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Controversial TV technology at edge of legal frontier
Wed Jul 6, 2005 3:10 PM BST
By Andrew Wallenstein
LOS ANGELES (Hollywood Reporter) - Days after the Supreme Court
weighed in on digital copyright infringement issues in the MGM
v. Grokster case, select consumer electronics chains began stocking a
product some predict could spark the entertainment industry's next
showdown over intellectual property rights.
New to the shelves of Best Buy and CompUSA this month is Slingbox, a
brick-sized device that enables viewers to route the live television
signal coming into their homes to a portable device anywhere on the
globe via broadband connection. Slingbox costs $250 and has no
subsequent subscription fee; several stores sold out on the first day.
Created by San Mateo, Calif.-based company Sling Media, Slingbox is
the most prominent example of a handful of new ventures trying to
repeat what TiVo achieved through time-shifting with technology
capable of what loosely is referred to as place-shifting. Leading
place-shifting firms even have drawn interest from cable operators
interested in potential partnerships.
But a mechanism that transplants a live video feed also could
potentially relocate its marketers to a federal courtroom, where they
could raise questions about content transmission.
"I'll bet there will be a Supreme Court ruling sometime in the next
decade specifically addressing this issue: Does the consumer have the
right to place-shift as they do time-shift their content?" said Ted
Shelton, chief operating officer of Orb Networks, a competitor to
Sling Media that offers its own place-shifting software online free of
charge.
Orb has been on the market since January, collecting 30,000
subscribers with a software-only technology that requires a TV tuner
card and also can transmit other forms of media stored on a hard
drive.
Place-shifting is problematic to many copyright holders because it
sidesteps what is known in legalese as proximity control, which
restricts the distribution of content to specific regions and
times. It's a standard contractual stipulation for the Motion Picture
Assn. of America, whose member studios license distribution rights to
movies for distinct territories; the National Football League, which
considers geographic limits the linchpin of lucrative television
deals, including its Sunday Ticket pact with DirecTV; and local
television stations, which pony up millions of dollars for exclusive
territorial rights to all kinds of programming.
"Slingbox is one manifestation of what we assume will be a cascade of
similar products that are meant to manipulate our signals in ways that
we think will be harmful to the network-affiliate business, if not the
law," CBS executive vp Martin Franks said.
Putting aside the piracy risks, place-shifting critics offer plenty of
scenarios that put the technology in murky legal territory.
Two Slingbox subscribers could send each other programming unavailable
in their respective areas; an East Coast viewer could stream
"Survivor" to the West Coast three hours early. The West Coast viewer
could return the favor by providing access to a premium channel the
East Coast viewer doesn't pay to receive.
Sling Media CEO Blake Krikorian knows full well the implications of
his product. Mindful of the backlash that derailed Napster, he and
rival executives have been busy reaching out to various sectors of the
entertainment world in hopes of educating and collaborating. He
envisions a host of new revenue opportunities for content owners but
realizes Slingbox requires an industrywide paradigm shift.
"The Internet has changed the meaning of what proximity and geography
is," Krikorian said. "Hollywood needs to step up and deal with it. If
it's disrupting existing business relations, we need to figure out how
the next business models evolve that make it a win-win for the
consumer and the industry."
Krikorian is a Silicon Valley veteran whose love of baseball spurred
him to develop Slingbox; he just wanted to catch live broadcasts of
San Francisco Giants games when he was out of town. Now he could end
up redefining "remote control" with a versatile contraption that drew
huge buzz at January's Consumer Electronics Show.
"I've seen their product, and it's fantastic," said Fred von Lohmann,
senior staff attorney at the Electronic Frontier Foundation, a San
Francisco-based group that lobbies for digital rights on behalf of Web
users against the studios and labels. "To see it is to want it."
Slingbox could have been dubbed Re-DirecTV: It attaches to your cable
box (analog or digital), satellite receiver, digital video recorder or
directly to the television monitor and diverts the signal to a laptop
loaded with Slingbox software. Eventually, Slingbox will be able to
transmit to cell phones, PDAs and other portable devices that connect
to the Internet.
Slingbox might be ideal for keeping tabs on the Giants while
vacationing in Bora Bora, but Krikorian believes the product will be
more popular for less far-flung applications like sneaking a peek at
daytime soap operas on your office cubicle's desktop.
Slingbox isn't alone in the place-shifting category. There are a few
other, more expensive hardware offerings for place-shifters that have
found little traction with consumers, including Sony's Location-Free
Portable Broadband TV and TV2Me. More market entrants are expected.
