ivitv logoThere’s a new internet startup called ivi TV that is streaming 27 over-the-air (OTA) channels from New York City and Seattle. It has only three downsides: it uses peer-to-peer technology, it costs $4.99 a month after a free trial, and it’s unlikely to survive into 2011. I’d say the odds are better than 50-50 that it’s gone before Halloween.

ivi is trying to dance on the edge of two different US laws. On one hand, it wants to be treated as a cable operator by relying on a piece of copyright law that allows cable systems to retransmit OTA signals so long as they pay statutory licensing fees. On the other hand, it doesn’t want to be subject to the FCC, which requires cable and satellite companies to negotiate retransmission fees for OTA channels.

In less than a week, ivi has received cease and desist letters from NBC-Universal, CBS, Disney, ABC, The CW Television Stations, Inc., Fox Television, Major League Baseball, Twentieth Century Fox Film Corporation, WGBH, WNET.org, and more. So yesterday, ivi filed a preemptive Complaint for Declaratory Judgment of Copyright Noninfringement in US District Court in Seattle.

Hardly anyone ever mentions this, but there is one way for viewers to pay for distant, out-of-market OTA stations, if only a few of them. The latest renewal of STELA, the legislation that enables Dish Network and DirecTV to retransmit local signals back to local markets, also renewed the old, odd grandfathered status of the five legally defined superstations: KTLA, Los Angeles; KWGN, Denver; WSBK, Boston; and WWOR and WPIX, New York. Dish viewers can pay a little to subscribe to any or all of these stations. In turn, Dish pays a set amount to a pool which is redistributed to copyright owners. Local stations who have exclusive rights within their markets to certain syndicated shows can ask Dish to block those shows on the superstations, but few stations bother, probably because so few Dish viewers subscribe to them.

Back to ivi. I’d dearly love to have out-of-market OTA channels available to me, and I think that ivi could pay a flat fee to the copyright office as described in the law. The superstations show that you can build a fair framework for this sort of thing. I could even point out the local broadcasters’ public service duty they owe for using scarce, valuable spectrum. But I don’t believe it’ll happen.

If you’ve been using the internet long enough, maybe you remember iCraveTV.com. That was a Canadian company that, in late 1999, wanted to take advantage of the law in Canada that allows anyone to retransmit any OTA signal in exchange for a small payment to a copyright pool. iCraveTV started streaming postage-stamp-sized Real Video feeds from its antennas in Vancouver and Toronto. Which could pick up all of the Canadian OTA stations, plus those from Seattle and Buffalo. The usual suspects in the US hit the ceiling and started suing. iCraveTV tried to restrict its viewers to Canadians, without much success. Eventually, despite having a good chance of eventually winning in Canadian courts, iCraveTV folded. (Cnet has a great postmortem interview with iCraveTV’s founder.)

It was a smart move for ivi to try to get that judgement of noninfringement. If it fails, the founders can cut their losses right away. If it succeeds, ivi may have a few months to build up some cash flow (at thousands of users x $5) to pay to defend the lawsuits that the deep-pocketed entertainment companies will surely rain down on them. If ivi continues to survive in court, those entertainment companies will turn to Congress to fix the copyright act, and that will be the end of that.

(Since I have an unusual interest in TV listings, I wonder whether someone might go after ivi just for its excellent program guide. Where does ivi get that information? There’s no way that all of those stations are cooperating. So either ivi has licensed the listings information from one of the large listing services or, well, they haven’t.)

Sadly, I can’t imagine that ivi will thrive in the long run. But as Keynes put it so well, in the long run, we’re all dead. We can enjoy ivi for as long as it’s legal and alive. No matter how short a time that is.

Update: Responding to this post, an ivi tv spokesman said that the iCraveTV legal battle doesn’t apply to ivi. I’d say there are obvious differences, but I expect the same kind of legal firestorm nonetheless. The spokesman also noted that just as satellite companies had to go through a legal process to eventually retransmit locals, this is the beginning of the same kind of process for internet-based OTA delivery. But I’d point out that with few exceptions, OTA channel rebroadcasts are still restricted to their local markets.

I sincerely hope that ivi is as legal as they say it is, and the TV revolution it could bring makes a fun thought experiment, at least. Is it possible for ivi to get so popular that Congress would refrain from killing it? Let’s see if we get that far.

