Do you remember Aereo, a plucky little startup from New York City headed by Barry Diller? Aereo wanted to take local, over-the-air broadcasts from major networks, and redistribute them over the internet for a buck a day, or $80 a year. It was a pretty cool idea, except that Aereo and Diller never actually got permission from the broadcasters to do it. That small detail ended up costing the company dearly as it was dragged through the legal system all the way up to the Supreme Court — which ultimately ruled that Aereo had illegally violated the broadcasters’ copyrights. Shortly after this loss, Aereo shut down. Now it seems a similar enterprise called Locast — also an NYC operation — is about to face the same difficulties. Locast is being sued by all four major broadcasters, according to Reuters.
There are a few differences this time around, however. Locast, unlike Aereo, is a nonprofit and does not charge viewers any money to watch its service. It does accept donations through its website. But regardless of its profit motive, it ultimately has the same negative effect on broadcasters’ bottom lines. Because companies like ABC and CBS typically charge cable and satellite operators a “carriage fee” for redistributing their programming, they fear that Locast will erode this revenue stream because it doesn’t pay the broadcasters any money. Locast claims to cover 31% of the U.S. market or over 34 million homes.
Curiously, Locast has been in operation since 2018, and until now, has escaped the legal wrath of the Big Four. So why are they now suing? It could be a case of legal tit for tat. DirecTV owner, AT&T, has been engaged in a protracted contract dispute with CBS and Nexstar over the carriage fees that these companies want to charge DirecTV. In the past, these sorts of disputes have led to stations like CBS being temporarily removed from people’s satellite or cable subscriptions. In May, AT&T added Locast’s app to its DirecTV ad U-verse receivers. As if that wasn’t provocative enough from the broadcasters’ point of view, AT&T followed up in June by announcing a $500,000 donation to Locast.
Did these two moves on AT&T’s part result in Locast finally ending up in the broadcasters’ legal crosshairs, or was this bound to happen sooner or later anyway? We may never know, but one thing is clear: The broadcasters aren’t going to go easy on Locast simply because it’s not engaged in profit generation. “Locast is not the Robin Hood of television,” the lawsuit claims according to Reuters, “instead, Locast’s founding, funding, and operations reveal its decidedly commercial purposes.”
Will Locast prevail where Aereo foundered? We’ll keep you posted.