The king of time-shifting also is involved in place-shifting, albeit
somewhat differently: TiVo's new TiVoToGo offering allows subscribers
to send programming to a portable platform. When TiVoToGo was
announced, it was denounced by the MPAA and NFL as a copyright
violation, but both relented once TiVo agreed that TiVoToGo would only
transmit programs that already were recorded.
Slingbox and others can transmit recorded and live programs, which
could draw fire from any number of quarters. The MPAA is studying
place-shifting technology but has no set course of action.
"We're hopeful Slingbox will incorporate technology that will respect
copyright," said Dean Garfield, vp and director of legal affairs at
MPAA. "You don't have the authority to retransmit license work without
negotiation or authorization."
No media-driven entity is being more zealous in this area than the
NFL, which blitzes copyright infringers with the speed of a
lottery-pick defensive lineman.
With a little trading of account information, Slingbox subscribers
conceivably could make end runs around the NFL's blackout rule, which
eliminates the local broadcast of a game that isn't sold out, and
Sunday Ticket, the subscription package delivering out-of-market games
via DirecTV, which paid the NFL $3.5 billion over five years for
exclusive rights through 2010. The NFL declined comment.
Slingbox also could wreak havoc with affiliates by impairing local
advertisers, who provide targeted commercials, and syndicators, whose
content comes with strings attached related to timing and exclusivity.
"I would be shocked if this were used for commercial purposes and it
wouldn't be a copyright problem," said Greg Schmidt, vp development
and general counsel at LIN TV Corp., which owns 23 TV stations in the
U.S. and Puerto Rico.
The potential for piracy might be Slingbox's least objectionable
attribute.
Slingbox does not engage in file sharing; video can't be sent to more
than one device at a time. But that comes as small comfort to CBS'
Franks, who singled out Slingbox as a security concern at the
network's annual affiliates conference last month in Las Vegas.
"Even if you take it at face value that it is a one-to-one transmittal
device, I don't think it will be very long before some hacker in
Cupertino posts on the Web the way to modify it, the way they modify a
TiVo, that turns it into something that can be tapped by 50 people,"
Franks said.
To Krikorian, place-shifting boils down to a simple principle:
Shouldn't the consumer be entitled to view the content they pay for at
home elsewhere? It's a revolutionary concept at a time when
programmers are eyeing new ancillary revenue streams by charging
viewers additionally for each new platform including the Internet and
cell phones, where TV content will be repurposed.
In Krikorian's view, Slingbox actually could help affiliates who are
seeing these new platforms erode the whole notion of localism. Rather
than be concerned with attracting the eyeballs of visiting viewers who
aren't likely to respond to local advertising because they will spend
most disposable income in their home market, affiliates could be
empowered by Slingbox to send ads to their viewers out of market,
enabling them to shop when they return.
Place-shifting also conceivably could help affiliates face down their
viewers' biggest distraction -- the Internet -- by replanting the TV
signal where they lose viewers' attention most: the computer,
particularly at work.
"The product allows me to reach the consumer in so many ways that they
were starting to lose people," Krikorian said. "Broadcasters would
love to reach you while you're at work."
Place-shifting companies know they can't go it alone. They are talking
to anyone in the entertainment industry who will take their meetings,
and that has included broadcasters, production companies and
distributors.
"Some technology companies have said, 'We can do it, and screw you,' "
said Orb's Shelton. "We've seen this before with Napster. It's not an
effective business model."
One industry sector said to be keenly interested in place-shifting is
cable operators, who sources say see the technology as an inducement
for its subscribers to bundle high-speed data with video. Like TiVo,
Slingbox or Orb eventually could be embedded into operators' set-top
boxes.
One potential problem: Cable operators and the programmers that
maintain concerns over copyright violations often are inside the same
conglomerates.
Comcast Corp. and Time Warner Cable declined comment.
The telecommunications firms already have taken notice. Sprint has
partnered with Orb, which is sold with its broadband product as Sprint
Personal Media Link. Orb also has a deal with Sony Pictures Digital to
run trailers of its upcoming movies. Shelton sees this as a way for
the Hollywood establishment to dip its toe into uncharted waters and
"think through the economics and technology issues necessary to go to
the next step," he said.
If place-shifting catches on, it raises an additional question as to
how those viewers will be tracked. Nielsen Media Research already is
at work on a variety of technologies that would measure place-shifted
viewing but no timetable is on the horizon.
"They are on my dance card," said Scott Brown, Nielsen senior vp
strategic relations, marketing and technology. Brown said he envisions
Slingbox meeting the same gradual success that fueled digital video
recorders.
