Locast Nation
As a non-profit, Locast was designed from the very beginning to operate in accordance with the strict letter of the law, but in response to the court’s recent rulings, with which we respectfully disagree, we are hereby suspending operations, effective immediately.
Thank you.
That’s the email I just got. I was in the middle of writing a story about how Locast was removing their advertising from their streams, and it just showed up in my inbox. Like all of you, I’m dealing with this in real time.
Locast’s app has a similar message as well.
What the…
I have to say I’m surprised by this move. I expected Locast to immediately file some sort of appeal and ask the court to be allowed to continue operating while that appeal was in process. Maybe they did this quietly and it didn’t work out. Maybe they were quietly presented with some sort of threat from the major networks. The truth is, I don’t know.
The future of streaming over-the-air
Well, right now it’s all (pardon the pun) up in the air. I have been a big advocate of over-the-air streaming solutions. In years past, there have been a number of ways you could attach your own antenna to a streaming device. Most of them didn’t last in the marketplace. That was partially due to companies like Locast that did the hard work for you. But now it’s hard to know where it’s all going.
In my article yesterday, I said that I think there’s a benefit to having this sort of thing. When a local content provider makes a contract with a pay-TV company, here’s what really happens. The pay-TV company gives the station money, and in exchange they get the right to replace the commercials on that station. This is how it’s been for a couple of decades. As the market for true over-the-air television has waned, that money from the pay-TV companies has become more important than the advertising dollars.
Local stations have been trying to come up with plans to turn that around. One of those plans, so-called “NextGen TV” or ATSC 3.0, hopes to entice people to antenna TV by offering extra services through the internet. That’s great, but it does depend on people being at home to receive the signal.
I have said before that it makes sense for all the stations in a market to join together and create one app to stream local content, with its original commercials. That’s what Locast was doing. And, I think there’s value there. I think local stations probably agree. And for now, that’s gone.
It’s all still developing
I think we’ll see more about this in the coming weeks and months. I’m sad to say that Locast might not be coming back. In a case like this there’s often some sort of sale and some new party coming in for a short term to try to get the magic back. It usually doesn’t work. But, if it opens up the possibility of a new service that’s supported by the major networks, that’s a win for everyone.
Referring to your statement “I have said before that it makes sense for all the stations in a market to join together and create one app to stream local content, with its original commercials. That’s what Locast was doing. And, I think there’s value there. I think local stations probably agree. And for now, that’s gone.”
IMHO I believe it comes down to three things:
1. Control – The content provider wants full control of their product. Easy enough to understand. They could join together and offer this type of service but it comes down to money. Is it worth it?
2. Revenue – Breaks down to four points
A. Due to the current way ratings are performed, local broadcasters likely weren’t getting proper credit for eyeballs on their content. Fewer verifiable viewers means lower official ratings which translates to lower rates they can charge for commercials.
B. They can’t “upsell” you from the OTA/Free option to the more lucrative “pay us additional money for all the content we don’t air”.
C. If you can stream any market (which Locast was careful to prevent), why would you watch your local network when you can watch the content from somewhere else? Relates back to 2A.
D. If you can get the content from Locast or some other source (even if the local broadcasters came up with their own app), the cable companies won’t want to pay the same rates to the broadcaster when retransmission contracts come up for renewal.
I think Aereo had the right idea but wrong implementation. If I had enough money or investors, I’d basically “rent” a Slingbox to a customer. The box would in a specific market. It would be your box as long as you paid. If you wanted multiple markets you would have to rent boxes in multiple markets. Renting doesn’t pass muster with the law? How about ownership of the box and you pay for the bandwidth/hosting/maintenance of the box. Placeshifting was legal as long as you owned the equipment. Aereo claimed they had lots of micro-antennas and that’s how they tried to skirt the law. It’s the tuner that’s the key.