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Thursday, March 23, 2017

The SCOOP by Seymour Flix

FilmOn Gets Hammered By 9th Circuit Court

The 9th Circuit Court of Appeals unanimously rejected FilmOn's concept of streaming broadcast TV and movies over the internet free from paying for the content but charging a user subscription fee.

FilmOn argued that it should be allowed to stream broadcasted content free or for a nominal fee under an exception to the Copyright Act of 1976 - the 9th Court didn't buy it.

The three judge panel ruled that Congress did not envision that the exception to the statute would apply to internet-based distribution and reinstated a copyright claim against FilmOn overturning a lower court ruling.

The plaintiffs in the case: Fox, NBC, CBS, and Disney were very relieved.  The Court had deferred to the U.S. Copyright Office, which has consistently found that "internet-based services do not qualify as cable systems under the law".  Therefore, FilmOn can not distribute TV or movie content without permission from and full payment to the content owners.

FilmOn currently streams licensed content which it will not be able to do going forward.  This essentially puts FilmOn out of business. To counter, FilmOn issued a statement saying it would continue two similar cases one currently before the D.C. Court of Appeals and another before the 7th Circuit Court of Appeals. If losing in these cases, it intends to appeal to the Supreme Court.

CMG believes this is a losing battle for FilmOn as their actions essentially boarder on content piracy. It will lose in both the D.C. and 7th Circuit and if they do go to the Supreme Count the case will not be heard and the three Appeals Court rulings will stand.

Netflix's Quest for Day-and-Date Distribution with Theaters
Netflix CEO Reed Hastings


According to Reed Hastings, CEO of Netflix, "movie theaters haven't innovated beyond popcorn in the last 30 years." In an interview at the company headquarters in Gatos, CA. this past Tuesday, Hastings didn't mince words regarding the "cinema's need for a new distribution model that could do for movies what cable networks and online services have done for TV shows. Netflix wants to unleash films. It's about growing the movie business."

He pushed back on the idea that Netflix's goal is to bypass the theaters' exclusive release window for new movies and stated Netflix has struck a deal with iPic Entertainment, the small, exclusive dinner theater chain that will screen Netflix produced films day-and-date with their online release.

This does two things for Netflix: first, they enjoy their day-and-date movie release and second, those films can now qualify for Academy and other awards' consideration.  So, their tie-in with iPic is a win-win for Netflix.  iPic, for their part, is pissed-off at the major studios and large cinema circuits because they say they are shut-out of screening the openings of first-run movies, particularly block-busters, because of collusion between the studios and large chains (CMG has previously reported on this non-compete practice and it is true).

CMG believes, and has stated for years, that eventually all content will be available on a day-and-date release basis. Netflix's deal with iPic is just the beginning.0


Best,
Seymour Flix

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