Reuters/Hollywood Reporter
Wed Jul 6, 2005 3:10 PM BST
By Andrew Wallenstein
LOS ANGELES (Hollywood Reporter) - Days after the Supreme Court
weighed in on digital copyright infringement issues in the MGM
v. Grokster case, select consumer electronics chains began stocking a
product some predict could spark the entertainment industry's next
showdown over intellectual property rights.
New to the shelves of Best Buy and CompUSA this month is Slingbox, a
brick-sized device that enables viewers to route the live television
signal coming into their homes to a portable device anywhere on the
globe via broadband connection. Slingbox costs $250 and has no
subsequent subscription fee; several stores sold out on the first day.
Created by San Mateo, Calif.-based company Sling Media, Slingbox is
the most prominent example of a handful of new ventures trying to
repeat what TiVo achieved through time-shifting with technology
capable of what loosely is referred to as place-shifting. Leading
place-shifting firms even have drawn interest from cable operators
interested in potential partnerships.
But a mechanism that transplants a live video feed also could
potentially relocate its marketers to a federal courtroom, where they
could raise questions about content transmission.
"I'll bet there will be a Supreme Court ruling sometime in the next
decade specifically addressing this issue: Does the consumer have the
right to place-shift as they do time-shift their content?" said Ted
Shelton, chief operating officer of Orb Networks, a competitor to
Sling Media that offers its own place-shifting software online free of
charge.
Orb has been on the market since January, collecting 30,000
subscribers with a software-only technology that requires a TV tuner
card and also can transmit other forms of media stored on a hard
drive.
Place-shifting is problematic to many copyright holders because it
sidesteps what is known in legalese as proximity control, which
restricts the distribution of content to specific regions and
times. It's a standard contractual stipulation for the Motion Picture
Assn. of America, whose member studios license distribution rights to
movies for distinct territories; the National Football League, which
considers geographic limits the linchpin of lucrative television
deals, including its Sunday Ticket pact with DirecTV; and local
television stations, which pony up millions of dollars for exclusive
territorial rights to all kinds of programming.
"Slingbox is one manifestation of what we assume will be a cascade of
similar products that are meant to manipulate our signals in ways that
we think will be harmful to the network-affiliate business, if not the
law," CBS executive vp Martin Franks said.
Putting aside the piracy risks, place-shifting critics offer plenty of
scenarios that put the technology in murky legal territory.
Two Slingbox subscribers could send each other programming unavailable
in their respective areas; an East Coast viewer could stream
"Survivor" to the West Coast three hours early. The West Coast viewer
could return the favor by providing access to a premium channel the
East Coast viewer doesn't pay to receive.
Sling Media CEO Blake Krikorian knows full well the implications of
his product. Mindful of the backlash that derailed Napster, he and
rival executives have been busy reaching out to various sectors of the
entertainment world in hopes of educating and collaborating. He
envisions a host of new revenue opportunities for content owners but
realizes Slingbox requires an industrywide paradigm shift.
"The Internet has changed the meaning of what proximity and geography
is," Krikorian said. "Hollywood needs to step up and deal with it. If
it's disrupting existing business relations, we need to figure out how
the next business models evolve that make it a win-win for the
consumer and the industry."
Krikorian is a Silicon Valley veteran whose love of baseball spurred
him to develop Slingbox; he just wanted to catch live broadcasts of
San Francisco Giants games when he was out of town. Now he could end
up redefining "remote control" with a versatile contraption that drew
huge buzz at January's Consumer Electronics Show.
"I've seen their product, and it's fantastic," said Fred von Lohmann,
senior staff attorney at the Electronic Frontier Foundation, a San
Francisco-based group that lobbies for digital rights on behalf of Web
users against the studios and labels. "To see it is to want it."
Slingbox could have been dubbed Re-DirecTV: It attaches to your cable
box (analog or digital), satellite receiver, digital video recorder or
directly to the television monitor and diverts the signal to a laptop
loaded with Slingbox software. Eventually, Slingbox will be able to
transmit to cell phones, PDAs and other portable devices that connect
to the Internet.
Slingbox might be ideal for keeping tabs on the Giants while
vacationing in Bora Bora, but Krikorian believes the product will be
more popular for less far-flung applications like sneaking a peek at
daytime soap operas on your office cubicle's desktop.
Slingbox isn't alone in the place-shifting category. There are a few
other, more expensive hardware offerings for place-shifters that have
found little traction with consumers, including Sony's Location-Free
Portable Broadband TV and TV2Me. More market entrants are expected.
