Are TV Stations Helping IVI?

In the last week, ivi.tv has come on the scene and promises a disruptive approach to TV.  Cable television without the cable.  The company re-transmits broadcast signals under the compulsory licensing regime of the US copyright office.  Ivi even allows users outside the US to watch US broadcast TV.

The product is slick.  The quality seems good so far, and I hope it will not degrade over time.  You are limited to live television with basic pause / play functions - pause, rewind, etc., but no true recording yet.  There's a nice selection of the top US networks as well as some minor ones.

Screen Capture from ivi.tv application on the Mac

I immediately subscribed just to try it out.  That said, a few days after subscribing, I don't find myself using it.  The reason: I get my news on the web (not video), I don't watch sports, and I like my entertainment on demand.  Indeed, it reminded me how little I depend on live television in my daily life anymore.  But I am not typical.  For sports fans overseas, this has be a great find and far better value than any of the online services offered to-date.

Reaction has pretty similar across the internet to this new service:

1. It works pretty nicely.
2. It's disruptive to existing players
3. Nobody is sure if it is legal

The most print has been focused on the question of legality.  A great blog entry (link) examines their position and compares it to what is known.  The copyright office seems to have stated quite explicitly that compulsory licensing does not apply to internet services.

I hope that ivi has some novel and important arguments to make the case that it should apply.  I'm no expert in this space, but I do think there should not be a requirement that you string physical cable to a network operator.  As in DSL in Europe, which has had great success, companies should be able to compete with each other on all aspects of the service.

Local TV stations and the broadcast networks should be cheering ivi.  They have long wanted to be paid like any cable network.  If ivi causes the government to re-examine this regime, it could end up being good.  Indeed, at least one blog entry seems to suggest that ivi is capturing broadcast signals at the source with the cooperation of over-the-air broadcasters:

The company has secured the rights to deliver live television feeds from local affiliates in Seattle and New York, with plans to expand to LA, San Francisco and other markets in the near future. Ivi pays the stations an undisclosed amount to pick up the signal, which it does by either placing a physical encoder device at the station or capturing it from satellite or antennae. (Techflash)

Separating content creation, distribution, and physical infrastructure is likely to have a positive effect on competition and consumer value creation, so I hope they achieve some good disruption!