A panel of experts gathered to discuss the legal implications of new technology and the future of television at New York Law School on Thursday, Oct. 17. The discussion focused on the legalities of Aereo, a TV recording service, and rival product FilmOn X. The event comes just after the “Big Four” broadcasters filed a petition against Aereo in the Supreme Court on Oct. 11. The mostly full auditorium featured a mix of students and professionals who listened intently as the trio of experts debated whether FilmOn and Aereo had legal standing based on existing copyright laws.
The services allow users to watch local over-the-air programming (the kind that could once be picked up by a regular antenna) on the Internet or via devices such as Roku and AppleTV. The companies do this by using tiny antennae to pick up broadcast television signals, storing them in the cloud, and delivering them to subscribers via broadband and mobile. FilmOn’s free service also includes hundreds of licensed channels and videos-on-demand. Aereo’s service charges a monthly fee. (TVmix is owned and operated by FilmOn Networks.)
While broadcasters charge retransmission fees to cable companies to air their channels, these services don’t pay them for the content they provide to their subscribers. This kind of technology is at the forefront of the disruptive changes in the entertainment industry, with customers eschewing expensive cable bills for low-cost streaming services such as FilmOn, Netflix, or Hulu.
Moderator Barry Werbin, the chairman of Herrick Feinstein LLP’s intellectual property and technology group, began the presentation by giving an overview of the court cases that will play a role in the future of Aereo and FilmOn. Aereo has so far withstood injunctions from broadcasters aiming to shut down their operations, including a U.S. District Court case ruling in their favor upheld by the Second Circuit in April. FilmOn, however, has not been so lucky, with the Ninth and D.C. Circuits enforcing injunctions against the company.
Werbin then turned to the panel of legal experts — Jonathan Band, a lawyer with policybandwith; Howard Homonoff, a media consultant with Homonoff Media Group; and Mary Ann Zimmer, an entertainment lawyer — for a discussion on whether the 1976 Copyright Act was effective enough in encompassing new technologies.
At the heart of this discussion was the act’s Transmit Clause, which stated to show a work publicly is “to transmit or otherwise communicate a performance or display of the work…to the public.” Broadcasters contend that Aereo and FilmOn are making public, unauthorized broadcasts, whereas those companies argue that since consumers are watching content via a personal antenna, it is a “private” transmission under copyright.
Zimmer, an entertainment lawyer, said, “Congress tried its best to protect copyright holders’ works no matter what devices or methods were used to reproduce them. [But] the language of the Transmit Clause is so broad … and they’re trying to find this tiny loophole that supposedly Congress never thought of.”
Band contended that the Second Circuit “punted” on the idea of who was doing the transmitting when making their decision, which opens the Transmit Clause to further scrutiny. He explains: “If you say it’s the user who’s making a copy, and it’s the user who’s doing the transmitting, then you need to sort of parse the Transmit Clause. The volitional actor here is the user. And then the question is that Aereo or “Aereo killer” [a previous name for FilmOn] or anyone else, at most, they would have second-hand liability because they are not the volitional actor.”
Band went on to say that if these cases going forward continue to focus on the user rather than the service provider, the outcomes favoring Aereo “make a lot of sense.”
At one point, the music industry’s struggle with new technologies was raised, since the music industry suffered during the late ‘90s and early 2000s when music sharing networks such as Napster cut heavily into their profits.
“We’re moving towards a word of unbundling,” said Band. “Now we have an iTunes world where you only have to buy one track, and you’re not making as much money.”
“Users are coming to expect technology of unbundling, whether its sound recordings or television,” he added. “That’s what the users want, whether the broadcasters like it or not.”
Alki David, CEO of FilmOn.tv Networks, had an interesting perspective on this issue. In a Q&A conducted over Skype from Greece (where it was 4 a.m.), he was asked if he thought there was a difference between the the television and music industry’s situations. (His Aereo counterpart, Chet Kanojia, did not make an appearance.) The question was pertinent since in 2011, he joined a class-action lawsuit against CBS and CNET over their distribution of the (now-disabled) Limewire file-sharing software. (The suit was dropped a few months later.)
“The content that is being distributed on peer-to-peer networks is content that is not freely available to the public,” David responded. “Whereas it’s not as if we’re retransmitting or making available DVR boxes with the NFL Network or Discovery … The content that is available through our antennas is freely available already in the air to the public. And that is a huge difference.”
“We are only offering what is freely available,” he added. “You cannot steal something that is free.”
David also addressed the issue of cord-cutting by noting that the average age of a network television viewer is 50, which means it isn’t likely that they would adapt to the new streaming services available.
“So the cord cutters aren’t cord cutters,” he added. “For the most part, they never had a cord.”
When asked whether he could predict future decisions of Congress or the Supreme Court, he responded, “If I knew, I obviously wouldn’t be sitting here,” evoking laughter from the audience.
“I’ve personally found much more joy in a higher court simply because the district court judges seem totally lunatic,” David added. “I’d be very happy for it to go to as high a court as possible.”