MLB aims brushback pitch at Slingbox

One high-and-inside pitch can be harmless in baseball, but two in a row is a strongly worded message.

This week Major League Baseball lobbed its second brushback pitch at Slingbox, reiterating its stance that the young company is misusing its content. It's not the first time a content owner has expressed concerns over the legality of the trapezoid-shaped set-top box, yet no one has actually filed suit.

But if a content owner did actually follow through with a lawsuit, it could be a tough case to make in court, say industry observers.

"I think (MLB is) deploying that rhetoric to chill innovation in this segment. I don't think it's working, but I think it would be a big blow to the entertainment industry if they went to court and lost," said Fred von Lohmann, attorney with the Electronic Frontier Foundation. But von Lohmann says that doesn't mean MLB won't sue.

MLB Advanced Media (MLBAM), the division responsible for MLB.com and its MLB.tv package, says it hasn't ruled out that prospect. At a recent sports law symposium at Fordham University, The Hollywood Reporter, Esq. reported that MLBAM's General Counsel Michael Mellis called the popular set-top box's place-shifting feature illegal.

"Of course, what they are doing is not legal," said Mellis. "We and other leagues have formed a group to study the issue and plan our response. A lot depends on ongoing discussions. Plus, there's no guarantee that Slingbox will be around next year. It's a start-up."

In an interview with CNET News.com, Sling Media CEO Blake Krikorian said it was "a ridiculous statement" to say the Slingbox is illegal. Krikorian also questioned whether MLB has joined with other professional sports leagues to discuss the legal implications of the Slingbox. "Our relationships with the leagues, including MLB as I understand it, are very strong," he said.

"We're watching what (Sling is) doing. We think the issue is not place shifting; we think the issue is transmission shifting."

--MLB.com CEO Bob Bowman

MLB.com seems to take issue with allowing Slingbox owners' TV channels to be transmitted over the Internet. "Moving content from one form of transmission to another certainly invites that kind of analysis," said Bob Bowman, CEO of MLB.com, referring to Mellis' statement. For instance, if a TV signal was converted into a radio signal, it might raise the eyebrows of those broadcasters involved. The Slingbox, he added, "is not a place-shifting device, (it) is a delivery-shifting device."

Of all the American professional sports leagues, MLB has one of the richest online portals. Fans can purchase an MLB.tv package to watch any out-of-market game live on the Internet, with up to six simultaneous streams and interactive statistics. Packages range in price from $80 to $110 a year.

Neither the device nor its users appear to be breaking any laws by using it to watch baseball games, say legal experts. On the market for two years now, the Slingbox lets customers watch their own television channels from a remote location via a high-speed Internet connection. Sling says it has sold hundreds of thousands of the devices, available in three models ranging in price from $130 to $250.

Watching sports remotely is arguably one of the Slingbox's most compelling features. A Slingbox allows subscribers to watch the cable channels they have already paid for, but at a different location--the office or a hotel--via a laptop, remote PC or mobile phone.

The same goes for subscribers to MLB's Extra Innings television package, which allows cable and satellite subscribers to pay extra to watch out-of-market games on TV. Again, subscribers with a Slingbox can only tune in those cable or satellite channels they have already purchased.

On opposite teams?
Krikorian is quick to argue that the Slingbox and MLB.com's MLB.tv do not compete directly with each other.

"If I want to watch the (Los Angeles) Dodgers (from San Francisco), an MLB.tv subscription will provide out-of-market games. What the Slingbox does is (give) me access to my local in-market team, my San Francisco Giants, which is what MLB.tv does not provide me when I'm in San Francisco (due to local blackout rules)," said Krikorian. "It's the reason we created the Slingbox."

MLB.com is simply trying to protect its content, particularly its robust MLB.tv offering, said Josh Martin, analyst with The Yankee Group. "It's a burden they have to bear. They have a lot of money riding on it. They don't want to risk their MLB.tv service because people are not using it because they have a Slingbox," he said.

It's a thorny issue because a critic would say MLB wants customers to pay twice for content: once for the original cable feed, and again for MLB.tv to watch a home team when not watching from home.

A problem could arise if a Slingbox owner were to rebroadcast the content or allow others to tap into his or her Slingbox feed; that's where the legal issues get tricky. But Sling Media issues special access codes for each set-top box to prevent just that scenario, and explicitly prohibits sharing access codes in its licensing agreement.

And even if a Slingbox owner were to allow someone else access to his or her device to watch an out-of-market game, that would be a violation of the licensing agreement, but Sling Media probably couldn't be held liable.

"I see no way Sling can be held responsible for that. There's no way Sling knows, when it sells to that customer, that the customer is a cable or sports package subscriber," said the EFF's von Lohmann. That would mean Sling would have to know in advance how a certain subset of customers were planning to use the product--an element Sling can't know or control.

Though it might sound similar to the legal defense mounted by YouTube, it's not, according to von Lohmann. YouTube acts as an online repository for video clips submitted by the site's users. Google, which acquired YouTube in 2006, has been sued by, among others, Viacom, England's Premier Soccer League, and a Los Angeles journalist, for hosting video content that YouTube doesn't have the right to reproduce or rebroadcast.

YouTube has argued that it can't control what its users do. But that theory doesn't apply here, says von Lohmann. The Slingbox doesn't store or host any content. And to tune in any programming, like a baseball game, you have to catch it live.

If any content owners were to take Sling to court, they could possibly argue "inducement," a legal theory the Supreme Court recognized in the landmark file-sharing case of MGM v. Grokster, in which von Lohmann provided legal counsel. In that case, the court agreed that technology vendors can be held liable if they actively encourage users to violate a copyright. In a potential case against Sling or its customers, "If (content owners) want to make that argument, I think it's very likely that a court would find that fans watching their own programming they've paid for would qualify as fair use," he said.

A potential legal fight involving Slingbox would also be similar to an older copyright case involving Sony's Betamax product. The U.S. Supreme Court agreed that Betamax was not illegal because the device was capable of "non-infringing uses." If MLB were to start a copyright battle with Sling over its content, Sling could win for the same reasons.

Sling says it has not encountered problems with any other professional sports leagues. In fact, the commissioner of the National Basketball Association, David Stern, invited Sling to present the product a year ago at its NBA Tech Summit, indicating his approval of the device.

"All the other leagues understand what business they're in," said Krikorian. "All the other leagues understand that their paying fan is their key asset and crown jewel. (The Slingbox) further tightens the relationship between the league and that consumer, and that is a good thing."

MLB.com says it is still in observation mode. "We're watching what (Sling is) doing. We think the issue is not place-shifting; we think the issue is transmission-shifting," said Bowman. "We're a company that has stood foremost for our fans and that will never change."

In a situation like this, both sides make a fair argument. "It comes down to content owners attempting to retain (pre-Internet) business models in an online world and trying to hinder consumers who are trying to do the right thing and use their content the way they want to use it," said industry analyst Josh Martin.

And suing fans isn't exactly a popular strategy, as demonstrated by the recording industry--which may be part of the reason content owners haven't made any legal moves against Sling or its customers.

"I think the mainstream players in the entertainment industry don't want to take a chance in pressing a case, losing, and setting a precedent," said von Lohmann.