Earlier in the week NewTeeVee published a short post referencing a story being carried in a Spanish newspaper, which suggested that a number of local broadcasters were considering taking legal action against the Internet TV startup, Zattoo.
Zattoo, is a peer-to-peer application that provides live streaming of traditional TV channels (see our review). The service is ad-supported, where an advertisement is displayed for 5 seconds every time a user switches channel, and this appears to be the potential cause of dispute, with some of Spain’s television stations unhappy that Zattoo is profiting from their content.
Although Zattoo has license agreements with the majority of stations it carries, according to a comment left on the original NewTeeVee post, Spain is unique because government legislation rules that cable carriers (which also seems to include Internet TV services) have the right to supply subscribers with access to conventional television channels and that the networks are obliged to cooperate. Compensation needs to be agreed between the two parties, but in the case that they can’t reach an agreement, the government can step in and set the rate.
In response to this story, Zatto emailed me the following statement:
Zattoo partners with broadcasters to clear all rights to distribute the TV channels, in accordance with local copyright and broadcasting laws. Whenever necessary, Zattoo obtains all government licenses required to operate its service. In Spain, Zattoo was granted a government license authorizing its service and the distribution of the channels in its lineup. Any retransmission we do in Spain is either based on an explicit authorization by the broadcaster and/or the rights and obligations included in the license.
So far no legal action has been taken against Zattoo in Spain or anywhere else. If there is a problem we discuss and resolve it directly with the broadcaster in question.
When I first reviewed Zattoo, I asked about their business model and their relationship with broadcasters, and was told that since Zattoo’s own advertising only appears in-between channels and not in the stream themselves, it was fair game.
My take: since Zattoo streams traditional TV offerings live and as-is, then any advertising transmitted by the broadcasters themselves remains in-tact, so they aren’t necessarily losing out on revenue. Additionally, services like Zattoo are helping those channels reach a larger audience who are spending time online and not in front of their TV, so it’s in the broadcasters’ long term interests to work with them not against them.
Also see: Q&A with Zattoo’s co-founders