Entertainment Firms File Suit to Shut Down RecordTV.com

Walt Disney Co., Time Warner and 10 other entertainment companies filed a lawsuit Thursday in Los Angeles seeking to shut down an Internet site that enables users to record television shows and watch them online.

The suit targets RecordTV.com, a site started three months ago by an Agoura Hills resident who--with just eight computers and no outside funding--has provided the latest challenge to the entertainment industry’s ability to control the distribution of its content.

RecordTV allows users to choose TV shows they would like recorded, and then watch them later on their PCs. The quality is poor and the service is erratic. But with no marketing, the free service already has attracted 100,000 regular users, said David Simon, 40, the creator of the site.

The suit, filed in U.S. District Court in Los Angeles, alleges that RecordTV.com and Simon “have taken what is not theirs, duplicated it, and distributed it for their own commercial gain to millions of Internet users around the world.”

Jack Valenti, chief executive of the Motion Picture Assn. of America, called it “one of the most blatant violations of copyright laws” the association’s attorneys have seen.

RecordTV’s service is in some ways similar to services that other online music and television sites, including MP3.com and Canada-based ICraveTV.com, have had to abandon under legal challenge. But Simon said he believes his business is legally protected.

“Users have the right to copy or time-shift programming to suit their personal use,” said Simon, a computer programmer. “I think we’re no different from a VCR.”

The suit seeks to force RecordTV to stop showing copyrighted works, and to pay more than $10 million in damages. Other plaintiffs include Metro-Goldwyn-Mayer Studios Inc., Columbia Pictures Industries Inc., Paramount Pictures Corp. and 20th Century Fox Film Corp. Simon said his privately held company has almost no financial resources.

A critical issue in the suit is whether there is a legal distinction between consumers making their own copies of programming on VCRs or new devices such as TiVo--which courts have permitted--versus having another entity make copies for them.

Some copyright experts said Simon’s legal position is tenuous, because his company is not merely a conduit for content, but actually records shows without permission from broadcasters. In fact, unlike a VCR, his service enables users around the globe to see programming they might not otherwise have access to.

“He’s doing the recording himself, and that is an infringing use,” said Daniel Harris, an intellectual property attorney with Brobeck, Phleger & Harrison in Palo Alto.

But Michael Rhodes, a San Diego attorney who has represented MP3.com in its legal battles against the recording industry, said he is considering representing RecordTV.com, and that the legal issues aren’t necessarily clear-cut.

One interesting wrinkle of the case, Rhodes said, is that the RecordTV service is entirely controlled by its users. “There is no copy made unless the user stimulates the copy,” Rhodes said. “That makes it look and feel more like a virtual VCR.”

MP3.com agreed last week to pay two record labels an undisclosed amount in the millions to settle a suit filed by the record industry. The settlement enables the San Diego-based company to resume letting users listen to songs via the Internet, provided they can show they own a copy of the song by inserting a CD into their computers.

ICraveTV.com also provoked a suit by the entertainment industry this year when it began broadcasting American television programming over the Internet without permission. The company halted the service in February, saying it couldn’t afford to continue fighting the suit.

Simon said he originally set out to enable his children to watch TV cartoons from computers in their bedrooms. Now he has eight computers recording programming 24 hours a day from a cable television feed.

Users register at the site and click through an on-screen guide, selecting the programs they would like recorded. The service covers every cable channel except pay channels such as HBO and Showtime. The content is stored up to a week, and is shown over the Internet using Microsoft Corp.’s Windows Media Player program.

Simon said the service is spotty because demand has overwhelmed his computing resources. He said he has had a number of discussions recently with venture capitalists, but hasn’t received any funding. The company is collecting a few thousand dollars a month in advertising revenue, he said, about enough to cover the costs of operating the service.

“The networks’ argument has been the technology is not there yet for them [to provide online programming],” Simon said. “But the demand we have is astronomical, even with lousy quality. I think these networks are missing a major opportunity.”

Valenti said the plaintiffs in the suit have spent millions of dollars developing online businesses. “We’re not against the Internet,” he said. But until the threat of piracy is curtailed, “we have to protect ourselves.”