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Locast Suspends Donation Requirement to Stream Local Streaming Service

Jason Gurwin

Update 9/2: As of this morning, Locast announced that they would be suspending operations.

After a damning judgment yesterday, which rendered Locast ineligible to use the copyright exemption for non-profits, which could allow them to stream local channels without paying broadcasters, Locast is dropping their donation requirement.

Locast announced that they will be “suspending immediately all programming interruptions to request donations.” Previously, customers had to pay $5.50 monthly donation, or their stream would cut out every 15 minutes.

In a statement, Locast says:

As you probably know, the federal district court in the Southern District of New York issued a ruling in the case brought against Locast by the big media companies. The court concluded that by interrupting programming to ask users for donations, and by suspending those interruptions based on whether a user makes contributions, Locast actually was charging a fee, not merely seeking a voluntary contribution.

The court then concluded that revenues Locast collects in this manner exceed the cost of operating the service because funds are used to add new markets, rendering Locast ineligible to use the copyright exemption for non-profits (17 U.S.C. 111(a)(5)).

Yesterday, a copyright infringement lawsuit by ABC, CBS, Fox, and NBC was allowed to continue after Locast, the donation-based streaming service, was denied a summary judgement, while the broadcasters were granted a partial summary judgement in their favor.

Judge Louis Stanton, a federal judge in New York, denied Locast’s request for a summary judgement, saying “Based on the undisputed facts, it is clear that the Locast service is not offered without charges other than those necessary to defray the actual and reasonable costs of maintaining and operating’ its service.”

As part of the judgement, it was disclosed that Locast generated more than $4.3 million revenue, netting $1.9 million after $2.4 million in operational expenses. The Judge stated that the requirement to pay to avoid interruptions, is “not merely a recurring gift to a charitable cause.”

Locast contends that the profits are used to expand to new markets, which the Judge explained is not part of the exemption.

In a statement, Locast’s attorney R. David Hosp, Partner Orrick, Herrington & Sutcliffe said:

“We are disappointed in the ruling today and disagree with its conclusions and reasoning. Our client is in the process of evaluating the decision and formulating next steps. Locast provides a valuable service to its over 3 million users who are otherwise unable to access the over-the-air broadcasts to which they are entitled by virtue of their location or economic circumstances. Our client remains committed to its mission of delivering free, local broadcast TV service to all Americans, and particularly for those consumers who can’t afford pay-TV services like cable, satellite, or streaming, or who can’t get their local broadcast channels using an over-the-air antenna.”

If the case proceeds to trial, the court will now have to set a date. The Big Four media companies have already requested that it be pushed to 2022.

This is of particular interest to Sling TV subscribers, since the service allows for Locast integration and Sling doesn’t offer ABC or CBS in any of its packages. With this latest move, Sling TV subscribers should be able to add the service without restriction or cost.

It remains to be seen if Locast can survive on donations alone. It’s possible the service could reinstate its paywall in the future, but that may depend on the result of these legal proceedings.

Locast

Locast is a live TV streaming service offering access to local TV affiliates in 36 markets. The service has been suspended because of a legal fight with broadcasters. Whether or not it returns, viewers have other options to watch local channels for free.

While the service could be used for free, users who didn’t pay for the membership tier would get a prompt to donate every 15 minutes. After the prompt, users were kicked back to the home screen and booted off the channel they were watching.

Locast could be viewed within Sling TV on select devices.

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