Is Ivi DOA?

So there is another start-up with a great idea. It goes like this, “Let’s be disruptive and pull TV signals off-air, stream them on the internet and charge a fee to subscribers to watch them.” Seattle based Ivi thinks they have a solid business case and an iron-clad legal argument that permits them to do this. However, broadcasters and other content owners think differently and have quickly slapped them with Cease and Desist letters.

Here’s the crux of the matter, Ivi argues that proposed payment to the Copyright Royalty Tribunal (CRT) obviate the need to pay stations directly or to even have an agreement in place with the broadcasters. However, it seems that Ivi’s logic is a bit clouded. They are leaning on payment to the CRT arguing that they are operating just as any other cable operator, but are ignoring retransmission consent saying that they are not a cable operator. Seemingly, Ivi wants it both ways.

For a start-up with less than $1 million in financing, it looks like Ivi will be spending all of their seed money on lawyers. They’ve already countersued the broadcasters and rights holders that have taken action against them; asking the local district court in Seattle to issue a declaratory ruling in their favor.

It seems to me that if you could lean on payments to the CRT to avoid negotiating retransmission consent, the cable guys would have done so long ago and live internet streaming of broadcast TV would be the norm. Along with the rest of the industry, I’ll be keeping an eye on this. For now it seems that the cards are stacked against Ivi.