over a monthly period – 87% vs. 69%. TV via the DVR (43%) is the preferred binge-viewing platform, followed by the TV via VOD (19%); Internet connected TV devices (12%); live TV – a category that includes reruns or marathons from MVPDs – (11%); tablets (4%), desktops/laptops (3%); and smartphones (2%).

While comScore's results are interesting, their methodology  and approach called Total Video to track unduplicated audience metrics across platforms has some flaws. ComScore surveyed 1,159 viewers with an online questionnaire, so those surveyed are all active internet users. The report is available for free download (registration required). MORE: TechCrunch 10/14/14 - Netflix Leads In U.S. Digital Video Subscriptions In Home And Among Millennials by Ingrid Lunden

Is the FCC Redefining Television

The Federal Communications Commission is preparing a proposal which could help the fledgling OTT industry by treating certain online video services like cable and satellite TV providers. The move would help the online services gain cheaper access to major network programming and could allow them to become stronger competitors to the dominant pay-TV providers like Comcast.  Gaining rights to popular channels has been a major hurdle for online TV services. Sony Corp. and Dish Network (as previously reported here) are among the companies considering Web-based services to compete with traditional cable and satellite operators. The big issue and cause for some OTT failures like Intel’s exit from its “OnCue” service, is in securing highly coveted programming from ESPN, NBCU, AMC and others is that the networks typically are owned/controlled by the larger MVPD’s (Comcast, Time Warner, Cablevision).

FCC Chairman Tom Wheeler was asked about the matter yesterday and stated that a proposal is circulating among commissioners “is probably a bit of an overstatement.” Nonetheless the industry analysts are buzzing. “This is a very big deal,” said Richard Greenfield, an analyst for BTIG. “It could pose very significant challenges to the traditional cable TV bundle.” Paul Gallant, with Guggenheim Securities, said in a note today, that broadcasters such as CBS Corp. and 21st Century Fox Inc. would potentially benefit from having more buyers for their programming.

According to an unknown source by Bloomberg, the change would affect online video providers that offer a cable-like programming service on a schedule, and not on-demand services like Netflix, which allows subscribers to watch videos whenever they want. But it could revive the controversial online video service Aereo, which allowed subscribers to watch broadcast TV channels on their computers and Internet connected-TVs.

 

Although for now this may just be chalked up as a rumor, it is one that would have a broad impact on the business as it is today, a  move which could significantly broaden competition in the MVPD market. More: FierceCable 09/30/14 - Rumor mill:Aereo-like platforms may be given program licensing rights by FCC and/or Variety.com09/29/14 - FCC Wants Some Online Providers to be Treated as Cable Operators

Cord Cutting Slowing

Recent reports state that connected devices have exceeded 1 billion home makes one wonder where the "cord cutters" really are when new data from analysts MoffettNathanson shows that the pay-TV business only lost about 300,000 subscribers in Q2. But that’s basically flat compared to a year ago, and that’s a change from the year-on-year declines of the previous few quarters.
And after factoring in the housing market a key driver for pay TV the research firm concludes that “it appears that cord cutting slowed to an annualized rate of 400k homes, a meaningful deceleration and well below the peak rates of cord cutting seen in 2012.” More: Recode.net 08/07/14 - "What Happened to all the Cord Cutters?"