Monday, February 6, 2006 - The Progress & Freedom Foundation Blog

The SlingBox, Space-Shifting and the Future of Broadcasting

I've been wondering how long it would be before a major copyright spat developed over the SlingBox and its incredible "space-shifting" technology. For those of you who have never heard of it, the SlingBox is a set-top device that allows consumers to retransmit their home television content to themselves no matter where they are at in the United States.

In other words, any TV show, local news program, or regional sporting event that a viewer would be able to watch if they were sitting at home is now be available to them on-the-road, thousands of miles away from their TV sets. So long as the consumer has a computer and a broadband connection, the SlingBox can make "anywhere, anytime" TV on the PC a reality.

A few years ago, techno-pundits were dreaming of devices such as these, but today you can go down to your local BestBuy and purchase one for just $250. It's another sign of how media /TV /PC convergence is no longer just hype; its marketplace reality.

But as I mentioned at the start, the potential for a major copyright spat over this device has always existed because it is unclear whether consumers have the "right" to space-shift programming to other devices. Thus, it wasn't at all surprising to me when I saw the comments of Capitol Broadcasting President Jim Goodmon in today's Broadcasting and Cable magazine. Although he admits to owning and enjoying a SlingBox himself, Mr. Goodmon suggests that its space-shifting technology may constitute illegal behavior. "I can't believe that hasn't been stopped already," Goodman says.

Goodmon told B&C that the SlingBox likely violates program copyright laws and perhaps retransmission consent agreements as well. Retransmission consent involves the complicated agreements / contracts brokered between television networks and local broadcasters and then local broadcasters and cable or satellite systems. In Goodmon's opinion, the SlingBox potentially runs afoul of these retransmission agreements by enabling out-of-market viewing of network and syndicated content. "I have a deal with the cable system," he says, and they have retransmission consent for the cable system in this market. They don't have it for everyplace else. They can't do that; there's no way that's legal."

So, the challenge to the SlingBox (and technologies like it) is two-fold: copyright-related and contractual.

On the copyright front, I have no idea how a court challenge might unfold but I suspect that a strong fair use defense could be mounted by SlingBox and its supporters. Although this over-simplifies things greatly, I believe that SlingBox will argue that consumers already have the right to time-shift programming via various devices (thanks to the old Sony Betamax decision), and therefore, by extension, they should also have a corresponding "right" to space-shift their programming as well. Moreover, SlingBox will likely argue that consumers already engage in space-shifting when we make a VHS or DVD copy of television programming and then take it with us on a trip. (For example, I occasionally make copies of "Blue's Clues" and "Dora the Explorer" for my kids to watch in the car on a trip. Of course, that's probably illegal and I just don't know it!). Anyway, if I was a betting man (and I am!) I would wager good money that SlingBox could win on the copyright issues by employing this sort of defense.

But the retransmission consent issues here, which are really just copyright issues of another variety, are a little trickier. Local broadcast affiliates strike agreements with large TV networks (ABC, NBC, CBS, Fox, etc.) to carry much of their content locally. The local broadcasters demand the exclusive right to retransmit that content in their local communities in order to attract advertisers and maintain profitability. Then, in another set of negotiations, the broadcast affiliates cut deals with local cable companies allowing them to retransmit the broadcaster's signal to local communities. These retransmission deals are encumbered by federal rules including "must-carry" laws. In sum, this process is a complicated mess. Despite that, however, exclusive contractual rights are in play here that would be present even in the absence of a convoluted federal regulatory regime.

This is where a device like SlingBox comes along and upends everything. Just as the rise of cable systems in the 60s and 70s upended the traditional model of television signal delivery, the SlingBox will force some fundamental rethinking of the nature of video signal delivery in the future. If consumers can redirect the signals coming into their homes around to any other device they own, it completely shatters the notion of geographic exclusivity in broadcasting. And geographic exclusivity is vital the long-term viability of local broadcast affiliates.

In one sense, I think the SlingBox is a wonderful thing because it allows for consumers to enjoy the video programming they desire no matter where they are at any given time. On the other hand, I do appreciate the fact that that wonderful programming originates somewhere else and that several outfits spent large sums of money developing it and then pumping it into my house in the first place. We obviously want to make sure that the content keeps coming, but does that mean that we must remain wedded to the traditional model of signal deliver to ensure it happens? In a world in which content can now be downloaded into our video iPods and PlayStation Portables, and zapped to our cell phones or other mobile media devices, alternative distribution mechanisms exist and are not going away. Major content providers, including the national networks themselves, are increasingly tapping these new distribution channels and concocting new business models to deliver their programs.
So, it could be the case that the rise of the SlingBox and these other devices will strain the old TV network / local broadcast affiliate relationship beyond the breaking point. I've already heard rumblings of dissent in the local broadcast community about some of the deals that Disney, NBC Universal, and other networks have been cutting to deliver content via video iPods. With innovative new media distribution devices hitting the market every quarter, one wonders at what point the networks will just say "to hell with the local affiliates. We can get our stuff to consumers via these new devices as well as through direct deals with cable and satellite distributors."

I don't think that scenario is as far-fetched as it might seem to some. But, then again, broadcasters retain a great deal of relevancy (and political power) because of their LOCAL presence in every community. Who is going to deliver local news, weather, traffic and sports if the financial viability of local television broadcasters is undermined and they start going under? Many of my Net-savvy friends will say that the Internet and other sources can fill in the gap, and I agree with them to some extent (as I suggested in Chapter 2 of my Media Myths book.)

Nonetheless, local broadcasters do provide genuine local coverage and other programming services that will be very difficult to replicate in such a highly organized fashion. Sure, I can probably get everything I see on the local 10:00 news by searching a few dozen local websites each night at the same time, but there is something nice about having a sort of "one-stop-shopping" clearinghouse of such local news and information. And those less Net-savvy consumers would certain feel something of importance was lost if these stations disappear.

Will the SlingBox and all these other new multimedia devices really be the death of local broadcasting? I don't think so. But these devices and development will threaten the relevancy of the old local broadcast delivery model. Will that force a copyright challenge to the SlingBox in particular? I think it probably will, but I'm hoping that the effort fails. Local broadcasters are going to need to find a way to make peace with technologies like the SlingBox because we're only witnessing a trickle before a flood in terms of innovation in the video delivery business.

posted by Adam Thierer @ 11:51 AM | Mass Media