FilmON Forges Ahead Despite Aereo Ruling (for Now)

LOS ANGELES— With the Supreme Court ruling striking down Aereo's bid to continue operating its hybrid over-the-air/online service, other similar IPTV-based services might be a bit more nervous about their fate, but not the guys at FilmOn, a free Internet-based television service allowing online viewing of local TV worldwide.

In February, with the uncertainty of the Aereo case on the horizon, FilmOn launched a remote TV service called "Teleport Technology" that allows users to access remote desktops connected to FilmOn's remote antenna and DVR system without any additional hardware or software. The company describes the experience as similar to watching a screen on a distant computer, but with pristine TV quality. Teleport allows users to make a single non-public connection to a free public broadcast selected from hundreds of local free to air channels in Los Angeles, New York, San Francisco, Chicago, Seattle, Miami, Boston, Tampa, Denver, Atlanta, Dallas, Phoenix, and Washington DC.

Alki David, who founded FilmOn in 2006 Users access the FilmOn website on their computer or mobile devices and connect to these temporarily assigned desktops, which are connected to antenna farms, enabling users to access local TV channels for free. The website says the user is essentially renting the use of the computer for a private viewing of the programming and that the remote desktop technology suddenly levels the playing field of distribution for Independent broadcasters. (This sounds a lot like Aereo's argument before the courts.)

On the day (Wednesday, June 25) of the Supreme Court ruling against Aereo, Alki David, who founded FilmOn in 2006, sent out a memo to journalists stating his continued confidence in FilmOn's business model (they make money by selling ads and other services, while Aereo sold monthly subscriptions) and even (jokingly) offered Aereo investor Barry Diller and company president and CEO Chet Kinojia a job, should they need one.

FilmOn said it licenses more 600 additional channels plus 45,000 video-on-demand titles; allowing users to create their own live and VOD channels. Channel lineups vary in each country where it can be received. The company claims that 20 million Americans use the service every month.

Like Aereo, broadcasters are not happy that FilmOn allows their programming to be viewed for free. The company has been involved in several legal issues over programming carriage issues, including the retransmission of all of the major U.S. broadcast channels. This initially resulted FilmOn having to drop these channels in 2011. In 2012 the channels were all returned after appeals were lodged in Federal Court and FilmOn launched its FilmOn Air X antenna farm. The company even launched a Facebook app. Then, on September 5, 2013, Judge Rosemary Collyer of the United States District Court for the District of Columbia issued a nationwide injunction blocking FilmOn from offering its antenna/DVR service. Yet, FilmOn has gotten around that ruling by not allowing users to view local broadcast stations in the market they live in.

"FilmOn has fought the same battle Aereo lost in courts across the country," David wrote, adding that FilmOn is "alive and well" despite the Aereo ruling, because it effects only 3 percent of FilmOn's streaming TV business.

"This [ruling] is a huge blow to net neutrality and consumer rights [and] proves my mistrust of the courts is well founded and that the policies and agencies that are supposed to protect the public interest have failed," David wrote. "They are indeed mere tools of a handful of corporations intent on keeping the people in a stranglehold of bad cable service at extortionist fees. The effects on values the U.S. supposedly takes pride in, from innovation to free markets to freedom of speech itself, are truly scary.But the ruling against the use of remote antennas to serve consumers the free channels they have a right to will not effect FilmOn's overall business."

Showing his confidence in FilmOn's continued existence, David added that FilmOn has been acquiring content "at a tremendous rate."

"Aereo, in their own words, is dead," David concluded. "More roadkill on the long road we've been on. My condolences to Barry Diller and Chet Kinojia—you fought a good fight. Call me if you need work."

In January, according to Broadcasting &, a D.C. federal appeals court granted a request by broadcasters that it delay a decision on a D.C. Circuit Court's injunction against FilmOn until the Supreme Court ruled on the legality of the Aereo service. That case will now be reinstated.

As for the "ABC vs. Aereo" case, the Supreme Court ruled 6-3 in favor of the broadcasters. With the news, broadcast stocks were up sharply that same day. Afterward, in defeat, Aereo CEO and founder Kanojia said, "Consumer access to free-to-air broadcast television is an essential part of our country's fabric. Using an antenna to access free-to-air broadcast television is still meaningful for more than 60 million Americans across the United States. And when new technology enables consumers to use a smarter, easier to use antenna, consumers and the marketplace win. Free-to-air broadcast television should not be available only to those who can afford to pay for the cable or satellite bundle."

Echoed Diller (to CNBC): "We did try, but it's over now."

As long as it doesn't pay retransmission fees (although the company said it does license some content) the same might soon be said for FilmOn's on-demand IPTV effort as well. The guys at FilmOn should be nervous, very nervous.