FilmOn to expand if Aereo successful
April 22, 2014
By Colin Mann
Alki David, the founder of Internet TV streaming service FilmOn, has said he plans to expand the operation should rival service Aereo be successful in its US Supreme Court copyright case brought by the major networks.
“We’re in 18 cities and our model is free,” he told The New York Post. “We’d turn on all over the States and have a far bigger slice of the market than Aereo.”
Should Aereo lose, David says that FilmOn would lose “maybe five per cent” of its revenue, representing ad revenue FilmOn sells against local TV channels.
The Alki David-backed service suffered a setback late January following the decision of an appellate panel that it would not rule on the company’s request to lift an injunction against it until after the Supreme Court decides on the legality of Aereo. The order means that FilmOn X is only able to stream TV shows in three US states: New York, Vermont and Connecticut.
Regardless of how the Supreme Court rules in the forthcoming Aereo case, FilmOn will still have 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,” says Paxton.
Paxton says that 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.”