Netflix is being sued by Big TV networks for streaming service locast into the ground. The complaint, filed in a California court, alleges that Netflix has been using its own servers to stream the shows and movies of its competitors without giving them a fair share of the viewership. The networks argue that this constitutes unfair competition and violates antitrust laws. Netflix has not yet commented on the suit.
What Happened With Locast?
Basically, Locast was a free streaming service that provided local channels over the internet to users in cities that had them. The networks didn’t approve of the company serving its channels without paying license and rights fees, so they jointly sued the nonprofit service shortly after it launched.
Locast sent out an email to its users explaining what happened. It said, “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.”
— Locast (@LocastOrg) September 2, 2021
The company was able to last from 2019 to 2021 because of a loophole that came from being a nonprofit. Where Aereo was broadcasting local channels as a for-profit business, Locast exploited the loophole to stay alive. Though the loophole clearly wasn’t enough, as the courts ruled in favor of the networks.
Locast described its service as one that streams “the signal over the Internet to select US cities. We are trying to help broadcasters reach people just like you over the internet.” It was available on almost every platform, including Google Play, the App Store, Roku, and so on.
Even though it was a nonprofit, the company asked for recurring $5 donations to keep the service running regularly throughout broadcasts, which the courts ruled exceeded “the actual and reasonable costs of maintaining and operating the service.”
As such, the company’s initial plan was to stop asking for donations, but it appears to have backtracked on that with the announcement that it’s ceasing operation effective immediately.
Aren’t Local Channels Free?
Local channels are broadcast over the air for free if you’re within antenna range of them. However, as shown by both Locast and Aereo, that doesn’t mean other companies can step in a broadcast those channels without paying rights fees to the networks. While a physical antenna may seem like antiquated technology, it’s still the best way to get local channels for free.
