Submission
Subcommittee on Courts and Intellectual Property The Committee on the Judiciary
Subject: Copyrighted Broadcast Programming on the Internet
June 15, 2000
Ian P. Mccallum
iCraveTV
2 Bloor St. W., Suite 400,
Toronto, Ontario, L4C 3P6
Canada
Tel 1 (416) 928-9199 ext 222
Table of Contents
This submission is made, solely in response to a request to appear in order to share iCraveTV's experience with the committee and, thereby, to inform discussion.
The base business, the core programming and the market for iCraveTV are television; the technology is the Personal Computer (PC) and selected parts of the IP communications infrastructure servicing it. Growth will come from the products and services developed from the technological and creative resources of both. iCraveTV licenses its content from program owners.
The re-launched iCraveTV will have the proven programming content of cable television and DTH satellite combined with the reach and power of the Internet. As well as being "cable on the Internet", iCraveTV also will add the new media upside by selectively adding content that has been developed for the Internet using its functionality.
iCraveTV will generate revenues from local, regional, national and global markets. With investment from operating companies, passive investors and the public capital markets iCraveTV will be able to adapt quickly to an evolving multi-billion market. iCraveTV will offer the best available delivery of proven video content - commercial television programs. In 2000, programming expenditures for cable systems will exceed $10 billion (US) for the US and Canada. iCraveTV will also add new entertainment and e-commerce content developed specifically for the interactive potential of the Internet. It will work extensively through partnerships and by buying relationships with companies important to the development of the iCraveTV portal.
iCraveTV developed the concept of "companion television" is designed to be part of the on-line computer experience. It converges continuous live and archival television onto the computer screen. Sitting 18 inches from the screen most people watch iCraveTV in the "small window format" (3"x5") of the three screen size options (including full screen) that we provide. We are offering "best available image quality" will grow to better quality and increased screen size as thru put of the on-line world improves. iCraveTV has created a new "extension market" for the release of television programming by taking television programming to places where it has not existed before -- to computer screens in the office, in student residences, in bedrooms of youths, in in-home offices -- anywhere there is an on-line computer. This is much of our existing market.
TVRadioNow, Corp, a privately held company, operating under the trade name iCraveTV.com, is in discussion with investment banks and venture capitalists in the major technology financing centers of North American putting in place partners to work with the management and existing owners to help the company to relaunch and grow rapidly. The company is acquiring video content and partners to grow it from the dominant TV aggregator retransmitter, to a broader video aggregator, and on to become either the dominant video based portal or a major media rich portal.
iCraveTV has developed a proprietary technique that will effectively isolates any Country or
area. That is to say, it can exhibit programming country-by-country. It is a technique that is
patent pending and has been trade marked "iWall." In effect "iWall" will create Country Area
Networks (CAN) rights. CAN is a right that is an extension of the live television non-broadcast
rights that has evolved over the last couple of decades - cable television distribution rights
initially expanded to MATV (master antennae) then to SMATV (satellite master antennae), to C-Band satellite reception to MMDS (multipoint microwave distribution) to DBS (direct broadcast
satellite), to ISPs (Internet Service Providers). ISP All are extensions of the original cable
distribution rights enjoyed by services such as ESPN, CNN, MTV, Much Music, and YTV.
Today they all extend their rights into these extension markets - CAN would be the latest
extension right over this expansion of rights. iCraveTV is negotiating for this CAN rights with
the specialty and closed circuit video channels and with the satellite channels around the world
and the owners of program inventory. Just like the previous rights extensions, CAN will require
explanation but should prevail because the rights holders increase the depth of their markets and
increase their revenues through iCraveTV without depleting their other markets. iWall unlocks
additional value from existing assets. Those that do not take advantage of this technique are like
those swimming holding two gold bricks.
As a result, our ability to protect the rights holder will free up a tremendous amount of programming content for on line computer users - all with video screens that today can not access the tens of billions dollars in programming content available to the NTSC market segment.
