SBJ/June 19 - 25, 2006/This Weeks News

MLBAM seeks licensing fees over Slingbox

Sling Media’s device allows viewers to watch their
local stations no matter where they go.
MLB Advanced Media is pressing Sling Media Inc., maker of the popular Slingbox device, to pay licensing fees for the distribution of televised baseball games, heightening an already tense relationship between Sling and major content owners.

Baseball’s position is at odds with Sling’s business model, one in which consumers pay $200 at retail for a device that geographically relocates their TV signals with no additional fee. More broadly, the sides are opposed on how the Slingbox interacts with baseball’s legal rights. MLB asserts the device is a violation of cable and satellite user agreements, pacts that baseball interprets for its content as tied to specific geographic regions, something Sling fervently denies.

“This is about protecting our broadcast partners and our intellectual property rights,” said George Kliavkoff, MLBAM executive vice president, business. “We’re asking them to respect the rights they’re helping distribute, and an avenue to do that would be a scenario where users would pay a little extra for getting that content. This is helpful technology, but we’re looking to find a solution where that technology is used in a legal way and respects our rights.”

Sling executives said MLBAM has not yet indicated a specific figure they want for licensing fees, but the company is not open to the concept of paying.

“Maybe they should be paying us,” said Blake Krikorian, Sling Media chief executive. “Seriously. I’m still failing to see how we’re hurting them or their brand. We’re allowing more people to see more baseball, with all the same commercials, and stay connected to their teams. How is that bad? It’s additive to what they’re doing. We don’t need to be charging people a monthly fee. They’ve paid for our device and they’ve paid their cable bill.”

MLBAM believes there is plenty of precedent for consumers paying multiple times for similar content.

“I can buy a CD in the store, but the same songs from the album are being played on satellite radio and are available on iTunes, and they’re each being compensated,” said Kliavkoff, who has purchased a Slingbox in an attempt to better understand its uses and implications. He is one of the more than 100,000 Slingbox owners. “Customers will pay for the convenience of accessing the material in each of those settings.”

The two sides have had active discussions on settling the dispute, one that hit a flashpoint earlier this month, with a tense exchange during a panel discussion at the Digital Media Summit in Los Angeles. MLB is by far the most outspoken sports property with regard to the Slingbox, with the other leagues remaining generally cautious about the device or unsure as to its full ramifications.

Other content owners, such as HBO, have similarly branded Sling as violators of their copyrights.

The Slingbox debate also highlights baseball’s disparate provisions for out-of-market access to games. Fans can buy the Extra Innings TV package through DirecTV, Dish Network or In Demand on cable, providing access to about 60 games a week. MLBAM also sells MLB.TV subscriptions in which every game is accessible over a computer, including a new product called Mosaic that allows viewing of six games simultaneously. There is no formal linkage or combined selling of online and TV offerings, though.

The NBA, conversely, offers online viewing of out-of-market games as part of its League Pass TV package.

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