Free TV App Locast Needs Cash to Survive

(Bloomberg) -- Locast, an app that streams broadcast TV channels online for free, is closing in on 100,000 users, but urgently needs money to stay in business and keep expanding.

“We need some corporate contributions and we need them soon,” founder David Goodfriend said Thursday on a conference call with reporters.

Locast’s goal, he said, was to make channels like CBS and NBC free to consumers -- as they were originally when viewers got their TV over the air. But the business, a registered nonprofit, doesn’t have enough money to service its debt, cover overhead and expand to more markets. Goodfriend plans to start asking users more aggressively for donations and solicit money from corporations.

“I’m in fundraising mode,” Goodfriend said. “I’m calling everyone I know.”

Locast.org operates under a section of federal law that lets nonprofits retransmit broadcast signals without the approval of stations or program owners. After more than a year, Locast hasn’t received any threats from broadcasters, Goodfriend said, even though major entertainment companies have a lucrative business charging pay-TV operators fees for their channels.

“Not even an angry phone call,” Goodfriend said.

Failed Predecessor

Aereo, an earlier startup, didn’t fare so well. The company used tiny antennas to capture over-the-air TV signals and then streamed channels to subscribers for $8 a month. Broadcasters sued, saying Aereo violated copyright law by not paying for rights to their programs. In 2014, the U.S. Supreme Court agreed and Aereo filed for bankruptcy.

Without much publicity, Locast has signed up more than 87,000 people for its service, which launched over a year ago in New York.

The service has benefited partly from contract disputes between broadcasters and pay-TV companies. When customers of Charter Communications Inc. lost channels owned by Tribune Media earlier this month, some subscribers turned to Locast for that programming. Locast has also seen a boost around major sporting events like the Super Bowl, which will air on Sunday on CBS.

Locast plans to expand to Washington and Baltimore to reach a total of nine markets, or about 30 percent of U.S. TV households. It’s also available now in Chicago, Houston and other markets. With more funding, Goodfriend would expand to the West Coast.

His nonprofit, Sports Fans Coalition, started Locast in New York by placing an antenna on top of an office park in Long Island. It retransmits CBS, NBC, Fox and ABC, as well as local channels not owned by the networks.

©2019 Bloomberg L.P.