As Cablevision and Fox Battle, the Winner May Be Upstart Ivi TV

ivi TVIf there's an irony to the battle between Cablevision (CVC) and News Corp.'s (NWS) Fox, it's that the blackout of Fox stations affecting 3 million New York and Philadelphia-area viewers is benefiting an upstart service that the media giants would rather not have viewers discover: ivi TV.

Ivi (pronounced like 'ivy') streams live feeds of New York's major television stations, including Fox's WNYW-TV, which has been blocked to Cablevision's customers since Oct. 16. But with the World Series set to air tomorrow on Fox's stations, Cablevision subscribers are stampeding to ivi's service, according to the closely held company.

Since the blackout started, ivi TV's subscribers from the New York area have jumped by 320%, with 300% of those coming from homes with Cablevision connections, says ivi Chief Executive Todd Weaver. The company, based in Seattle, doesn't disclose subscriber numbers, although Weaver says his service's subscriber base is bigger than many small-sized cable operators. That's remarkably fast growth for a service that started in only September. "We're growing faster than any cable company has ever grown," Weaver says.

A Simple Approach

For consumers, ivi works in a remarkably simple way: after downloading an application that works on Macs, Windows and Linux computers and agreeing to pay $4.99 per month, viewers can watch broadcast TV from any computer with a broadband connection. Currently the service offers the New York-area broadcast stations, as well as those in Seattle. Next on line will be Los Angeles-area stations, followed by Chicago. Ivi is also in discussions with cable networks to add live streams beyond broadcast, Weaver says.

But what may be a boon to consumers is a curse for media companies, which sued ivi in federal court just 15 days after the service debuted. The broadcasters, which include Fox, are suing ivi and Weaver for allegedly pirating television signals for rebroadcast online. But Weaver says his service is legal and operates the same way a cable-operator does: it pays broadcasters through the compulsory licensing fees set up by Congress, which is what cable and satellite re-transmitters pay when they re-transmit a television broadcast.

Regardless of the outcome for the lawsuit, Cablevision subscribers in New York and Philadelphia are assured of being able to watch the World Series tomorrow, even if the blackout continues, as long as they can access ivi. The use of blackouts as a marketing driver was part of ivi's plan, Weaver says, adding that Cablevision's fight with Fox just after its debut was "an immediate benefit."

"The industry has seen a lot of [blackouts] over time," Weaver says. "As we have been getting everything ready and looking at the markets we were going to capture, we remembered the Oscar blackout, we realized as blackouts become longer and longer, it'll be a benefit to us. We hope more occur."

Blackouts Increasing

That's likely to happen. According to Bloomberg News, TV blackouts in the U.S. have reached their highest level in a decade and may grow in frequency. Why? Because pay-TV operators such as Cablevision are resisting paying higher fees sought by broadcasters and other content providers. In this year alone, according to Bloomberg, there have been five blackouts, affecting about 19 million pay-TV customers.

One aspect of ivi's surge in new customers that's not known is how many of the Cablevision subscribers are opting to cut their cable subscriptions, Weaver notes. "Some people are telling us they've cut the cord and canceled their cable," he notes, but others say they won't cancel their cable or satellite service until ivi has a specific cable channel that they want. That suggests, not for the first time, that consumers want a la carte pricing for television content.

As for the cable companies, Weaver says the end lesson may be that the fight between Cablevision and Fox illustrates how big media companies are "the dinosaurs of distribution."

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joel

i purchased ivi to watch the ws and jet football. i dont know how to download it. please get back to me @nynyjoel@aol.com.....joel

October 28 2010 at 9:31 PM Report abuse rate up rate down Reply
Purnell

JUST checked into a free trial of something called IVI - let's you watch TV on your computer. I want to watch the Series so I signed up. And , No, I don't have anything to do with IVI - I don't know how good it works or other downsides other than a small and somewhat inferior picture. I'm just glad the Yankees aren't in it this year.

October 27 2010 at 2:52 PM Report abuse rate up rate down Reply
1 reply to Purnell's comment
GrnBer

Yeah, who cares about the WS if the Yankees aren't in it. Really, we got the Jets, Giants, Rangers, Devils, Islanders, Knicks, Nets, Liberty, and tons of college teams to keep us focused.

October 27 2010 at 3:15 PM Report abuse rate up rate down Reply
amtrak2sb

The News Corp has hit a new watermark for the term "greed". They are asking for the world for stations that are actually free to receive the old fashioned way. They can take their greed and do you know what with it.

October 27 2010 at 2:30 PM Report abuse +1 rate up rate down Reply
billpro0

I guess Faux better get some more blondes!

October 27 2010 at 2:16 PM Report abuse +4 rate up rate down Reply
andrc657

FOX NEWS needs more money to fund all those republican candidates.

October 27 2010 at 1:48 PM Report abuse +3 rate up rate down Reply
1 reply to andrc657's comment
billpro0

Don't worry, the corporate and foreign money is still flowing in!

October 27 2010 at 2:14 PM Report abuse +4 rate up rate down Reply
kwmcguig

I do not want to pay for channels I do not watch. CVC should offer opt out and reduced rates for all channels.

October 27 2010 at 10:51 AM Report abuse +2 rate up rate down Reply
bob

it should be the other way around , the networks should be paying the cable companies to carry their signals , because of the increase in the number of people who can watch the tv channels .

October 27 2010 at 9:25 AM Report abuse +3 rate up rate down Reply
alticon

Don't you see what is happening here? One step at a time our freedoms are being squelched, on who we can watch, where our tax money is going,and who is let to die because their to old to benefit this country anymore! Wake up America! See the "political train" coming down the track...And it's not good! next Tuesday....vote for FREEDOM!

October 27 2010 at 7:26 AM Report abuse +3 rate up rate down Reply
2 replies to alticon's comment
Purnell

I don't know what side of the political spectrum you're on but you're forgetting it's only TV. As far as voting for freedom - these guys need regulation - not a license to steal.

October 27 2010 at 9:40 AM Report abuse +4 rate up rate down Reply
marsona

My goodness, what is it about a discussion of streaming television attracts the lunatics who talk to themselves?

October 28 2010 at 5:20 PM Report abuse rate up rate down Reply
nos2001

the networks should be paying the sat or cable company. they xmit their free in air signal to their customers. because of this, the networks have more viewers and get to charge more for their ads. the current policy is the opposite of the way that makes sense.

October 27 2010 at 6:27 AM Report abuse +3 rate up rate down Reply
jm2200a

Those 3 million are unfortunately doomed to listen to the "paid for" liberal media day and night. Expect people to be jumping out of those tall buildings any day.

October 27 2010 at 12:48 AM Report abuse +1 rate up rate down Reply
1 reply to jm2200a's comment
Purnell

The Liberal media is a myth propagated by right wingers that plays into the persecution complex that afflicts many of them. In actuality the media is a business - much like any other business - which caters to specific clienteles. Glad I was able to clear that up fore you JM2200a.

October 27 2010 at 9:43 AM Report abuse +1 rate up rate down Reply