Hulu agreed to sell its Japan service to Nippon TV, ending a three-year run to directly expand there. Terms of the sale weren’t disclosed, but it will enable Nippon TV to enter the subscription video-on-demand (SVOD) market in Japan, having previously been limited to transaction video-on-demand. Hulu Japan, which launched in September 2011 as the first international expansion of the streaming video service, was an initiative of former CEO Jason Kilar, who left in 2013 after months of debate about the company’s direction, including a potential sale. Hulu investors Disney, NBCUniversal and 20th Century Fox agreed to put $750 million into the company last year and former Fox executive Michael Hopkins was hired as CEO in October. Hulu Japan, which launched with U.S. content and a $19.25 monthly fee, later cut the price to $9.50 and has since built a roster of 50 content providers and access to more than 1,000 feature films and 12,000 episodes of TV shows. Hulu hasn’t said how many subscribers it had in Japan and Hulu officials weren’t available Friday for comment. Hulu will license its brand and technology to a Nippon TV subsidiary that will continue to operate the service in Japan and provide the same “seamless user experience and product innovation,” Hopkins said in a blog post. It wasn’t clear whether Hulu Japan management and employees will join Nippon TV. Nippon TV officials weren’t available for comment on whether the company will hire Hulu Japan employees and how the SVOD service will be paired with its transactional offering.

Digitalsmiths will generate “double-digit” revenue increases for the “next several years” as TiVo moves to boost its cloud-based DVR strategy, TiVo CEO Tom Rogers said on an earnings call. TiVo’s $135 million acquisition of video monetization company Digitalsmiths potentially gives access to some tier-one pay-TV operators that had eluded it, including Dish Network and Time Warner Cable. Time Warner Cable agreed to build Digitalsmiths’ Seamless Discovery video recommendations engine into its user interface, allowing viewers to find and view content across TVs, smartphones, tablets and PCs. The purchase is expected to enable TiVo to move core set-top DVR features like search and recommendation to the cloud. Digitalsmiths’ customers also reach 64 percent of U.S. pay-TV homes and it has agreements with seven of the Top 10 operators, Rogers said. Analysts said the purchase also will likely deepen TiVo’s ties with Comcast, which has proposed buying Time Warner Cable. The Digitalsmiths acquisition will “allow us to offer our products and services both to operators who want our user interface as well as those who are looking to build their own user interfaces but need strong content and discovery service powering it,” Rogers said. The increase in Digitalsmiths-related revenue will be driven by “increased penetration” with its existing customers and new ones, he said. Digitalsmiths will be “adjusted EBITDA positive” in fiscal 2015, Rogers said. TiVo forecast deployment of Digitalsmiths software to grow to 50 percent of pay-TV subscribers from 10 percent in “the next few years” as its customers move from a second screen application to the set-top platform, TiVo Chief Financial Officer Naveen Chopra said. “You can imagine an operator is deploying an advanced solution with the full TiVo experience, maybe integrating Digitalsmiths into some of their legacy platforms and using digital transport adapters for analog to digital transition,” Chopra said.

The Communications Act empowers the FCC “to regulate all aspects of the retransmission consent regime” and “no provision in the law expressly restricts the commission’s exercise of that authority,” Mediacom said in an ex parte filing (http://bit.ly/1fWWqvj). There are proposed reforms that are consistent with Congress’s clear intent for the FCC to protect consumers from unreasonable retrans costs and service disruptions, it said. The proposals address policies and practices allowing broadcasters to prevent multichannel video programming distributors “from obtaining an alternate source of programming as well as proposals that would more directly limit the circumstances under which a broadcaster could deny an MVPD’s customers access to the broadcasters’ programming as a negotiating tactic,” it said. The filing is on a meeting Monday with staff from the Media Bureau and the Office of Strategic Planning and Policy.

