JEFF BAUMGARTNER, Senior Editor, Light Reading
SourceJason DeMeo, CEO of Omniverse One World Television, insists that he is squarely on the side of TV programmers, studios and other content owners' desires to protect their content and intellectual property. He says he also understands that they are eager to crack down on pirates and others that violate their copyrights.
But with respect to a lawsuit that he and his company are facing from the Alliance for Creativity and Entertainment (ACE) over alleged copyright violations, DeMeo has this message: You've got the wrong guy. (See Big Programmers & Studios Bring Hammer Down on Omniverse .)
"Everyone is framing me as some sort of pirate... when I'm 100% compliant with what I'm supposed to do," DeMeo said in an interview with Light Reading.
Omniverse is under fire by ACE, a legal consortium backed by several major US programmers and studios, over claims that Omniverse's involvement in enabling a variety of relatively inexpensive OTT-delivered pay-TV services, such as SkyStream and TikiLive, is illegal.
The Hovsat connection and the mind-blowing 100-year deal
DeMeo insists that his company, Omniverse, is on solid legal ground, through a joint venture/partnership it has with company called Hovsat Inc. Hovsat is a small private cable operator based in New Jersey that operates headends in Freehold and Tinton Falls, NJ.
Hovsat also has an extremely long-term pay-TV agreement with DirecTV, which dates back to when Hughes ran DirecTV, DeMeo says.
That asserted tie-in would help to explain why DirecTV's logo and other evidence indicating links with the satellite TV company have shown up on OTT-TV services that are distributed by Omniverse's partners. (See Is Omniverse Sourcing Video Feeds From DirecTV? )
DeMeo said Omniverse established its business relationship with Hovsat in 2015 through a third party, whom DeMeo did not name. Omniverse, which brought its consumer direct response experience to the table, has full collocation agreements that allow it to put equipment in Hovsat's facilities and list out the channels that are part of the packages that Omniverse is allowed to grab. He likewise characterizes Omniverse as simply a marketing and technology company, with a particular focus on areas such as conditional access, security and software, that has helped Hovsat and its partners bring pay-TV services to a much wider group of consumers, and that everything is being done legally.
Hovsat, he said, is linked to Hovnanian Enterprises, a Matawan, NJ-based home builder and residential community developer with operations in multiple US states, founded in 1959. Internet searches show that the address for Hovsat -- 1 Dag Hammarskjold Blvd. in Freehold, NJ -- is (or maybe has been) the address of a cable company called Grand View Cable. Hovsat, DeMeo said, is also associated with SpeedUS Corp., a wireless local multipoint distribution service (LMDS) pioneer formerly known as CellularVision USA Inc. that was briefly in the TV game. SpeedUS is also listed at the Freehold address. The home-builder's connection to Grand View Cable was referenced in this 2015 obituary for company founder Vahakn Hovnanian appearing in The Armenian Weekly.
According to DeMeo, Hovsat and Hughes signed the original deal in the early 1990s, and the length of the deal was for the incredible duration of 100 years, and allowed for national distribution rights, given that the home-builder operated in multiple states and wanted to provide video services to those communities. Knowing that their operations cross state lines, Hovnanian Enterprises, he said, decided the best option was to pursue the development of a private cable business.
"They can't live with a short-term contract; they needed a long-term contract," DeMeo said per his understanding of how the deal originated decades ago. "They are potentially on the hook to serve neighborhoods for potentially 100 years... Having a five-year agreement doesn't work if you're going to be a supplier of cable for an entire community."
The contract, he said, "will blow your mind." "It's not a normal agreement, it's extremely unique... 80% of our contract is about protecting intellectual property... We're just distributors and marketers, that's all we are."
He said the main focus of the JV with Hovsat is geared to consumers in the prepaid mobile market, as most of the customers that get service through an Omniverse partner either can't get pay-TV from a traditional pay-TV provider or are restricted due to bad credit or no credit. (See Comcast & Prepaid TV – There's an App for That and Vidgo Soft-Launches National OTT-TV Service .)
Hovnanian Enterprises, which markets and sells homes under the trade names K Hovnanian Homes and Brighton Homes, has yet to respond to multiple inquiries from Light Reading concerning its business relationship with Omniverse.
When presented with the additional details provided by DeMeo, including the existence of a purported 100-year contract, DirecTV would only refer to the company's earlier statement on the Omniverse matter, before Hovsat's involvement entered the picture: "They are not our customer and our content can't be licensed in this manner."
Of course, the idea of Internet-based, over-the-top, nationally available pay-TV services weren't even a consideration almost 30 years ago. But according to how DeMeo, his partners and legal counsel interpret the Hovsat deal, it does not preclude how Omniverse is operating today and how it has teamed up with various distribution partners such as include TikiLive, SkyStream, Clikia, SiliconDust and VivaLiveTV.
DeMeo said this is the first time he has publicly mentioned a specific linkage between Omniverse and Hovsat. However, an Omniverse tweet in January 2018 does appear to provide some evidence of that Hovsat connection in the form of a hashtag:
DeMeo 'fed up' with criminal claims, calls lawsuit 'reckless'
So, why is DeMeo reaching out now and offering further comment on his company and the contract even as the case is still ongoing?