A few quick notes. First, Azteca Siete has picked up a weekly Sunday afternoon pro football game again. It’s in Spanish, of course, but it uses a US network feed, and you should be able to keep track.

Once upon a time, in the glory days of FTA, you could find several games available through various US OTA signals that were sent on satellite. Now we’re down to one, not counting the Sunday night game you can probably watch OTA already. Still, it could be another option if you don’t like the game(s) that your local channels are showing.

* Charter cable has started itemizing the amount it pays for retransmission fees. Wayne Friedman of TV Watch writes that Charter shouldn’t stop there; it should itemize the amount it pays for every channel of programming. That’s a good idea that’ll never happen.

If you’ve never looked at how much cable and pay-TV satellite operators pay per subscriber per month for various channels, you should take a look at this list compiled by Peter Kafka in March. Among basic channels, ESPN and the local Fox Sports Net cost as much as the next 10 most expensive channels put together, if that chart is right. And in those 10 are TNT (which raised its rates after landing the NBA), NFL Network, and ESPN2.

If pay-TV providers could break out sports programming as an option, those who don’t watch sports could see their bill go down $10/month. ESPN (Disney) knows this, and that’s why it fights hard to stay on everybody’s most basic tier.

But back to itemizing broadcast retransmission fees, this is another example of why there needs to be a single, negotiated rate for providers to pay local stations. Below a certain viewership threshold, the station would be carried for free and like it. (I’m looking at you, shopping channels.) Above that, it could be based on an average number of viewers, determined by market size and ratings. With such a basic system in place, viewers could be sure they’d never lose broadcast channels in a fee dispute, and both sides would know in advance what those fair payments would be. Seems to me that just the billable time saved by each station’s negotiators would make this worth it.

* MTV Spain has launched as a FTA channel. Just in Europe, of course. Should we be envious?

Hello again. Vacation time is over, but I kept holding off on posting here until there was some good news to report. No one wants to read about such dreary stuff as the St. Louis Cardinals shifting all of their baseball games away from OTA TV, or about the Research Channel going off the air because of University of Washington budget cuts.

This week, that good news arrived. First came word that those same Cardinals had agreed to move their radio contract back to KMOX, an AM station that most of the country can pick up after dark. That’s great for us lovers of free content and nighttime driving trips, but it’s not really FTA TV.

The big news is that BYU’s football team will leaving the Mountain West Conference next year and become independent. (Most of BYU’s other teams will join the West Coast Conference.) The reason we should care is that this gives BYU control over its broadcast rights for football, and indications are that most of the games will be live on BYU TV.

As discussed in stories in The Salt Lake Tribune and BYU’s Daily Universe, this means that BYU will use its successful football team to drive demand for BYU TV, which is already available on Dish Network, DirecTV, and FTA. And that goes along with what I’ve been preaching for years: If you want new viewers to convert to your cause, give them a reason to tune in. We’ll see whether BYU uses the opportunity to promote its other programming during the games.

At a minimum, this means more live major-college sports should be available a year from now on FTA. And we can all give thanks that at least one religious broadcaster understands what it takes to attract viewers.

Ned Beatty in Network

Ned Beatty as Arthur Jensen in Network

And our children will live, Mr. Beale, to see that perfect world in which there’s no war or famine, oppression or brutality — one vast and ecumenical holding company, for whom all men will work to serve a common profit, in which all men will hold a share of stock, all necessities provided, all anxieties tranquilized, all boredom amused.”
– Arthur Jensen, “Network”

In my last post, I promised predictions about the future of television viewing. Here’s the first of them, from the eerily prescient film Network. (If you haven’t seen it, run out and buy or rent an unedited, uncensored version. Don’t just watch it on broadcast TV.) When Network came out, according to one source, about 50 corporations controlled the US media. Less than 30 years later, we’re down to six that own the great majority of the TV networks viewed in the US. In general, they will work to ensure that they continue to own all significant sources of TV ad revenue.

I’m not pointing that out to say they’re somehow evil for concentrating network ownership so thoroughly. It’s the duty of a corporation to maximize profits; consolidation decreases redundant expenses and removes competitors. In the absence of legal restraint, it’s only natural for something like this to happen.