A change in FCC policy toward sharing arrangements such as joint sales agreements (JSAs) would “take broadcasting backward and turn a building block for a successful incentive auction into a barrier to auction participation,” said a Wall Street Journal op-ed Wednesday co-authored by Sherrese Smith, former aide to FCC Chairman Julius Genachowski. The op-ed was written with Eric Dodson Greenberg, also of Paul Hastings. Smith and Greenberg represented Gannett in its deal to buy Belo last year, according to the firm’s website. Restricting JSAs runs counter to the FCC’s stated support for channel-sharing arrangements, the op-ed said. Broadcaster sharing arrangements “offer real-world models easily adapted to include channel sharing,” the article said. “Broadcasters who already share some operations are more likely to use that existing framework to share channels and promote participation in the FCC’s incentive auction,” said the article. Changing the rules for sharing arrangements would “create new uncertainty around the ability and potential to create innovative operating efficiencies,” the article said. “The FCC and the wireless industry should see sharing arrangements as a foundation for future channel sharing and a successful incentive auction."

Aereo’s streaming TV service is “just the tip of the iceberg” if the decision of the 2nd U.S. Circuit Court of Appeals that its network of tiny antennas constitutes a private performance is allowed to stand, said broadcasters in a Brief for Petitioners filed with the U.S. Supreme Court Monday. By legitimizing Aereo’s business model, the 2nd Circuit “created a gaping hole in copyright law that threatens the existence of broadcast TV as we know it,” the broadcaster filing said. Aereo’s and the 2nd Circuit’s understanding of copyright law could be interpreted to allow the retransmission of New York local broadcasting to viewers in California, and allow cable and satellite companies to devise similar systems of their own to get around the retransmission consent regime, said broadcasters. The decision could also cripple broadcaster efforts to advance in the world of over-the-top TV, where they have been careful to “meet consumer demand in ways that maximize, rather then undermine, the value of their copyrighted content,” said the filing. That could cause broadcasters to reconsider providing their programming to the public for free, the filing said, echoing comments made last year by Fox executive Chase Carey. Broadcaster efforts to control copyright shouldn’t be seen as thwarting innovation, the filing said. The choice is between “incentivizing” tech that advances how content is viewed while respecting copyright, and encouraging technology that “offers no real advances but simply provides a superficial basis for eluding copyright liability,” the broadcasters said. The broadcaster filing also attacks statements by Aereo that connect the case to the future of cloud computing. “There is an obvious difference between a service that merely stores and provided an individual user access copies of copyrighted content that the user already has legally obtained, and a service that offers the copyrighted content itself to the public at large,” the filing said.

A Utah federal court’s granting of a preliminary injunction against Aereo Wednesday (CD Feb 20 p19) is a good sign for broadcasters in their approaching U.S. Supreme Court case against Aereo, said analysts in emails to investors Thursday. “This is a huge win for broadcasters with the SCOTUS hearing only 2 months away,” said Wells Fargo’s Marci Ryvicker. “We give broadcasters the edge at this point,” said Stifel Nicolaus. “We are pleased with this outcome and believe there is no reason the Supreme Court would not come to the same conclusion,” said Sinclair CEO David Smith in a released statement. Two Sinclair stations are among the plaintiffs in the Utah case against Aereo. Both Ryvicker and Stifel pointed out that the injunction is the first win for broadcasters against Aereo in court, though they have previously had injunctions granted against competing service FilmOn. FilmOn’s injunctions bar the company from streaming content throughout the country except for the jurisdiction of the 2nd U.S. Circuit Court of Appeals, which had previously ruled in Aereo’s favor. Wednesday’s ruling bars Aereo from transmitting copyrighted material only within the jurisdiction of the 10th U.S. Circuit Court of Appeals. The decision gives broadcasters “a little more ammo in their campaign against Aereo,” said Stifel. Broadcasters “are more likely than not to succeed in some form or fashion at the Supreme Court,” Stifel said. Justice Samuel Alito recused himself from the decision to grant cert to the Aereo case, and “will presumably still be recused, leaving only eight justices to hear the case,” Stifel said. That means the court could theoretically deadlock, Stifel said, “which would leave the Second Circuit ruling in place and the parties to continue to fight it out in courts around the country.” An Aereo victory could lead to broadcasters looking to Congress for a legislative fix in satellite-TV copyright legislation, Stifel said. If that happens, it could “give pay-TV companies leverage to extract concessions from broadcasters on retransmission consent,” Stifel said.

