The Supreme Court’s ruling on ABC and Broadcasters v. Aereo was taken at first blush as further ossification of the status quo. It seemed like the defeat of the phenomenon of cord cutting—a movement that just needed those last few channels, the broadcast Networks, to feel complete. But  the ruling contains a hidden boon for FilmOn Networks and other streaming TV companies. In fact it’s on almost every page of the opinion: By defining the services as cable companies the Supreme Court provided a path to finally change the way consumers get their television and unpack the bundle that the cable companies have used to milk consumers for so long.

Even the Parents Television Council, which general concerns itself with issues of decency on television, lamented the seeming return to business as usual, “Aereo had the potential to break up the bundled-channel cable TV model that is forcing Americans to pay higher cable bills year after year for channels they don’t want or don’t watch,” said PTC President Tim Winter.

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Delivering the Court’s opinion, Justice Breyer defined companies like FilmOn as cable companies, meaning they will fall under the Copyright Act of 1976 which states, in section 111, that it is compulsory for the networks to provide their signals to cable carriers for a fee. Congress established, “a program of compulsory copyright licensing that permits cable systems to retransmit distant broadcast signals without securing permission from the copyright owner and, in turn, requires each system to pay royalty fees to a central royalty fund based on a percentage of its gross revenues.” Capital Cities Cable Inc. v. Crisp, 467 U.S. 691, 709 (1984)

Breyer said in the opinion,  “Aereo’s activities are substantially similar to those of the CATV companies that Congress amended the law to reach.”  The likeness is called “overwhelming” and explained in great detail. In fact the opinion uses the sameness between the streaming TV services and cable systems as the very anchor of its argument against the remote antenna systems that Aereo and FilmOn created.

According to the Copyright Act, the Networks cannot pick and chose who they like and don’t like because it is a duty to offer their signals–which is part of the privilege of using the public owned airwaves.

Alki David, the CEO of FilmOn, says, “I have always said this was an acceptable alternative path: consumers get the TV they want on their own terms, advertisers get a vast new segment of viewers hey have no access to now, and the Networks win too by getting the fees I have always been willing to pay.”

Indeed in an amicus brief filed with the Supreme Court in April by FilmOn on Aereo’s behalf, it was suggested as an alternative route should the court decide against the remote antenna business. “FilmOn is willing and able to comply with all the procedural requirements of the compulsory licensing program,” the brief stated clearly. “Including the payment of royalty fees to the Copyright Office.” Read the full amicus here.

In a an astute take on the situation, Joshua Brustien of Bloomberg BusinessWeek wrote, “Aereo is finished, and the future of TV looks fine.”

FilmOn is finalizing the certification process and will very soon be able to provide local Network TV service in the 18 cities where it already has the infrastructure in place: Atlanta, Baltimore, Boston, Chicago, Denver, Los Angles, Miami, New York, North Bergen, Phoenix, San Antonio, San Diego, San Francisco, San Jose, Tampa and Washington D.C.

In order to become the biggest streaming TV service, with the most to offer its customers, FilmOn Networks has been on an acquisition binge purchasing historic libraries with massive amounts of content. The libraries have included classic films by top directors such as Stanley Kubrick, Alfred Hitchcock, John Huston, Frank Capra, and Pier Paolo Pasolini. They’ve also included footage from the early days of television, the Olympics and news coverage of events such as the Kennedy Assassination.  FilmOn has also built a state of the art conversion facility in Irvine, CA in order to preserve film and video for future generations.

The new broadcast service will supplement the 600 licensed channels already offers along with its more than 45,000 VoDs.  FilmOn’s basic service, which includes DVR use, is free, with some channels and additional DVR service costing a small subscription fee.


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