The king of time-shifting also is involved in place-shifting, albeit
somewhat differently: TiVo's new TiVoToGo offering allows subscribers
to send programming to a portable platform. When TiVoToGo was
announced, it was denounced by the MPAA and NFL as a copyright
violation, but both relented once TiVo agreed that TiVoToGo would only
transmit programs that already were recorded.
Slingbox and others can transmit recorded and live programs, which
could draw fire from any number of quarters. The MPAA is studying
place-shifting technology but has no set course of action.
"We're hopeful Slingbox will incorporate technology that will respect
copyright," said Dean Garfield, vp and director of legal affairs at
MPAA. "You don't have the authority to retransmit license work without
negotiation or authorization."
No media-driven entity is being more zealous in this area than the
NFL, which blitzes copyright infringers with the speed of a
lottery-pick defensive lineman.
With a little trading of account information, Slingbox subscribers
conceivably could make end runs around the NFL's blackout rule, which
eliminates the local broadcast of a game that isn't sold out, and
Sunday Ticket, the subscription package delivering out-of-market games
via DirecTV, which paid the NFL $3.5 billion over five years for
exclusive rights through 2010. The NFL declined comment.
Slingbox also could wreak havoc with affiliates by impairing local
advertisers, who provide targeted commercials, and syndicators, whose
content comes with strings attached related to timing and exclusivity.
"I would be shocked if this were used for commercial purposes and it
wouldn't be a copyright problem," said Greg Schmidt, vp development
and general counsel at LIN TV Corp., which owns 23 TV stations in the
U.S. and Puerto Rico.
The potential for piracy might be Slingbox's least objectionable
attribute.
Slingbox does not engage in file sharing; video can't be sent to more
than one device at a time. But that comes as small comfort to CBS'
Franks, who singled out Slingbox as a security concern at the
network's annual affiliates conference last month in Las Vegas.
"Even if you take it at face value that it is a one-to-one transmittal
device, I don't think it will be very long before some hacker in
Cupertino posts on the Web the way to modify it, the way they modify a
TiVo, that turns it into something that can be tapped by 50 people,"
Franks said.
To Krikorian, place-shifting boils down to a simple principle:
Shouldn't the consumer be entitled to view the content they pay for at
home elsewhere? It's a revolutionary concept at a time when
programmers are eyeing new ancillary revenue streams by charging
viewers additionally for each new platform including the Internet and
cell phones, where TV content will be repurposed.
In Krikorian's view, Slingbox actually could help affiliates who are
seeing these new platforms erode the whole notion of localism. Rather
than be concerned with attracting the eyeballs of visiting viewers who
aren't likely to respond to local advertising because they will spend
most disposable income in their home market, affiliates could be
empowered by Slingbox to send ads to their viewers out of market,
enabling them to shop when they return.
Place-shifting also conceivably could help affiliates face down their
viewers' biggest distraction -- the Internet -- by replanting the TV
signal where they lose viewers' attention most: the computer,
particularly at work.
"The product allows me to reach the consumer in so many ways that they
were starting to lose people," Krikorian said. "Broadcasters would
love to reach you while you're at work."
Place-shifting companies know they can't go it alone. They are talking
to anyone in the entertainment industry who will take their meetings,
and that has included broadcasters, production companies and
distributors.
"Some technology companies have said, 'We can do it, and screw you,' "
said Orb's Shelton. "We've seen this before with Napster. It's not an
effective business model."
One industry sector said to be keenly interested in place-shifting is
cable operators, who sources say see the technology as an inducement
for its subscribers to bundle high-speed data with video. Like TiVo,
Slingbox or Orb eventually could be embedded into operators' set-top
boxes.
One potential problem: Cable operators and the programmers that
maintain concerns over copyright violations often are inside the same
conglomerates.
Comcast Corp. and Time Warner Cable declined comment.
The telecommunications firms already have taken notice. Sprint has
partnered with Orb, which is sold with its broadband product as Sprint
Personal Media Link. Orb also has a deal with Sony Pictures Digital to
run trailers of its upcoming movies. Shelton sees this as a way for
the Hollywood establishment to dip its toe into uncharted waters and
"think through the economics and technology issues necessary to go to
the next step," he said.
If place-shifting catches on, it raises an additional question as to
how those viewers will be tracked. Nielsen Media Research already is
at work on a variety of technologies that would measure place-shifted
viewing but no timetable is on the horizon.
"They are on my dance card," said Scott Brown, Nielsen senior vp
strategic relations, marketing and technology. Brown said he envisions
Slingbox meeting the same gradual success that fueled digital video
recorders.
Reuters/Hollywood Reporter