A federal appeals court is dealing a death blow to an upstart service that streams broadcast television over the internet, ruling that ivi Inc. is not a cable system and therefore is not protected by the Copyright Act.
In a case brought by the major over-the-air U.S. broadcasters ABC, NBC, CBS, Fox and others, the 2nd U.S. Circuit Court of Appeals said those broadcasters do not have to automatically license their content to internet streaming services because ivi is not a traditional “cable” company. The U.S. Copyright Act requires that broadcasters license their content to satellite and cable companies under a regulated pricing scheme known as compulsory licensing — but not to online streaming services such as ivi, which in 2010 began streaming broadcast television shows from the Seattle, Los Angeles, Chicago and New York markets to users across the country for $5 monthly.
The New York-based appeals court ruled:
The absence of a preliminary injunction would encourage current and prospective retransmission rights holders, as well as other Internet services, to follow ivi’s lead in retransmitting plaintiffs’ copyrighted programming without their consent. The strength of plaintiffs’ negotiating platform and business model would decline. The quantity and quality of efforts put into creating television programming, retransmission and advertising revenues, distribution models and schedules — all would be adversely affected. These harms would extend to other copyright holders of television programming. Continued live retransmissions of copyrighted television programming over the Internet without consent would thus threaten to destabilize the entire industry.