A US Internet Company that has been offering Australians access to live US TV shows such as the Mentalist, Law & Order and Two & a Half Men prior to the shows being aired in Australia is now being sued by several major US networks.
The service that was available for a subscription fee of $5.36 a month in Australia, has been described as being a breach of copyright laws in the USA.
A judge in New York has scheduled a hearing for Monday US time (Tuesday) in Australia, on the networks’ request for a temporary restraining order against Ivi Inc who are supplying content to Australian’s and FilmOn.com Inc.
The way in which the service operates is that the US Internet Companies take the free to air broadcasts and convert them into an Internet stream without paying royalties to the content provider.
The Internet Companies claim that they have the right to distribute the networks under a provision in the U.S. Copyright Act.
According to Ivi executives several Australian users have signed up for the service which was launched 2 months ago into Australia.
Ivi claims that they are not governed by a separate communications statute that requires cable and satellite companies to negotiate licenses with content owners before transmitting their networks.
The Wall street Journal claims that media companies disagree, arguing the fledgling companies don’t qualify as “cable systems” or “passive carriers” entitled to protections in the Copyright Act. NBC Universal, Walt Disney Co.’s ABC, CBS, News Corp.’s Fox and other content owners filed separate suits against each company in the U.S. District Court of the Southern District of New York last week.
Earlier Ivi had filed a suit in a U.S. District Court in Seattle, seeking a judge to rule that Ivi isn’t infringing on media companies’ copyrights.
In what is developing as a cat and mouse game the real threat is that if Ivi win their case they could erode the media companies’ businesses by delivering content in cheaper and more accessible ways out of the control of the media Companies that are putting to air says the Wall street Journal that is also owned by News Corporation.
In Australia the real threat is that free to air TV networks that have to pay millions for access to the same content that Ivi is putting to air at $5.36 a month, will see their content made available ahead of when they normally put the content to air in Australia.
This coupled with the advent of fast fibre networks, such as what is being offered via the NBN would result in Australian consumers having access to content as it goes to air in the USA.
The WSJ said that he stakes are becoming higher in television as technology that allows companies to stream large quantities of video at high qualities becomes more advanced and easier for viewers to use.
Real-time entertainment, including video streaming, now accounts for about 43% of North American Internet traffic, according to Internet-network-management Company Sandvine.
FilmOn which is owned by a UK business magnate also offers its service on iPad’s and mobile devices. Ivi, which has been developing its technology for years, launched its latest service to the public in September.
Ivi’s CEO, Mr. Weaver, told the WSJ that he is fighting the same legal battle cable and satellite companies did in previous decades as they sought the right to distribute TV broadcast networks. Mr. Weaver said he hopes that the Federal Communications Commission will recognize Ivi’s service as a new category of online cable company with the same rights as cable and satellite companies, which could force broadcasters to negotiate with the company, something he said they have been unwilling to do. “The problem is we are left out of an even playing field,” Mr. Weaver said.