This makes available to iCraveTV, for web cast on a country-by-country basis, television content that cannot be licensed for exhibition on the World Wide Web because the rights are unavailable. This is freeing up valuable video programs. To this end we are negotiating with specialty channels and owners or distributors of inventory - with a range of responses. Like cable television, iCraveTV is creating nation wide tiers of specialty channels for on-line computer users in Canada, the United States and other countries. Like our ownership, our content and our business will be multi-national, but predominantly American.
In addition to our English language entertainment and business information channels and tiers, we are in discussions with potential partners from around the world to introduce channels in many different languages and cultures. Advertising supported and subscription based tiers are all part of our mix. We are even discussing private label networks that are interest group based. After all, the Internet is a community of communities.
As an aggregator of content, we have the ability to motivate consumers around the world to move iCraveTV and its video streams to their first choice at time of log-on to the Internet. We can reinforce this choice by providing additional non-video content to our web site in addition to our artificial intelligence (AI) based RobotQ search engine (e.g., valued consumer data such as local weather and news; business and general news highlights; e-commerce opportunities; free e-mail and chat facilities; and channel and program listings guide). Our RobotQ partners also have the ability to provide an AI based website design that learns individual consumer patterns and shapes the website accordingly. While we have identified and addressed some of these needs and opportunities, we are mindful that we will most rapidly perceive our potential and leverage our marketplace position by employing selective partnership and joint venture relationships to create or participate in a market dominant portal.
The Internet market will continue to evolve for some years to come. Like television before it, the millions of web sites that now populate the Internet will evolve into a few preferred portals each with their own character that will appeal to consumer subsets who will return to that preferred site out of habit - visiting other sites to meet specific needs, taken there by search engines. Program suppliers will lease their services to multiple web sites. In many respects, the consumer clicks environment will resemble the existing broadcast environments.
iCraveTV has one of the fastest and broadest established brands on the Internet. In its previous incarnation, approved by the Canadian regulatory and copyright authorities, iCraveTV was the first to market with full television on the Internet. It retransmitted to the Canadian market the 17 US and Canadian television stations available off air in Toronto Canada. In its second hour of operation iCraveTV was receiving 350,000 hits an hour. Its first month saw 80 million impressions and 800,000 visitors. Its first three month's press clippings are over 9" thick with two front page articles in US Today, major articles in the New York Times, the Wall Street Journal, the Financial Times of London, Newsweek Magazine, Wired Magazine. There was extensive coverage on the Internet electronic "zines" such as Wired and CNET was well as coverage on CNN and PBS. While it received extensive press coverage within its Canadian market, befitting its first to market status it also received extensive coverage world wide.
iCraveTV went from idea to operations 6 months later, November 30, 1999.
iCraveTV was launched to provide TV retransmission to Canadian viewers, to pay royalties to copyright holders, including Buffalo, New York broadcasters and international program producers, with payments to be made according to tariffs to be established by the Canadian Copyright Board and to generate revenues based on banner advertising. Except for the latter point, it was similar to Canadian cable companies. By this means the Canadian government had established a technology independent means to cut through the Gordian Knot of conflicting, dispersed or ill defined rights and thereby to provide what no contracts could provide - the flow of revenue from the viewers/advertisers, through iCraveTV to broadcasters and program producers.
For decades programmers have released conventional television and movies on a sequential release basis to allow rights holders to maximize and control their rights in higher paying market segments before extending into the next area. These segments are either defined by geography or competing level of service.
Initially iCraveTV was established using best available techniques to contain the service within Canada. However, US rights holders were very concerned that these techniques were inadequate to stop their programming from entering the US. iCraveTV agreed to stop retransmission of any television until it could meet certain conditions set out in the agreement. It has no plans to re-enter the retransmission market.
For additional historical information, I refer you to iCraveTV's submission to the House of Representatives Commerce Committee Sub-committee on Telecommunications, the Internet and Consumer Protection. Subject: iCraveTV and other Recent Developments in Web Casting, February 16, 2000.