Commentary by Steve Effros
He better be both nimble and quick, and you had better be also, or you’re going to miss the latest "great idea" for getting around the distribution contract restrictions imposed by video programmers.
Here we are again, using a children’s rhyme or fable in reaction to the latest gimmick on how to distribute all video programming on the web. A few weeks ago I led with "Thumbelina" to talk about Aereo’s "thumb sized" antennas, a technology which allegedly changes the entire relationship between program owners and distributors of broadcast television. Now we’ve got yet another idea, this one from NimbleTV, which says that all they have to do is claim to be an "agent" for a subscriber, and they can then get all the subscription programming from a cable or satellite deliverer, transcode it and stick it on the Internet for that subscriber to use wherever and whenever they want. The "whenever" part comes from a virtually unlimited remote DVR capacity that is thrown into the deal.
Whew, and for only an additional $20 bucks or so! The "gimmick" this time, unlike the Aereo claim that they don’t "retransmit" anything and therefore are not responsible for any fees for retransmission consent or copyright liability, is that the programmers and the cable/satellite guys are all getting paid. The "subscriber" pays the full freight and then an additional sum so that their cable box resides at some location in the cable system footprint (the first one, naturally, is in New York City) and NimbleTV becomes, in essence, a massive MDU, redistributing the signals worldwide via broadband.
The "subscriber" doesn’t have to live where the box is, says Nimble—indeed, they can’t! So they essentially claim subscribers could actually live anywhere. There are also suggestions that consumers could switch from one cable supplier to another, or to a satellite supplier almost instantaneously. Never mind that this implies NimbleTV is going to have its MDU transcoding offices in every major franchise jurisdiction, because, remember… cable operators have to have a franchise to supply that programming in any given location. Or maybe we will all just watch NY and LA.
There are so many legal questions surrounding this idea it’s hard to keep them all straight! What’s even more amazing is that at least one "market analyst" who has played with the system is so head over heels in love with the idea he has already stated he sees no significant legal problems! Wonder what he’s smoking… I want some, but not when I’m giving legal or financial advice!
Let’s just run through a few realities; while this is a very interesting idea for jump-starting "TV Everywhere" and setting a price for that separate service, you still need the cooperation of the program owners. You can’t "gimmick" your way around that. HBO, for instance, has long made it abundantly clear that folks in the Caribbean cannot create "phantom" addresses in Miami in order to get a DBS box and then watch the programming on their island. Why? DBS only has the US distribution rights to that programming, that’s why.
Cable operators cannot, according to lots of contracts, knowingly sell subscriptions to someone who is not a resident of the community they have the franchise to sell in. So if this new service is going to be at all legally viable, which I question, it will only be for those who actually live in the community and travel a lot! Good luck. This sounds to me like a lot more hot Aereo.