FilmOn’s Broadcast Streams Taken Down; Is Ivi Next?

In the grand scheme of things, creating a business that takes free, over-the-air TV signals and broadcasts them over the Internet and on mobile devices doesn’t seem like a bad idea — if you can get away with doing it for free. Unfortunately, for companies like FilmOn and Ivi.TV, that business model is being tested in the courts.

Internet TV streamer FilmOn was dealt a big blow yesterday when it was issued a temporary restraining order by a federal judge in New York, demanding that it cease retransmission of broadcast TV signals online. The restraining order comes after ABC, (s DIS) CBS, (s CBS) Fox (s NWS) and NBC (s GE) took FilmOn to court for rebroadcasting their TV feeds without monetary compensation for doing so.

In a statement issued this morning, FilmOn CEO Alki David said the startup has taken down streams of the major broadcasters in compliance with the court’s order, although he said it has secured deals with several independent channels and will stay open for business. David also said he expects the major broadcasters back in the FilmOn lineup “in the near future.” From the press release:

“We respect the Court’s decision in this matter and have temporarily ceased retransmission of free network television on FilmOn. In the few weeks FilmOn provided free access to basic television on consumers’ mobile devices, it received more than 30 million individual users. We also garnered dozens of positive reviews about our free service’s quality and ease of use. We have, in essence, shown full proof of concept of the FilmOn delivery system–proving that millions of viewers will watch our superior television service online, all with commercials, adding millions of extra impressions that enhance network’s value to its viewers and advertisers.”

FilmOn is one of two Internet TV companies that are seeking to take free, over-the-air broadcast signals and stream them online. Both FilmOn and Ivi.TV claim to operate under a legal loophole that allows them to legally retransmit over-the-air content as long as they pay semi-annual fees to the U.S. Copyright Office. Understandably enough, the broadcasters disagree with these companies’ reading of the law and are trying to shut them down.

Ivi is also battling the big broadcasters in the courts. But while FilmOn was taken to court in the Southern District of New York, where the broadcasters filed their case, Ivi issued a preemptive lawsuit against its foes in its home district in Seattle. The broadcasters, which filed their lawsuit against Ivi in the same court as FilmOn, are trying to get that case moved to New York, which is a more favorable district.

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