FilmOn contempt fine

Internet TV streaming service FilmOn has received a further setback in its attempts to operate and be licensed to carry broadcast programming as a cable company similar to other multichannel providers, with US District Judge Naomi Reice Buchwald ruling that it was in contempt for continuing to deliver network TV station signals over its OTT streaming service following the Supreme Court ruling that found similar service Aereo had breached broadcasters’ copyright.

The contempt hearing continued a 2010 lawsuit by broadcasters against FilmOn, which resulted in an Injunction prohibiting FilmOn from infringing broadcasters’ copyrights. Judge Buchwald referred to the law of the Second Circuit, which says that Internet streaming does not qualify for a compulsory licence, “FilmOn is not entitled to a license under § 111, and its retransmissions clearly and unambiguously fall under the scope of conduct barred by the Injunction,” she said.

“We find FilmOn in civil contempt of court for its violation of the Injunction. FilmOn must pay $10,000 for each of the nine days of its noncompliance. Therefore, we impose a sanction of $90,000. We also reiterate that while it appears that defendant has ceased streaming plaintiffs’ programming, such conduct is covered by the Injunction and future retransmission of plaintiffs’ copyrighted content without a license will subject defendant to significant penalties per day of noncompliance,” she advised.

Judge Buchwald said that based on the law of the Second Circuit, which has ruled that Internet streaming does not qualify for a compulsory license, “FilmOn is not entitled to a license under § 111, and its retransmissions clearly and unambiguously fall under the scope of conduct barred by the Injunction.”

 

FilmOn says it will appeal the decision.

 

“We find FilmOn in civil contempt of court for its violation of the Injunction,” she said in an opinion released Friday. “FilmOn must pay $10,000 for each of the nine days of its noncompliance. Therefore, we impose a sanction of $90,000. We also reiterate that while it appears that defendant has ceased streaming plaintiffs’ programming, such conduct is covered by the Injunction and future retransmission of plaintiffs’ copyrighted content without a license will subject defendant to  significant penalties per day of noncompliance.”

- See more at: http://www.multichannel.com/news/technology/court-finds-filmon-contempt/382742#sthash.4suIyswe.dpuf

Judge Buchwald said that based on the law of the Second Circuit, which has ruled that Internet streaming does not qualify for a compulsory license, “FilmOn is not entitled to a license under § 111, and its retransmissions clearly and unambiguously fall under the scope of conduct barred by the Injunction.”

 

FilmOn says it will appeal the decision.

 

“We find FilmOn in civil contempt of court for its violation of the Injunction,” she said in an opinion released Friday. “FilmOn must pay $10,000 for each of the nine days of its noncompliance. Therefore, we impose a sanction of $90,000. We also reiterate that while it appears that defendant has ceased streaming plaintiffs’ programming, such conduct is covered by the Injunction and future retransmission of plaintiffs’ copyrighted content without a license will subject defendant to  significant penalties per day of noncompliance.”

- See more at: http://www.multichannel.com/news/technology/court-finds-filmon-contempt/382742#sthash.4suIyswe.dpuf

Judge Buchwald said that based on the law of the Second Circuit, which has ruled that Internet streaming does not qualify for a compulsory license, “FilmOn is not entitled to a license under § 111, and its retransmissions clearly and unambiguously fall under the scope of conduct barred by the Injunction.”

 

FilmOn says it will appeal the decision.

 

“We find FilmOn in civil contempt of court for its violation of the Injunction,” she said in an opinion released Friday. “FilmOn must pay $10,000 for each of the nine days of its noncompliance. Therefore, we impose a sanction of $90,000. We also reiterate that while it appears that defendant has ceased streaming plaintiffs’ programming, such conduct is covered by the Injunction and future retransmission of plaintiffs’ copyrighted content without a license will subject defendant to  significant penalties per day of noncompliance.”

- See more at: http://www.multichannel.com/news/technology/court-finds-filmon-contempt/382742#sthash.4suIyswe.dpuf

Judge Buchwald had earlier said she was inclined to grant a contempt motion, saying the company should have removed the broadcasters’ programmes as soon as the Supreme Court ruled against Aereo, stating: “The day the Supreme Court decided Aereo, you no longer had the cover of the Second Circuit’s opinion. On that day, FilmOn X should have pulled all of the content.”

Following Aereo’s entry into the OTT streaming market, FilmOn said that it would also use multiple-antenna technology, early in 2014, launching what it described as its ‘Teleporter’ technology.

Buchwald said that even though Aereo may have been described as “very similar” to a cable system, this was “not the same as a judicial finding that Aereo and it technological peers are, in fact, cable companies entitled to retransmission licenses under the Copyright Act”.

She nevertheless suggested that FilmOn should have first obtained the licence from the Copyright Office before streaming the signals, despite the Office so far refusing to grant such licences.

Despite this latest setback, FilmOn still has a viable business model, according to Mike Paxton, Senior Analyst at SNL Kagan MRG.“Regardless of the actual outcome of the court cases facing FilmOn, SNL Kagan MRG believes that the online/OTT video market is poised to expand rapidly over the next few years. FilmOn’s core business is in the ‘freemium’ or ad-supported side of the market, which is a growth market. At the same time, the worldwide subscription VoD (SVoD) business, a service capability that FilmOn also offers, is also on track to experience solid growth,” wrote Paxton earlier in 2014.

“Unlike Aereo, which relies on its antenna farm business to generate the vast majority of its revenues, FilmOn’s antenna farm segment is just a small part of its overall business. This means that if the Supreme Court decides for the broadcasters, then Aereo will have to either drastically change its business model or possibly even shut down. This will not be the case at FilmOn. Again, assuming the high court decides for the broadcasters and against Aereo, FilmOn will still have a diverse and viable business model, even if it has to shut down its antenna farms in the US,” he advised.

Aereo has “temporarily” paused its operation, and has submitted licensing applications to the Copyright Office, which indicate it ended 2013 with just 77,596 subscribers, across 10 cities. Some 27,000 of those were in the New York City area, Aereo’s launch market in 2012. Boston, launched spring 2013, had 12,000 subscribers with the Atlanta area numbering 10,000 subscribers.

The Copyright Office has informed Aereo that it does not consider it to be a ‘cable company’ under the terms of copyright law.

“In the view of the Copyright Office, Internet retransmissions of broadcast television fall outside the scope of the Section 111 licence,” wrote the Copyright Office in its response to Aereo’s Section 111 Statement of Account Filing, adding that it did not see anything in the Supreme Court’s recent decision in American Broadcasting Cos. v. Aereo Inc. that would alter its conclusion.

Nevertheless, the Copyright Office confirmed it will accept Aereo’s filings on a provisional basis because Aereo has also put the issue before federal court in New York. “Aereo should be aware that, depending upon further regulatory or judicial developments, and/or based upon the Office’s own further review of the issue, the Office may subsequently determine that it is appropriate to take definitive action on Aereo’s filings, which could include rejection of the statements,” it advised.

Posted by on Jul 28 2014. Filed under Articles, Broadcast, FTA, IPTV, OTT, Policy, Regulation.

Search Archive

Search by Date
Search by Category
Search by keyword
Copyright Advanced Television Ltd © 2001-2014