That has raised the ire of TV firms, which say the Web site is blatantly violating their copyrights. Canadian stations last week demanded the young Internet site shut down its operations by Dec. 6 or face a court battle.
"The situation that they have gotten into is not friendly," Canadian Film and Television Production Association president Elizabeth McDonald said. "It is confrontational, because they did not consult with us at all."
The prospect of Internet television has jumped to the forefront of broadcasters' and policymakers' minds in recent months. Big Net companies like America Online and Yahoo are interested in offering their own broadcast services, but say Congress still needs to iron out U.S. rules on the issue.
But iCraveTV.com, launched by Toronto company TVRadio Now, is pushing the industry's buttons.
The company's Web site allows free access to 17 television stations, including programming from several U.S. network affiliates that broadcast from Buffalo, N.Y.
The site is geared for Canadian citizens, and viewers have to wade through several pages of legal language and enter a Canadian area code to prove they live in that country. But there is nothing that bars viewers in the United States or elsewhere from tapping into the site.
Canadian law allows third parties to retransmit television stations' signals without first obtaining a license, as long as the signals are transmitted at the same time as the original broadcast and aren't cut in any way. iCraveTV says it is following the law to the letter.
"We view [the rules] as very clear," iCraveTV's CEO Bill Craig said. "The law isn't complicated at all."
So far, Canadian TV and programming interests are taking the lead in fighting the Web company's service. At least one U.S. station has threatened legal action, but Craig said he hasn't heard yet from any American TV interests.
"We very much share [the Canadians'] concern," National Association of Broadcasters spokesman Jeff Bobeck said. But any legal action will likely be taken by individual stations, he added. "It's their signals that are being stolen."
The National Football League (NFL) sent the company a letter warning of potential legal problems if its games were broadcast online without permission, but hasn't yet taken any official action. The NFL may seek as much as $100,000 a game if iCraveTV.com doesn't stop showing games, according to a Bloomberg report.
But the Canadian programmers want the Web site to stop showing their content as soon as possible--or at least pay fees for the use of the shows.
The Canadian Association of Broadcasters is contacting its members and asking for legal documents detailing any harm suffered as a result of the online TV site. A spokeswoman said the organization would likely file a lawsuit before the end of next week.
The film and TV producers' association says it plans to seek its own injunction to shut the site down.
"We are not opposing new distribution methods or new technologies," McDonald said. "All we're saying is that if you're using our members' intellectual property, then you have to ensure that they get paid."
Craig said this isn't a problem. He's asked Canadian copyright authorities to help determine a way to reimburse TV programmers for content, and says he's willing to pay retroactive fees as soon as a deal is worked out.
But iCraveTV isn't about to pull the plug, he adds. His attorneys sent the broadcasters a letter yesterday saying the Web show would go on.
"We've put too much money into this [to stop now]," Craig said, noting that the company spent close to $13 million to bring the Web site online. "I've got a lot of my personal skin in this."