[blind-philly-comp] Fw: Locast, a Free App Streaming Network TV, Would Love to Get Sued - The New York Times
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- Date: Fri, 1 Feb 2019 10:48:24 -0500
From: Tom Kauffman
Sent: Thursday, January 31, 2019 4:47 PM
To: Tom Kauffman
Subject: FW: Locast, a Free App Streaming Network TV, Would Love to Get Sued -
The New York Times
To: marianne daley <maridaley@xxxxxxxxxxx>
Subject: Locast, a Free App Streaming Network TV, Would Love to Get Sued - The
New York Times
I remember when tV was free! Don't you? This is not yet available in
Baltimore. Check the article for the list of seven cities where it is now
available
Locast, a Free App Streaming Network TV, Would Love to Get Sued - The New York
Times
On the roof of a luxury building at the edge of Central Park, 585 feet above
the concrete, a lawyer named David Goodfriend has attached a modest four-foot
antenna that is a threat to the entire TV-industrial complex.
The device is there to soak up TV signals coursing through the air — content
from NBC, ABC, Fox, PBS and CBS, including megahits like “This Is Us” and this
Sunday’s broadcast of Super Bowl LIII. Once plucked from the ether, the content
is piped through the internet and assembled into an app called Locast. It’s a
streaming service, and it makes all of this network programming available to
subscribers in ways that are more convenient than relying on a home antenna:
It’s viewable on almost any device, at any time, in pristine quality that
doesn’t cut in and out. It’s also completely free.
If this sounds familiar, you might be thinking of Aereo, the Barry
Diller-backed start-up that in 2012 threatened to upend the media industry by
capturing over-the-air TV signals and streaming the content to subscribers for
a fee — while not paying broadcasters a dime. NBC, CBS, ABC and Fox banded
together and sued, eventually convincing the Supreme Court that Aereo had
violated copyright law. The clear implication for many: If you mess with the
broadcasters, you’ll file for bankruptcy and cost your investors more than $100
million.
Mr. Goodfriend took a different lesson. A former media executive with stints at
the Federal Communications Commission and in the Clinton administration, he
wondered if an Aereo-like offering that was structured as a noncommercial
entity would remain within the law. Last January, he started Locast in New
York. The service now has about 60,000 users in Houston, Chicago, Boston,
Philadelphia, Dallas and Denver as well as New York, and will soon add more in
Washington, D.C.
Mr. Goodfriend, 50, said he hoped to cover the entire nation as quickly as
possible. “I’m not stopping,” he said. “I can’t now.”
The comment is basically a dare to the networks to take legal action against
him. By giving away TV, Mr. Goodfriend is undercutting the licensing fees that
major broadcasters charge the cable and satellite companies — a sum that will
exceed $10 billion this year, according to the research firm Kagan S&P Global
Market Intelligence. For cable customers, the traditional network channels
typically add about $12 to a monthly bill.
With consumers increasingly willing to piece together their own bespoke
packages of content — paying a few bucks to Netflix here, a few to HBO there —
anything that encourages people to cut their cable cords is a challenge to the
cable TV empire. That calculus makes tiny Locast, whose modest website (“Help
us free your TV!”) asks for donations starting at $5, perhaps the most
audacious media experiment in years.
Locast has about 60,000 users in seven cities, with hopes of eventually
expanding nationwide.CreditJeenah Moon for The New York Times
Image
Locast has about 60,000 users in seven cities, with hopes of eventually
expanding nationwide.CreditJeenah Moon for The New York Times
‘Do you know you’re supposed to get television for free?’
With a shaved head and a short mustache, Mr. Goodfriend looks much younger than
his age, and he speaks with the enthusiasm and the cadence of an earnest law
student.
“We really did our homework,” he said. “We are operating under parameters that
are designed to be compliant within the law.”
The copyright code has an exemption for nonprofits. Mr. Goodfriend, who does
not draw a salary, said he has collected $10,000 in donations so far, mostly in
$5 increments. He took out a high-interest loan, at around 15 percent, to fund
the operation, which to date has cost more than $700,000.
Mr. Goodfriend is not a rich tech entrepreneur or a wealthy heir — just a
lawyer who has made a decent living. Locast could still meet the fate of Aereo
and be sued into financial oblivion by the networks. So why is he doing this?
The answer is partly principle, and partly intellectual mischief: With his
public-private background, he has spotted an imbalance in the media ecosystem,
he said, and decided to give the whole thing a shake.
“I ask people all the time, ‘Do you know you’re supposed to get television for
free?’” Mr. Goodfriend said during an interview in Central Park, gesturing to a
gaggle of visitors. “Most people under 50 don’t get it.”
Although his practice is in Washington, where he also teaches law at Georgetown
and lectures at George Washington University, Mr. Goodfriend had come to New
York to inspect the installation of the antenna, on the Trump International
Hotel and Tower.
(This is another area where Locast has to operate carefully: The organization
must install signal equipment in every city where it operates, because all
broadcast stations are regional and retransmissions can be made only to local
residents. If you live in, say, Miami, you can’t get Locast until Mr.
Goodfriend puts up an antenna there.)
