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Why Slingbox Is Finally Getting the Aereo Treatment

Deployment on Dish raises a place-shifter's profile

A mantra is often used as proof that “old” media “gets it” when it comes to digital: Give consumers what they want, when they want it.

As evidenced by a wave of recent litigation, the missing part of this cliche is the “where” — as in the where they want it.

Broadcasters are awaiting word on their challenge to the legality of Aereo, the service that offers digital streams of broadcast signals to subscribers who have assigned to them individual, dime-sized antennas. No less than the future of the business is at stake, stations and networks argue. But it begs the question of why, until only recently, they never challenged another service that also offers digital streams of broadcast signals: Slingbox.

When Slingbox debuted in 2005, the legal response from the broadcasting business was nothing. When Aereo debuted last year, the reaction was a scramble to the courts.

There are technical differences between Aereo and Slingbox, for sure. But the reasons that one company went unchallenged and another did not has more to do with timing than anything else.

Since its debut, Slingbox has been viewed as a niche product. There was some discussion then that broadcasters would try some sort of litigation, on the claim that the streams of TV stations is a violation of the public performance provision of the Copyright Act.

Yet Slingbox never caught on as a sensation. It didn’t upend the broadcasting business in the same way that the DVR or VCR did.

And since Slingbox’s launch, broadcasters have become much more dependent on the dual revenue stream of advertising and retransmission fees. The proliferation of mobile devices has increased the demand for streaming content, and networks and stations are creating their own mobile services. One of them is Dyle TV, a venture of broadcasters including NBC and Fox that allows consumers to get channels in their market via small antennas attached to their mobile devices.

Broadcasters are developing more technically sophisticated mobile services; the problem is that they don’t want to be trumped by competitors offering their content. That’s one of the reasons why Slingbox’s challenge-free days have come to an end.

Broadcasters’ other big battle is over Dish Network’s offering of an AutoHop feature that delivers a plethora of primetime content to subscribers with the commercials automatically skipped. Dish upped the ante earlier this year by introducing several new offerings under the brand Hopper With Sling Whole-Home HD DVR, including a Hopper Transfers app that, among other things, gives subscribers broadcast streams on the go.

Dish’s new features happen to be powered by the technology of Slingbox, as it is owned by closely affiliated Echostar. Fox responded by amending its original complaint, arguing the new Hopper with Sling violates their retransmission agreement. The network also alleges copyright infringement, citing the recent court ruling that another streaming service, BarryDriller, violated the owner’s right of public performance.

A Slingbox spokesman said that their service is a “fair use” in that it is “place-shifting,” sending signals to devices “in a one-to-one stream, not one to many.” The rationale is that this “place shifting” is still a private use at the behest of the consumer, akin to the use of VCR to record programs that the Supreme Court upheld in 1984.

Fox disagrees, and its attorneys argued that “any purported right that Dish believes consumers have to ‘place shift’ live broadcast programming does not apply here because Dish is not a consumer. It is not ‘consumer place-shifting’ when Dish retransmits Fox’s signal over the Internet, in violation of its license agreement, to get more people to subscribe to Dish Network. It is piracy.”

Fox also touches on why it didn’t try to stop it earlier, noting that the fact it “did not race to court to stop a product that was not in widespread use, was not catching on, and was not being aggressively marketed does not mean that Fox must now sit helpless as Dish blankets the country with ads for its new and improved unauthorized Internet streaming service.”

So what happens if Fox and other broadcasters prevail?

Analyst Richard Greenfield of BTIG Research noted in a recent blog post that if Fox wins, “it would mean that Slingboxes are illegal for consumers to use, unless an agreement is reached with content holders (which we doubt would ever happen).” He also noted the irony that many media industry executives are faithful users of Sling: They use it to check their operations around the country.

There was some speculation that a federal appellate court may side with the networks in the Aereo decision, although reading the tea leaves of the judges is a risky business. If they do, broadcasters will get the legal decision they want, but there’ll still be plenty of pressure on them to make the “where” part of the mantra really work, a future of live TV on the go.

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