Zattoo’s legal status is, arguably, a bit of a grey area. While the Internet TV service, which features live streaming of existing over-the-air and cable channels, claims it only does so within the law – either through government legislation or direct licensing agreements – its business model remains a controversial one. And it seems that Hollywood has finally taken notice.
Broadband TV news reports that Universal Studios and Warner Brothers are suing Zattoo for the way in which it streams German television channels ARD and ZDF. Under a 12 month license, Zattoo is able to carry both channels’ content live an “unabridged”. It’s the latter that the Hollywood studios are taking issue with since Zattoo inserts an advertisement everytime a user switches channel.
In a follow-up report, Zattoo co-founder and CEO Beat Knecht says he’s surprised that Universal and Warner have chosen to take action:
“We have been very careful playing by the rules,” said Beat Knecht, co-founder, CEO, and President of Zattoo, speaking to Broadband TV News, “Last December we blocked five Hitchcock movies from Universal at their request. We monitor very closely the broadcast schedules for any programme changes in order to comply with such requests.”
Furthermore, Zattoo claims that it doesn’t break any licensing agreements since the ads that it does show are post-roll, only visible when a users leaves a public broadcast channel, not when they first arrive or switch to another public broadcast offering. In other words, the company argues, ads or no ads, the live streams remain “unabridged”.
Also see: Interview: Zattoo co-founders