Aileen L. Kim
Radio, broadcast TV, cable TV—and now, streaming services. There was a time when a cable TV subscription was indispensable for anyone owning a TV. However, dominant forms of entertainment have constantly changed over time, and streaming services have become a familiar part of our lives. I did not feel the full force of the change until I learned that Columbia University was phasing out wired cable TV service and switching to a streaming cable TV service for most of its buildings, with the process beginning this fall.[1]
While I could list off the top of my head a number of on-demand platforms—including Netflix, Amazon Prime Video, Disney+, and Hulu—I realized that YouTube TV was the only big name I had heard of when it came to streaming live TV. Intrigued by Columbia’s move from wired service to streaming service for cable programming, I decided to look into other such service providers. It turned out that there are many companies that offer such service, including Hulu + Live TV, DirecTV Stream, FuboTV, and Sling TV. Most of them provide a similar set of channels and at comparable price ranges.[2]
During my search, I learned of Locast, a free streaming service provider that had ceased operations on September 2, 2021.[3] Launched in early 2018, Locast allowed users to stream local TV free of charge. Locast was founded as a nonprofit. The stream would be interrupted every fifteen minutes by a short video that asked for donations to Locast.[4] For five dollars a month, users could enjoy interruption-free streaming.[5] Networks were not happy about this, and they sued Locast in the summer of 2019.[6] Locast argued that its streaming service was legal and protected under Section 111(a)(5) of the Copyright Act of 1976, which allows nonprofit entities to retransmit TV signals under certain conditions without copyright infringement liability.[7] In fact, the founder of Locast has said that he had replied on the language of the statute when founding the nonprofit.[8] However, Judge Louis L. Stanton of the Southern District of New York held on August 31, 2021, that Section 111(a)(5) did not in fact cover Locast’s operations despite the nonprofit status, because Locast was collecting more money than the amount permitted under the statute.[9] On September 15, 2021, Locast was permanently enjoined from offering its streaming service,[10] and Locast later agreed to pay $32 million and remain bound by the permanent injunction in a settlement with the networks.[11] Although at least one commentator has said that it is possible for others to try a different legal approach for providing a free broadcast streaming service despite Locast’s loss,[12] after Locast and Aereo, it might be a while before we see another attempt.
[1] Cable TV, Columbia University Information Technology, https://cuit.columbia.edu/cable-tv (last visited Dec. 9, 2021).
[2] See Best Live TV Streaming Service for Cord-Cutters, CNET, https://www.cnet.com/tech/services-and-software/best-live-tv-streaming-service-for-cord-cutters (last visited Dec. 9, 2021). Sling TV appears to be an exception, operating under a business model that is different from those of its competitors.
[3] Edmund Lee, Locast, A Nonprofit Streaming Service for Local TV, Is Shutting Down, The New York Times (Sept. 2, 2021), https://www.nytimes.com/2021/09/02/business/media/locast-shuts-down.html; Bill Donahue, Locast Suspends Service After Copyright Loss To Networks, Law360 (Sept. 2, 2021, 11:07 AM), https://www.law360.com/articles/1418382; Marc Berman, Locast: Everything You Need to Know About the Streaming Platform Some Called ‘Aereo 2,’ Next TV (Sept. 2, 2021), https://www.nexttv.com/news/locast-everything-need-know-streaming-platform.
[4] Am. Broad. Companies, Inc. v. Goodfriend, No. 19 CIV. 7136 (LLS), 2021 WL 3887592, at *1 (S.D.N.Y. Aug. 31, 2021).
[5] Id.
[6] Joe Flint & Drew FitzGerald, Networks Sue to Stop Streaming Service Offering Free TV Feeds, The Wall Street Journal (July 31, 2019, 4:55 PM), https://www.wsj.com/articles/networks-sue-to-stop-streaming-service-offering-free-tv-feeds-11564584062; Bill Donahue, TV Networks Sue Aereo-Like Streaming Service, Law360 (July 31, 2019, 12:53 PM), https://www.law360.com/articles/1183938.
[7] 17 U.S.C. § 111(a)(5) reads:
111. Limitations on exclusive rights: Secondary transmissions of broadcast programming by cable
(a) CERTAIN SECONDARY TRANSMISSIONS EXEMPTED.—The secondary transmission of a performance or display of a work embodied in a primary transmission is not an infringement of copyright if—
. . .
(5) the secondary transmission is not made by a cable system but is made by a governmental body, or other nonprofit organization, without any purpose of direct or indirect commercial advantage, and without charge to the recipients of the secondary transmission other than assessments necessary to defray the actual and reasonable costs of maintaining and operating the secondary transmission service.
[8] Daniel Frankel, Locast Founder David Goodfriend: On the Five Spot (Q&A), Next TV (May 10, 2020), https://www.nexttv.com/news/locast-founder-david-goodfriend-on-the-five-spot-qanda.
[9] Am. Broad. Companies, Inc. v. Goodfriend, No. 19 CIV. 7136 (LLS), 2021 WL 3887592, at *2–3 (S.D.N.Y. Aug. 31, 2021).
[10] Order for Permanent Injunction, Am. Broad. Companies, Inc. v. Goodfriend, No. 19 CIV. 7136 (LLS) (S.D.N.Y. Sept. 15, 2021); Kelcee Griffis, Locast Is Permanently Locked Out Of The Streaming Biz, Law360 (Sept. 15, 2021, 6:39 PM), https://www.law360.com/articles/1422228.
[11] Dave Simpson, Locast To Pay $32M To End Networks’ Copyright Claims, Law360 (Oct. 28, 2021, 8:59 PM), https://www.law360.com/articles/1435763.
[12] Kelcee Griffis, Locast Ruling Could Offer Narrow Path For Successor Apps, Law360 (Oct. 1, 2021, 7:15 PM), https://www.law360.com/articles/1427548.