TVU chief grapples with copyright questions

Paul Shen, the CEO of controversial TVU Networks, said he doesn't understand why anyone in television would consider his company a threat. In fact, he said he comes to the TV industry bearing gifts.

Shen is the creator of the TVUPlayer, which enables people to stream live TV broadcasts to one another via the Internet. The blogging community in recent months has showered praise on the technology for aggregating TV channels such as ESPN, the Disney Channel, Fox and NBC in one place, and for creating a Web TV experience that more closely resembles traditional viewing.

But almost everyone who writes about TVU Networks' growing popularity has plenty of questions about the start-up. Who is behind the nifty technology? How does the company make money? Is the service legal?

In an interview with CNET News.com, Shen said the TVUPlayer is nothing more than a way to demonstrate his technology, which he claims can help broadcasters mine a rich new distribution platform and advertise to new customers. He acknowledged that much of the content on the TVUPlayer belongs to others but denied being a video pirate. Users of his technology are responsible for any copyright violations, Shen said, and they are the ones who stream the TV broadcasts--though he conceded that they are able do this only through the use of his technology.

Video: TVU Networks answers copyright questions

Is he right? Arguing that a technology company isn't responsible for the actions of its users is not a new idea and has met with mixed results, said Fred von Lohmann, an attorney with the Electronic Frontier Foundation, which often defends tech entrepreneurs in copyright infringement cases.

"We've seen this business model before," von Lohmann said. "First there was Napster and then other companies who told themselves, 'Hey, if I attract enough users, the (entertainment companies) will have to deal with me.' When they tried that trick in 1999, it led to a downpour of attorneys."

At a time when YouTube and other video-sharing sites are under pressure to cleanse their sites of unauthorized videos, some worry that copyright issues could thwart the ability of online video to reach its potential as a means to distribute entertainment. YouTube recently was asked by a Japanese copyright group to purge its site of 30,000 clips, and Viacom made a similar request regarding videos on the site from "Comedy Central." Representatives for YouTube declined to comment.

In such a climate, it's easy to see why TV networks and cable stations are leery of companies like TVU Networks. The company's peer-to-peer software enables people to stream live TV broadcasts on to the Web without any authorization and involves file sharing--a word that always gives entertainment executives pause.

In some ways, TVU Networks resembles some of the file-sharing start-ups that plagued the music industry for years. There's very little information about the company on its Web site and what is there is a bit confusing. Until recently, the site prominently announced that the company is based in Shanghai. The site's contact page still lists a Shanghai address, but Shen lives and works in Northern California. He declined to say which city. TVU Networks, like many companies, is incorporated in Delaware.

Nonetheless, Shen maintains that broadcasters have nothing to fear from him.

"I really was not intending to catch so much attention," said Shen, who saw the popularity of his service mushroom during the World Cup soccer championship games over summer. "Our goal is to create a new transmission medium."

He said his service was created to do nothing more than to demonstrate his peer-to-peer technology, which he argued can help TV stations save boatloads of money.

Here's how it works: Broadcasts are separated into information packets and distributed among users' PCs. The PCs then exchange the information automatically among them. Nothing has to be uploaded to any server.

This limits the bandwidth costs because broadcasters don't have to continuously transmit content to each individual viewer, Shen said.

He said TVU Networks can embed advertisements into video so that broadcasters can target specific regions and demographic groups, and the company is also working on encryption technology to secure signals.

"For broadcasters, this is a better way to reach audiences online," Shen said.

As for the possible copyright issues his company faces, he said they are not unlike the ones that YouTube is wrestling with.

Copyright attorneys and technology analysts disagree. While many legal experts argue that YouTube qualifies for legal protection under the safe harbor provision of the Digital Millennium Copyright Act, they said TVU Networks appears to have a far more questionable claim.

The most important difference between the two companies is that among the more than 50,000 videos uploaded to YouTube every day, there is plenty of material on the site that doesn't violate copyright. Because of this, YouTube can more successfully make the argument that it doesn't know about specific acts of copyright infringement, said John Stickevers, a copyright attorney with the Boston law firm of Bromberg & Sunstein.

"The safe harbor provision doesn't apply if the service provider has actual knowledge of the infringing activity on the system," Stickevers said.

By comparison, there is rarely ever more than 50 broadcast streams found at any one time on the TVUPlayer, and every cable or broadcast station found on the service and contacted by CNET News.com said TVU Networks is using their content without authorization.

Of course, TVU Networks is not the only company going down this path. One highly anticipated entry that is due to launch in the coming weeks was developed by the makers of Kazaa and Skype. What remains to be seen is how they handle the copyright issue.

Shen might have reason for hope if he's truly just interested in showcasing his technology and if it can really help the industry, von Lohmann said. He said he has noticed a willingness by entertainment companies recently to work with creators of bleeding edge technologies, and Shen may have already taught broadcasters that people want to watch TV without having to jump between Web sites.

"If you'd had asked me about this company a few years ago I would have told you that they would be sued within a week," von Lohmann said. "Now, I think there are lots of people at big media companies that have a wait-and-see approach. They understand that many in the tech sector are saying, 'We want to innovate and at the same time we'll help you guys make more money.'"