In addition to reacting to the blog post about Omniverse published Monday on Light Reading, DeMeo said he wants to illuminate some details about Omniverse's relationship with Hovsat and Hovsat's unique, super long-term video services contract. Plus, he's "just fed up with being compared to criminals out there. I just want the benefit of the doubt. I deserve that."
He called the ACE-led legal challenge "reckless," believing that it stems back to the suit that ACE lobbed at Dragon Box that resulted in a settlement and the shutdown of the service. (See ACE Slays the Dragon Box.)
"I'm against piracy," DeMeo said, noting that Omniverse only deals with live TV channels and that its distribution partners strike their own separate VoD movie package deals.
"I worked and distributed and handled intellectual property for multiple producers before I ever did this for a living," he said. According to his LinkedIn profile, DeMeo was the founder of New Media Buys, a company that distributes movies, TV series and other specials across various media platforms.
And to say DeMeo is confident that he'll win the ACE challenge is an understatement. "There's going to be so much egg on their face at the end of this, it's not even funny," he said, noting that his deposition is scheduled for March 9.
ACE said it could not comment further about Omniverse while the litigation is ongoing. The plaintiffs identified in the lawsuit (PDF) filed last month include Paramount Pictures, Columbia Pictures, Disney Enterprises, 20th Century Fox Film Corp., Warner Bros. Entertainment, Universal City Studios Productions, Universal Television and Universal Content Productions.
A big part of DeMeo's confidence is rooted by his and his legal counsel's understanding of the contract in question. Plus, he added, Omniverse has already defeated multiple cease and desist orders from major programmers after presenting them with the paperwork.
"Fifty percent of the channels that I provide have already sent cease and desists, and we've won," he said, citing Discovery Communications and Viacom among the examples. "They never went to court. We proved our agreements, and we passed." Discovery and Viacom have both been asked for comment to verify that.
"What nobody realized is that these [channels] aren't coming from Omniverse; they're coming from Hovsat" and they're being paid the carriage fees due to them, he said, adding later that he's endeavored to keep the Hovsat part quiet so as to not draw too much attention to the joint venture.
He acknowledged that the contract Hovsat has with DirecTV amounts to what many would call a bulk rate discount, with the intent of servicing various communities they developed around the nation. "But it's not a traditional MDU [multiple dwelling unit] deal," DeMeo stressed.
But how does Hovsat and Omniverse get around national digital/OTT distribution rights that typically are negotiated differently and aren't necessarily cheap?
"Because it was never in the agreement to begin with," he responds. "The only thing in that agreement is protecting their intellectual property; that's it... And we do [that] better than anybody... It was basically a national contract; it wasn't limited to DMAs [designated market areas] or OTT. Those terms, when they engaged into that agreement, didn't even exist." [It's not clear when Nielsen started to use the DMA term based on our research so far, but we've asked the ratings and audience measurement giant for assistance on pinning down a year.]
But it appears that programmers and studios tied to the ACE case don't agree with Omniverse's interpretation of the contract. DeMeo says he doesn't blame them. "My first gut reaction to this [contract] would be, this is dead wrong, based on today's contracts," he said while still holding firm on the belief that everything being done under that contract is on the level.
"I'm literally doing everything by the book," DeMeo claimed, noting that Omniverse pays all the requisite licenses, including those for metadata from Gracenote, as well as fees to patent/licensing clearinghouse MPEG LA (Omniverse is listed as an H.264 licensee that's in "good standing"), and that he even took SiliconDust, one of his distribution partners, to task when it appeared they might be out of compliance on something.
'Powered by Omniverse' a verification aid
The lawsuit argues that the video streaming services claiming to be "Powered by Omniverse" show that Omniverse is brazen and "not shy about their role" it plays with the alleged infringing OTT offerings
DeMeo said having its distribution partners label their services as such is a requirement and further serves as proof that he and his company are not trying to hide anything. In fact, he claims that the idea for that came from a lawyer with a programmer that thought that such labeling would make it easier for them to determine if a service was an authorized distributor or possibly stealing content. "It was great advice that they gave us, quite honestly," he said.
He's hopeful that this will all get resolved, and soon. "By the time this is done, they're going to happy, we're going to be happy and we'll all proceed," DeMeo said, adding later that Omniverse has a deal with a major US broadband company that has done its due diligence on Omniverse and "doesn't care about the lawsuit." (See Omniverse Will 'Engage Quickly' to Resolve ACE-Led Copyright Allegations .)
Dish & Cox M&A claims
Long before this recent legal dust up, Omniverse drew M&A attention from Cox Communications and Dish Network about five years ago when they were eyeing new ways to tackle the pay-TV market, DeMeo claims. (See Cox's Fledging OTT Service Flares Out.)
Cox, he said, "waved a check in front of my face" in the presence of one of their attorneys at a NATPE conference, while Dish made a play for Omniverse during at an annual event run by the now-defunct Electronic Retailing Association.
DeMeo said he shot down both offers. "I'm not looking at the exit. I'm looking at the long term," he said.
Cox and Dish were asked if they had any M&A-related interactions with Omniverse. Dish hasn't responded to that question, but a Cox spokesman said: "We regularly review many investment opportunities across our business and don't comment on any related rumors or speculation."
Is Omniverse Sourcing Video Feeds from DirecTV?