At the end of July, Locast, a nonprofit streaming service funded in part by AT&T Inc. and founded by a Dish Network Corp. lobbyist was sued by CBS, ABC, NBC and Fox to shut it down. On yesterday’s Q4 2019 Earnings Call, FOX CEO, Lachlan Murdoch said that “Locast is a rogue streaming service violating the copyright laws for commercial gain, nothing more.” This is follows comments from Sinclair Media Group yesterday, calling it “Aereo 2.0 — really a commercial entity masquerading as a non-profit.”
Murdoch continued, “Locast claim to be a non-profit that is not operating for any direct or indirect commercial advantage is absurd. It operates for the clear commercial benefit of the corporations that support it.” He said FOX is confident in their claim against Locast, and that the “theft is of course a validation of the irreplaceable value of our brands, and the content that they carry.”
Fox, like Sinclair, makes retransmission revenue from cable and streaming services to carry their local affiliates. They also earn money from affiliate agreements with other local affiliate owners. A service like Locast, that provides locals to consumers for a donation, could dramatically eat into their revenue stream if cable, satellite, and streaming companies decide to drop their local affiliates.
Locast bears similarities to Aereo, which was launched in 2012, but shut down through a Supreme Court decision in 2014. The main difference being that Aereo was for-profit and offered a DVR service for the content.
Locast is arguing that it is well within the 1976 Copyright Act, which allows for nonprofits to operate so-called booster and translator stations that strengthen a TV station’s signal to reach antennas that otherwise wouldn’t receive the channel.
While the service relies on donations from users, they recently received a $500,000 contribution from AT&T and another $800,000 from IOT Broadband LLC, a firm owned by former Dish executive Michael Kelly. To date, Locast says it has signed up more than 250,000 users and while it’s not yet available nationwide, it is present in many of the country’s largest TV markets and reaches more than 30 million households.