Buckeye Cablevision filed a complaint with the FCC against Sinclair Broadcasting (SBG) alleging that the broadcaster violated its duty to negotiate a retransmission consent agreement. Due to a retransmission consent disagreement, Sinclair station WNWO-TV, Toledo has been removed from Buckeye’s lineup since Wednesday, Sinclair said in a news release (http://bit.ly/Mf5hRe). “While we are aware that Buckeye has been providing its subscribers with a monthly credit of 24 cents as a result of the absence of WNWO, obviously this represents a mere fraction of the value of WNWO’s programming,” it said. “Buckeye is not asking the FCC to dictate any particular outcome in this matter, but the FCC must confirm that SBG violated the rules when it terminated negotiations in this case,” the Buckeye complaint said (http://bit.ly/1dT94iu). Buckeye asked the commission to issue an order that includes finding that Sinclair breached its duty to negotiate for retransmission of the station in good faith and requiring Sinclair to immediately recommence good faith negotiations with Buckeye, it said.

The U.S. District Court in Salt Lake City issued a preliminary injunction against streaming service Aereo, barring the company from transmitting copyrighted material in the jurisdiction of the 10th U.S. Circuit Court of Appeals, according to court documents. The decision is the first loss for Aereo, despite many attempted preliminary injunctions sought by broadcasters. Though Aereo had argued that the court should follow the precedent in prior decisions in its favor, Judge Dale Kimball said he was more persuaded by 2nd Circuit Judge Denny Chin’s dissent in an Aereo case and the D.C. Circuit’s ruling against Aereo competitor FilmOn, court documents said. Along with the preliminary injunction, Kimball stayed the case pending a decision on Aereo’s case in the U.S. Supreme Court. Both Aereo and the broadcaster plaintiffs had requested the stay, but were in conflict over whether Aereo would be enjoined while awaiting the high court decision. Kimball also denied Aereo’s request to move the case to the 2nd Circuit. “We are extremely disappointed that the District Court in Utah has chosen to take a different path than every other Court that has reviewed the Aereo technology,” said Aereo CEO Chet Kanojia in an emailed statement. “Consumers have a fundamental right to watch over the air broadcast television via an antenna and to record copies for their personal use. The Copyright Act provides no justification to curtail that right simply because the consumer is using modern, remotely located equipment."

Oral argument in the Supreme Court’s Aereo case will be April 22, said the Supreme Court website. Though brought to the court as an appeal of the 2nd U.S. Circuit Court of Appeals decision not to grant a broadcaster-requested preliminary injunction against Aereo, both sides asked the high court to grant cert in the case (CD Jan 13 p5). Court cases in multiple jurisdictions involving both Aereo and its competitor FilmOn have been put on hold pending a decision in the high court case, which is expected to be issued by the summer.

The FCC critical information need (CIN) studies are an initiative to “thrust the federal government into newsrooms across the country” wrote Commissioner Ajit Pai in a Wall Street Journal editorial (http://on.wsj.com/1ogUBkc). The studies, of how news organizations gather information and serve their local populations, could allow the FCC to meddle in news coverage, Pai said. Though participation in the study is voluntary, “the FCC’s queries may be hard for broadcasters to ignore,” Pai said. “They would be out of business without an FCC license, which must be renewed every eight years.” Pai compared the CIN studies to the FCC’s now-defunct fairness doctrine, which required broadcasters to give air time to opposing points of view, before being taken off the books in 2011. “The demise of the fairness doctrine has not deterred proponents of newsroom policing, and the CIN study is a first step down the same dangerous path,” Pai said. His comments echo a letter sent to the FCC by Republicans in Congress, which also compared the CIN studies to the fairness doctrine (CD Dec 11 p11).