New Webcaster Menace Stalks Net - Industry Trend or Event

Get ready for a new slogan in the 21st century: "I want my MTV for free!" Thanks to the Internet and loosening laws concerning the transmission and reception of Internet signals in other countries such as Canada, analysts and experts are saying that sites like iCraveTV, com will become more prevalent in the coming years.

This turn of events leaves analysts and industry players struggling to determine how Internet rebroadcasters will impact the concept of copyright, as well as the value of cable franchises and local broadcast signals.

"This will be the first in a series of similar type initiatives," said Yankee Group analyst Mark Quigley, referring to Web sites that rebroadcast television and satellite feeds over the Internet. But while iCraveTV was slapped with an injunction by a federal judge last week, which forced it to shut down temporarily, analysts say that the sheer number of people who will be able to figure out ways to do this type of thing promise to ruffle for years to come, the feathers of huge U.S. media companies like Time Warner Inc. and AT&T Corp.

"There will probably be fairly active underground types of systems," Quigley said. "If you spend the time looking for things, you'll find them."

This sticky situation arises from the fact that what iCraveTV founder William R. Craig was doing, at least within Canadian borders, was perfectly legal.

In fact, the Canadian Radio-television and Telecommunications Commission decided last May that they weren't going to regulate new media on the Internet. Last December, the CRTC clarified new media as broadcasting delivered and accessed over the Internet, according to Quigley, which opened the doors for iCraveTV to launch its operation.

iCraveTV's methods of retransmitting U.S. television stations on its site ended up landing the company in court because of a lax security system that theoretically could have allowed the site to be accessed on a global basis. Last week, a federal judge in Pittsburgh, Pa., granted a preliminary injunction barring iCraveTV from transmitting U.S. copyrighted films and TV shows.

The sheer number of plaintiffs in that case underscores the threat that U.S.-based content providers are feeling from the new technology that they hope to control for their own profit.

The swiftness of the suit was typically of Old World media companies who are increasingly using the courts to protect their copyrights in the face of technology that enables ever higher levels of access to their content.

"The more important issue is not the regulatory view," Quigley said. "But more that the reaction of the broadcasters in the States didn't like the fact that they weren't getting the royalty streams they deserved."

Craig was not speaking to the press last week, but issued a statement that read: "We are continuing to proceed on a dual track. We have been engaged in negotiations with the U.S. and Canadian rights holders, which we expect to continue. At the same time, we are working hard on enhancing our online security mechanism, which the U.S. District Court has expressed a willingness to re-evaluate in 90 days."

But even though the technology exists that would allow for viewers to bypass cable operators and watch The Sopranos over the Internet, for instance, analysts like Robert Routh of Ladenburg Thalman say that because of the U.S. base of most media powerhouses, we shouldn't expect to see operations like iCraveTV crop up overseas.

"There's no international exposure (to cable companies)," Routh said. "The bulk of their business comes from here and stays here. That type of problem could never happen here."

Still others questioned whether operations based in Caribbean nations might be able to further complicate the matter. At the moment, most were saying that such businesses would be dealt with as they cropped up.

Ironically, Quigley said that even with a high-bandwidth ISDN line, the images seen on iCraveTV's site were sketchy at best. "But still, you were able to have a TV show running on your computer," he said.

Plaintiffs Against iCraveTV.com

Sports Leagues                    Studios

National Football League          Twentieth Century Fox Film Corp.
National Basketball Association   Disney Enterprises Inc.
NBA Properties                    Columbia TriStar Television Inc.
                                  Columbia Pictures Television
                                    Inc.
                                  Metro-Goldwyn Mayer Inc.
                                  Orion Pictures Group
                                  Paramount Pictures Corp.
                                  Universal City Studios Inc.
                                  Time Warner Entertainment Co.
                                    L.P. (Warner Bros.)

Sports Leagues                     Broadcasters

National Football League           ABC Inc.
National Basketball Association    CBS Broadcasting Inc.
NBA Properties                     Fox Broadcasting Co.

SOURCE: Cable World research

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