Aereo FilmOn

The same day that the Supreme Court ruled against the use of remote antennas in the case of ABC v. Aereo, the  CEO of streaming TV giant FilmO Networks, Alki David, announced his next move. In Justice Stephen Breyers‘ opinion there was elaboratly explained reasoning of why the streaming TV services should be regulated exactly as cable companies–something David has wanted  all along.

It was in the amicus brief FilmOn filed on behalf of Aereo with the Supreme Court in April, and it was in discussion, and the subject of lawsuits, going back to 2009: If the streaming TV company qualified as a cable company, than it could also invoke the copyright act of 1976 to get compulsory license. That means it has a right to stream broadcast signals to paying customers, so long as it paid royalties to the Copyright Office.

As Aereo pulled the plug on its service, and it’s two leaders Barry Diller and Chet Kinojia scrambled to get their story straight (“We have no business plan” became “We’re working on it” became “Let’s see what Alki does”), FilmOn announced it had refiled for compulsory license with the Copyright Office, moved its broadcast streams behind the paywall, continued to add content it owns at an astonishing pace, and was happily, and healthily, still in business.

Now top analysts have taken notice. On Friday in the Wall Street Journal, BTIG analyst Rich Greenfield, perhaps the most widely known and influential in the tech industry, declared FilmOn’s business plan “Financial Nirvana.” And went on to say in his interview with journalist Keach Hagey that he believes the FCC will eventually have to classify online video providers as MVPDs, as companies like Dish, Verizon, Sony and others come out with Web-TV services. “It is hard to imagine the FCC not revising its definitions,”  Greenfield said. Aereo declined to participate in the story.

In Forbes, disinguished tech journalist Mark Rogowsky compared the Supreme Court’s decision to the legal ruling on Barack Obama‘s Affordable Care Act in 2012–in which the penalty for not carrying insurance was deemed “a tax” and by doing that the overall ACA was deemed legal. Rogowsky points out that David has been making this argument for 4 years. “Our argument in 2010 was we’re a cable system,” Rogowsky quotes David saying. “Judge Buchwald didn’t understand U-verse and Fios was the same essential technology.”

There’s essentially no difference between what FilmOn wants to do and what AT&T and Verizon already do.

Rogowsky writes of Aereo’s playing catch up with FilmOn: “Aereo had argued that without a favorable Supreme Court ruling, it had no future. But by looking farther into the past, it’s now seeing things differently. Yet the company again finds itself hoping for a favorable outcome at the hands of a federal court. As Yogi Berra once said, ‘Its like deja vu all over again.'”

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An extensive interview in the industry insider newsletter TV Technology by Mark Grotticelli outlined the issues in depth.

“I have always been willing to pay royalties,” David said told Grotticelli. “I’ve been in the entertainment business a long time and own a lot of content. In fact, we license 98.2 percent of the content on the platform. The majority of the content is subsidized by ads.”

When asked about different possibilities for FilmOn Networks going forward, David responded: “Today there are many players looking to come together to create a force to be reckoned with,” David said. “As much as there are old media companies that have interest in the online world, there are plenty of new media companies and plenty of new partnerships to be made. I believe my company has done that. We’re well funded, because I’m fortunate enough to have enough money to stay in the fight and follow the vision, so we’re not done yet.”

He goes on to say: “I’ve been in talks in the past about merging with other companies, and I do see a time when we might have to consider becoming larger and stronger with the help of a major partner,” he said. “I look into my heart and if I honestly feel that what I am doing is right, exciting and innovative, then it’s worth it. I try not to be the judge of whose moral compass is moving in the right direction. When I look at mine, I think I’m okay. ”

Find out more about FilmOn here.

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