Online television service Locast says it will no longer interrupt live video streams with a request that a viewer donates, a perk originally reserved for streamers who agreed to make a monthly donation to the not-for-profit service.
The move comes after a federal judge in New York tossed out Locast’s affirmative defense and request for summary judgment in a copyright suit brought by the parent companies of four large broadcast networks.
On Tuesday, District Court Judge Louis Stanton said Locast’s decision to interrupt live video streams four times an hour until a viewer agrees to give the service at least $5 a month amounts to a charge instead of a charitable donation.
The judge said Locast received more than $4 million in donations last year from over 2 million customers who wanted interruption-free streaming, though the company only used a little over $2 million of those funds to cover their operational expenditures.
Locast, a registered not-for-profit, captures over-the-air television signals in around three dozen regions of the United States, then re-transmits them over the Internet. The service does not compensate network broadcasters or local TV station owners, pointing to an exception in the Copyright Act that allows not-for-profits to act as “secondary transmitters” of broadcast signals.
The parent companies of ABC, CBS, Fox and NBC sued Locast, arguing in part that the company’s decision to interrupt video streams until a customer donates is a tactic used by commercial enterprises like cable or satellite companies.
On Wednesday, a spokesperson for Locast said the company disagreed with the judge’s decision, but would continue operating as they explored their legal options. In the meantime, Locast says it will stop interrupting video streams for all viewers, even those who do not regularly donate.
“Although we disagree with this interpretation and are exploring our legal options to contest it, out of respect for the court’s order, Locast is suspending immediately all programming interruptions to request donations,” the spokesperson said. “This means that anyone located in a market we serve who signs up for Locast will get the service without interruption, regardless of whether or not they donate.”
Locast said it hopes customers who can afford to donate will do so.