More Americans are receiving over-the-air TV signals for free lately — about 16
million households, up from 11 million eight years ago, according to Nielsen.
But that number still pales in comparison with the 90 million homes that pay
for video content, whether cable or satellite or Netflix.
Mr. Goodfriend wonders how many young people are even aware that in the
beginning, TV was free for everyone. “Our society got way over-commercialized
in the ’40s and ’50s, when media policy was being hammered out,” he said. “As a
result, we don’t have stuff for the public anymore.”
Mr. Goodfriend’s argument is infectious, especially when he frames the issue as
David versus Goliath, in the form of the big networks.
“The American people have given you something really valuable, the airways, for
free,” he said, talking about the broadcasters, his eyes popping at the word
“free.” Slowing down for emphasis, he added: “So shouldn’t we get something
back for free? Which is great television. That’s the social contract, right?”
In media, the enemy of my frenemy is my friend
Mr. Goodfriend is the epitome of a media insider and Beltway fixer. During the
Clinton administration, he was a deputy staff secretary — the office is
sometimes referred to as the nerve center of the White House — and from 1999 to
2001 he worked as legal counsel to the F.C.C. He spent time as Charlie Ergen’s
vice president of law and public policy at the satellite-TV provider Dish, and
with his wife, Sue Emmer, he owns an advisory firm that counts Google, PayPal
and the Weather Channel as clients.
It’s the kind of history that one needs to take on the broadcasters. The
contemporary history of TV and copyright law is something like a Dungeons and
Dragons script — several competing story lines hastily merged together to bring
about a conclusion to the game.
The short-short version goes something like this: By the 1990s, after decades
of legislative tussles over how copyright owners should be compensated, the
networks won a provision that required providers like Comcast or Dish to
negotiate a fee, known as “retransmission consent,” to carry their signals.
Aereo’s 2014 loss in the Supreme Court is rooted in that framework.
Locast started as a thought experiment in one of Mr. Goodfriend’s lectures at
Georgetown. He was reviewing the Aereo case and wanted to show how its ruling
might impact the public interest.
“I had to teach them that more often than not, it’s through huge stakeholders
battling it out that change happens,” Mr. Goodfriend said. “There should be
something that challenges the broadcasters.”
After Locast debuted, the cable and satellite providers quickly took notice. A
free streaming service that captured broadcast signals could benefit their
business if it meant they no longer had to bother carrying network stations and
bargain for fees.
The cable and satellite companies typically negotiate agreements with
broadcasters every three years. The former want to pay the least possible; the
latter want as much as they can get. When the providers and broadcasters can’t
come to agreements, customers suffer blackouts.
That happened on Jan. 2 during a standoff between Charter Communications, the
nation’s second-largest cable operator, and Tribune, which owns local TV
stations affiliated with the major broadcasters. Football fans in some areas
missed a Jan. 5 playoff game between the Seattle Seahawks and the Dallas
Cowboys, which aired on Fox.
When customers called Charter to complain, service representatives, depending
on the region, would alert subscribers to Locast as a way to get programming
despite the blackout. Nine days later, the two sides reached an agreement, with
Charter agreeing to pay more to carry the channels.
Cable and satellite carriers have long railed against retransmission fees. Mr.
Ergen, the billionaire who controls Dish, has been one of the most vocal
opponents of the fees, and given Mr. Goodfriend’s ties to the company, many
people in the industry believed Mr. Ergen was somehow backing Locast. (Mr.
Ergen had tried to buy Aereo’s assets when it went into bankruptcy, but
eventually backed off.)
“No, Charlie hasn’t given me any money,” Mr. Goodfriend said. But he has asked.
“Charlie just said, ‘Good luck.’ He’s been very encouraging. I’m still working
on him to get some funding.”
Mr. Ergen declined to comment. The networks were also mum on Locast: CBS and
NBC declined to comment, and ABC and Fox did not respond to inquiries.
The networks’ dilemma: Sue or ignore?
Mr. Goodfriend said he would welcome a legal challenge from the networks. But
the broadcasters’ deep pockets would make them a formidable opponent.
“I’d give them a 50 percent chance for prevailing, only because they’ll have
the money for the lawyers,” said Jessica Litman, an expert on copyright law and
a professor at the University of Michigan law school.
She considers Locast legal, but that may never be tested — that is, the
broadcasters may be wary of giving Mr. Goodfriend’s start-up the spotlight of a
big legal fight.
“A loss for the networks is a lot more risky than a win would be,” Ms. Litman
said.
Initially, Aereo escaped legal scrutiny. “Nobody touched us, even when we were
adding customers,” its founder, Chet Kanojia, said in an interview. That
changed when Mr. Diller put his money in. “That lit the fuse,” Mr. Kanojia
said.
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Mr. Goodfriend is soliciting corporate sponsorships, and is in talks with
Samsung to make Locast available on its smart TVs.
“I don’t pretend to know how all this ends,” he said. “And if you look at how
much this is costing and where I am right now, you’d say, ‘Dude, you’re
screwed!’ But I haven’t even really started to fight. I’m not giving up.”
Edmund Lee covers the media industry as it grapples with changes from Silicon
Valley. Before joining The Times he was the managing editor at Vox Media’s
Recode.
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