Thursday, August 02, 2012

Aereo opens the floodgates in New York, while FilmOn comes back around for another run

According to CNET News, Aereo, the "broadcast TV over the Internet" startup partially funded by IAC, is opening its service to anyone in New York City, and has announced new pricing plans, including a free tier. Aereo's original $12/month plan is still offered, with online viewing of most broadcast stations in the New York metropolitan area and 40 hours of HD DVR space. Today, Aereo announced three new plans: An $8/month plan with 20 hours of DVR space, a $1/day plan with 3 hours of DVR space, and a free plan that allows viewing of up to one hour a day, with no DVR space. In addition, Aereo is offering an annual plan with the features of the original $12/month plan, for $80/year. The free plan is a "no-brainer" way for potential subscribers to try out Aereo.

On the West Coast, The Hollywood Reporter writes that FilmOn, which has been in a three-year battle with broadcasters, broadcast and cable networks over its over-the-top Internet service, has entered into a settlement in which the company reportedly agreed to pay $1.6 million and accepted a permanent injunction on FilmOn's service. However, that hasn't stopped company owner Alki David, who claims that he's deployed "more than 2.6 million television antennas and large RAID drives in major cities all over the country," and intends to relaunch the FilmOn service using the same technology and legal arguments as Aereo. David doesn't believe that the permanent injunction covers his new service. In addition, he plans to launch an "over-the-air premium channel" by the end of the year, starting with station KHIZ in Los Angeles.

If David launches his new incarnation of FilmOn before the Aereo case is resolved, it's very likely that the plaintiffs that he just settled with will file for an emergency injunction and request damages, and the court with which the confidential settlement was filed may go after David for contempt of court, which could lead to additional damages and possibly even some jail time. In addition, FilmOn's service may violate some of Aereo's patents.

It's unclear why David doesn't just wait until the New York Federal Court rules on Aereo. If the court allows Aereo to continue in operation, David could safely launch a similar service based on the same principles, so long as it doesn't violate Aereo's patents. If the court shuts down Aereo, FilmOn will likely be shut down as well. I don't want to try to figure out his logic, but he's acting like a rich guy who doesn't really care what U.S. courts say.
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