Broadcasters Round On TV Streaming Site FilmOn

UK broadcasters have joined U.S. counterparts in declaring new TV streaming site FilmOn illegal.

The mysterious site – which was developed in London, Odessa and Geneva in September and founded by billionaire former shipping magnate Alki David – re-streams UK public-service channels and others including CNN International, Sky News and adult channels.

It has also attracted a lawsuit in the U.S. – where it carries ABC (NYSE: DIS), NBC (NYSE: GE), CBS (NYSE: CBS) and Fox – from CBS, NBC, Universal, KNBC-TV, Twentieth Century Fox, Fox, ABC and Disney.

In a joint statement, the UK’s commercial public service channels ITV (LSE: ITV), Channel 4 and Five told paidContent:UK: “FilmOn is not an authorised service and we reserve the right to pursue any site or service we believe to be infringing our copyright or using our content in an unlicensed, illegal capacity.”

FilmOn has not responded to our questions, including whether it has direct broadcaster agreements. David has previously told journalists: “Without a doubt, the (UK) Copyright Act upholds what we are doing. There is no difference between the internet and satellite … People need to stop being afraid of opening up doors to digital technology.”

This is apparently the same reasoning given by two comparable European services, Zattoo and TVCatchUp, which have previously or still do re-stream TV channels. They have claimed legality under Sections 73 and 73A of the UK’s Copyright Act, which allow cable platforms to re-transmit public service channels in the public interest.

Broadcasters disagree. Whilst they successfully persuaded Switzerland-based Zattoo to stop retransmissions, effectively shutting it down in the UK, TVCatchUp continues re-streaming. ITV, C4 and Five filed jointly against TVCatchUp in London’s High Court in March and now tell paidContent:UK: “Litigation is continuing with a trial date fixed for next year.”

The supposed loophole in the act, which was written in 1998, could be shaky. The act states…

“The re-transmission by cable shall be treated as licensed by the owner of the copyright in the work, subject only to the payment to him by the person making the broadcast of such reasonable royalty or other payment in respect of the re-transmission by cable of the broadcast as may be agreed or determined in default of agreement by the Copyright Tribunal.”

In other words, cable operators can retransmit TV stations, but only if they pay an agreed license fee to channels, or only if the broadcasters take such operators to the Copyright Tribunal to win fees. Interestingly, they have eschewed the Copyright Tribunal route and taken the complaint straight to court. TVCatchUp has upped the ante in the last few weeks by inserting its own pre-roll video ads before viewers can watch the broadcast channels.

FilmOn is curious indeed – just one of myriad businesses run by its exuberant founder, a webcam performer and some-time TV actor (check his Wikipedia profile). Its exact nature is unclear, but it appears a proof site for a HD video management and distribution service run by holding company 111Pix.

FilmOn says it floated in Frankfurt in 2008 at a massive £587 million valuation, but delisted in 2009 after taking £43 million in funding from Global Emerging Markets investment group. It all sounds a bit too good to be true.