Officials from Major League Baseball are calling Sling Media’s Slingbox "illegal," and appear to be posturing for a lawsuit. "What they are doing is not legal," says MLB Advanced Media General Counsel Michael Mellis in a recent interview in the Hollywood Reporter. "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." (Talk about a put-down!)

Aldo Cugnini
Analyst

Slingbox turns any Internet-connected PC, Mac, or mobile device into a remote television, allowing the user to watch TV virtually anywhere in the world. Sling Media’s SlingPlayer is a software application that connects users to their Slingbox and allows remote control of the video source device. Both Sony (with its LocationFree TV) and Orb Networks Inc. have developed similar products.

In an interview with CNET News.com, Sling Media CEO Blake Krikorian said calling the Slingbox illegal was "a ridiculous statement," adding that their "relationships with the leagues, including MLB as I understand it, are very strong." Last year, NBA Commissioner David Stern cautiously gave league support to the product, but only after comprehensive discussions among the lawyers.

"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. "[The Slingbox] is not a place-shifting device, [it] is a delivery-shifting device."

Gary Shapiro, president and CEO, Consumer Electronics Association (CEA) fought back, saying, "This is a classic instance of copyright owners trying to suppress innovation purely because it empowers consumers. There is no infringement or piracy here - consumers are simply watching content they lawfully purchase (or receive free over-the-air) in a different physical location. You would think it would be in MLB’s interest to please its fans, no matter where they are located. Unfortunately, MLB apparently doesn’t want business travelers or American soldiers in Iraq to enjoy the nation’s pastime via Slingbox."

"MLB currently enjoys antitrust exemptions and other privileges based on the idea that its content provides unique civic benefits," Shapiro said. "The more MLB concocts extreme access restrictions, the less it should be entitled to special treatment on the grounds that its content is somehow different from other programming. It may be time for Congress to revisit the MLB antitrust exemption, which was granted to ensure the widest possible availability of the unique content offered by MLB to American consumers."

We have not always agreed with Shapiro’s positions, but in this case he is dead right.

Experts say it would be hard for MLB to win a suit, too. Attorney Fred von Lohmann of the Electronic Frontier Foundation said, "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. 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."

Some may argue that that MLB could have a case for "inducement," whereby a product does not infringe copyright by itself, but encourages a user to break the law. However, the Slingbox only relays content that the user specifically selects, which could be argued to be a "non-infringing use." Such an argument won the famous Sony Betamax case, where the U.S. Supreme Court agreed that Betamax was not illegal because it had legitimate uses. MLB is trying to protect its business by claiming copyright infringement. But the rhetoric may be a ploy to protect local television rights as well as distribution over MLB.com. If you follow the money, this explains their rationale: it’s all about control. Local blackouts, content distribution, and local television accountability all figure into the complex business equation. But competition alone is not sufficient defense for a lawsuit - and the business model is continuing to evolve away from straight linear program delivery.

The arguments supporting the Slingbox would appear to have merit: today’s Wall Street Journal reports that MLB’s Bowman "doesn’t think going to court is the best way to resolve the dispute." Bowman is quoted further as saying, "The way to win this is with good content and good technology, not with lawyers." Sounds like further negotiations are at hand. Let’s see how this game plays out; we’re not yet at the seventh-inning stretch.