Anyway, the most likely scenario is that these huge content owners will continue to be the only source of “new” channels. They’ll populate them mostly by repackaging existing assets, adding just enough original shows to ensure demand. Even the broadcast networks, if they can get enough leverage over their over-the-air affiliates, might switch to national feeds supplemented by local advertising inserted by cable systems.

OR if you’d prefer to think positive, satellite TV may ride to the rescue with something completely different. Think of what Ted Turner accomplished in the late 1970s. He turned a local independent station into a national network. While the times are different now, there aren’t any barriers preventing others from doing the same thing.

The real trick is for a station to own national rights to all of its programming. For college stations, such as those run by the University of Washington and Brigham Young, it’s easy to get a cheap (student) workforce to create lots of content. For others, such as the kinda-comatose White Springs TV, the trick was to use a lot of content that nobody owns. Other national networks with very modest programming budgets include America One, RTV and Tuff TV. (I was going to include old FTA friend AMG, but I couldn’t find any active affiliates for it.)

If you can take that national content and add a very local presence for one underserved home market, then you can create a new superstation, one that relies on local car dealer ads as much as national dishwasher soap ads. Whenever big content owners squeeze out local voices, the new superstation can be there with extensive news coverage, local sports events, and a home-town feel to it. Then that station can go up on satellite to be picked up by FTA viewers, out-of-town cable systems, or both.

Or you can turn that equation upside-down and do it the way a lot of RTV and America One affiliates do it. They create a nice piece of local programming, then rely on the network to fill the rest.

Finally, there’s always FreeDBS. If those folks can really get that project off the ground, it could provide a great example for other folks who want to put something interesting on our TV sets. There’s always hope.

Ocean wave“Something’s comin’ up
And I don’t know what it is
Something’s comin’ up
And I don’t know where it’s gonna take me” –Barry Manilow

My apologies for starting a post with a Barry Manilow lyric. There’s a similar snippet in West Side Story, but that one is more optimistic. “Something’s Comin’ Up” matches what I see – the video viewing world will be much different 10 years from now, but no one knows exactly how it will look. Whether it will be good or bad for us viewers will depend on a lot of factors, especially how fast your internet connection will be.

First comes an amazing story published by Advertising Age. According to report from Horizon Media, the median age for prime-time broadcast TV viewers has gone up by four years during the last four years. That means that there were only as many new, young viewers added as there were older viewers who died. The same median almost-47 year old in 2006 kept watching and became the median almost-51 year old today. (Props to Tod Sacerdoti for mentioning the report on his blog.)

Think about it. This means that very few young people care about broadcast TV. But they do care about the internet. FCC Chairman Julius Genachowski seems to be recognizing and anticipating this shift, finding wireless internet spectrum from mobile satellite services and setting his sights on taking a chunk away from broadcast TV. The broadcasters are fighting hard against this idea even though they’d get paid for relinquishing the space and that, well, they don’t actually own those pieces of spectrum in the first place.

Second, there’s Nielsen’s Law of Internet Bandwidth: A high-end user’s connection speed grows by 50% per year. It used to be crazy to think that every home user could get any channel he wanted, live or on demand, via IP. Now with ever-faster speeds and load-balancing, widely distributed content servers, that’s not so crazy. It used to be easy to say that satellite broadcasting offered the least expensive way to simultaneously reach hundreds of millions of live viewers. At some point, an IP-based delivery system will be cheaper. Already, PBS has announced it will shift some of its non-real-time program delivery from satellite to IP.

Third, more households are cutting back or dropping traditional pay-TV services. A report from Yankee Group said that one in eight would at least cut back in 2010. Add in anecdotal evidence of viewers who are switching to broadcast HDTV with dozens of channels in most markets. With an increasing minority of broadcast TV viewers, maybe it’s not so simple to predict the end of over-the-air TV.

(Or maybe we can anyway. At least one federal spectrum reallocation plan suggested free lifeline cable TV for soon-to-be-former OTA viewers. One TV repeater district servicing far-flung households in rural Nevada suggested switching everyone there to satellite pay-TV.)

So what does it all mean for FTA satellite? Leave a comment and tell me. Meanwhile, I’ve got one crazy prediction that I’ll save for my next post.