He also questioned why they didn’t seek a temporary restraining order to halt the two-year-old company’s operations, as they did in the case of Aereo, a similar case that arose years earlier. “I think the reason they didn’t seek that TRO,” Goodfriend said, “is that they realized full well that they had waited too long and would have lost. It’s hard to show irreparable harm when you’ve done nothing for a year and a half.”
The executive delivered the comments Wednesday at the TV of Tomorrow Show in New York, a one-day industry conference.
Locast began operating in January 2018. Absent a TRO, the company has been able to launch its service in Atlanta, Phoenix and Seattle, Goodfriend said. It now operates in a dozen markets, including the top 10 DMAs, reaching about 35% of the total U.S. marketplace.
Locast has been locked in a legal dispute with the Big Four U.S. broadcast networks, which filed suit last July, describing the company as an illegal vehicle for hijacking their signals. As a streaming service sustained by donations (“not subscribe — donate,” Goodfriend gently corrected the session’s moderator), Locast views itself as a public service. Its stated goal is to make broadcast networks more accessible to viewers, consistent with the initial covenant of antennas pulling down signals out of the air.
Broadcasters view the company’s streaming app as a work-around similar to Aereo’s, one that is aimed at illegally circumventing the pay-TV bundle. At stake are billions of dollars in annual revenue paid to broadcast network owners by distributors carrying their signals — an increasingly vital source of cash as viewership ebbs and advertising dollars are at risk. Further complicating the picture, legacy companies are also ramping up their efforts in the streaming arena, which makes them less sympathetic to an upstart, whether or not it is a for-profit entity.
In its counter-suit, filed in September, Locast said it was operating well within legal bounds and has hewed closely to the letter of copyright law. It called the broadcasters’ legal action “classic copyright abuse.” Goodfriend’s remarks Wednesday amplified that position.
Goodfriend said the company used a 1976 copyright law as a “recipe book. We followed that law so carefully and closely. So the question for any judge is, ‘Does the law mean what it says? Or does it mean something that none of us can figure out?'”
Several times during the 20-minute session, he expressed sentiments that wouldn’t be out of place at the NAB Show or a broadcast affiliate meeting. “I want to be clear: I love broadcast TV,” he said. “I would love to be working hand in glove with the industry” to respond to the forces eroding traditional linear viewing.
Instead of innovating around cord-cutting, he argued, major broadcasters and their business partners are like “two old guys punching each other in the face in a rowboat that’s about to go over a waterfall.”
Speaking with Deadline after his keynote appearance, Goodfriend said no hearings are currently scheduled in the lawsuits, which were filed in federal court in New York.
Goodfriend dismissed the accusation by the broadcast networks and others that Locast is being manipulated by interests like satellite operators. AT&T’s DirecTV, for example, donated to the company and has included it in messages to customers as a resource when carriage disputes arise. (The broadcasters say the distributors are funding a work-around that costs them carriage revenue.) “The money we get from individual contributors far outweighs what we’ve gotten from AT&T,” he said. When Dish Network told its customers to use Locast, they got feedback from customers saying, in Goodfriend’s recounting, “Thanks for sending us to Locast — now we don’t need Dish.”
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