Loopholes Aren’t A Technology

Another new startup promises to fix TV, apparently by using video streaming legal loopholes. Beware of companies bearing obvious promises.

NimbleTV is a service that says it will let you watch any TV content at any time, on any device. To borrow the TV industry’s term, it would be the first true “TV Anywhere” experience: it’ll have all the content, unlike Hulu; it’ll make shows available at any time, unlike traditional on-demand; it’ll work on any device that can stream video. All the things it seems like TV providers ought to be already offering us.

To pull this off, Nimble had to do one of two things. They could reinvent the TV industry from the ground up, negotiating deals with channels and channel bundlers, effectively recreating the cable model online. This would have been very hard.

The other thing Nimble could have done is piggyback on the TV industry as it currently exists, and just re-stream their channels for a fee. That’s what the companies implies will be happening — they’ll serve as an “agent” between you and your TV provider, buying and managing a satellite or cable account on your behalf, then sending the content through to you as a much more flexible, on-demand digital service. This is the perfect example of a loophole startup.

Here how pull off a loophole startup:

1) Find an industry that’s doing everything wrong
2) Concoct an obvious plan for doing it right
3) Execute the plan, claiming to have found a loophole that nobody else has thought of, in such a way that depends heavily on the current big players
4) Get bought or get shut down. But no matter what you do, don’t fulfill your initial promise

Smart startups do something that nobody else has thought of, or that nobody else has been able to do right. Loophole startups do things that everyone has thought of, and that nobody has done for obvious reasons. Comcast could make its own version of Nimble tomorrow. It hasn’t, though, because it doesn’t want to — neither it nor Time Warner, or for that matter the channels they license, have figured out how to continue making as much money as they do in the inevitable on-demand future, so they’re dragging their feet. It’s not that they haven’t considered the NimbleTV concept, it’s that they don’t want it right now. As long as they control TV content — a premise that’s explicitly part of the Nimble concept — then TV viewing has to be on their terms.

Nimble exists to be bought for its technology. If they build a decent product, maybe a cable or satellite company will come along and plug it into their infrastructure. Ok! Fine! It worked for Sling! But in the meantime, let’s not do this:

Yes it will! You know this! Nimble knows this! So did Aereo, which is currently getting sued by practically everyone its service touches. You can’t just trick copyright law, much less make a business of it. (For an up-to-date list of loophole startups, just set yourself a Google alert for “startup sued copyright.”)

There’s no need to entertain the notion that loophole startups could every actually be a thing, or that you should spend money trying them. They’re behind-the-scenes business maneuvers conducted in front of the public, which they use only for leverage in The Big Deal. Real change in the TV industry will either come from all the way outside or all the way within, not from the murky gray space in between.

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