Locast has been forced to permanently shut down its free broadcast streaming service, reports The Verge. The company took broadcast TV signals — channels that are already free with an antenna — and streamed them over the internet so users could watch from anywhere, even if they don’t have a TV or antenna.
Other companies have tried and failed to take broadcast channels, like ABC and Fox, and make them accessible online. In the early 2010s, a company called Aereo took a novel approach of setting up literal warehouses full of TV antennas and renting them out to users for a monthly fee. This model was supposed to sidestep legal challenges because Aereo wasn’t selling the channels but rather it was selling access to an antenna. But courts ruled that was nothing more than a clever workaround, and Aereo was acting as a glorified cable television provider, but without compensating the broadcasters.
Failed on a technicality — Locast launched in 2018 as a successor to Aereo, hoping that the proposition of operating as a non-profit would make it legal, as it wouldn’t be profiting off its distribution of TV channels like ABC or Fox; non-profits are permitted to retransmit broadcast channels. Users could access channels for free through Locast, and the company maintained its services by frequently prompting them to make donations. The company’s stated mission was to make important news and other content accessible to Americans who can’t afford pay TV.
But a judge earlier this month ruled that Locast was taking in more money than it cost to maintain the service, a stipulation of the copyright exemption for non-profits. As a result of an injunction order to cease operations, Locast notified customers it was suspending operations.
“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,” the company told customers in an email.
That order to suspend operations has now become permanent, though Locast can appeal.
Business model — Some may wonder why broadcast channels would resist online distribution through companies like Locast. The channels are free with an antenna, after all. But most people watch these channels — ABC, CBS, Fox, and NBC — through a cable provider like Comcast, which by law must pay the broadcasters a huge sum of money in retransmission fees. Even digital services like YouTube TV pay broadcasters for the rights to transmit their channels. Broadcast television is still lucrative, despite increased cord-cutting.
Antennas remain the only real way to watch broadcast channels for free. Channels like ABC continue to broadcast their stations over public airways for people who still use antennas. But with the advent of slick cable TV services, laws were passed that gave broadcasters the right to charge Comcast and others for their content. That’s why you can’t watch NBC online for free. Instead you have to pay for NBC’s Peacock service.