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Call The Lawyers: Bamboom Wants to Be Netflix for Broadcasters

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Bamboom CEO Chaitanya Kanojia
Cord cutters or those who want to watch American Idol or local sports teams in real-time on their connected devices will soon have a new option thanks to Bamboom, a startup that said it raised $4.5 million today in seed capital. The company wants to become a Netflix (s nflx) equivalent for the broadcast world — but the broadcast world may not enjoy having the company infringe on its turf. Similar companies, such as, have tried this and failed.

But the demand for broadcast content is there and Bamboom aims to fill it with legal muscle and infrastructure accumen. Bamboom wants to create an array of antennas that are each smaller than a dime (they look like earrings) to gather the signals that local television stations emit. It will then translate those to signals so they can be delivered over an IP network, which means any web-connected device that has an HTML5-compliant browser can play the program. This could be a Roku, a web connected TV, an iPad or any number of other devices. For those without such devices, the company also offers a box to connect to an older television so it can receive the signals as well.

As a cord cutter who can’t get a broadcast signal using an over-the-air antenna, I would happily pay for this service, especially if it’s in the sub-$10 range, which Bamboom CEO Chaitanya Kanojia says is where he’s trying to keep the monthly subscription price. Kanojia has a history in the television business: his previous startup Navic did TV ads and was bought by Microsoft (s msft) in 2008. His history is likely one reason led by FirstMark Capital led the $4.5 million round. Also participating were High Line Venture Partners, SV Angel, First Round Capital and Highland Capital Partners.

That’s a significant “seed” round, especially when most startups are raising a few hundred thousand to prove out their ideas. However, in addition to manufacturing the antennas, building out a cloud of specialized appliances for doing real-time transcoding on the cheap (Bamboom built a special chip that uses DSP cores to keep the transcoding costs low), the startup also needs a legal war chest because it’s really a question of when, not if, it will get sued.

“Our investors planned for this” Kanojia said. “We need money for infrastructure and lawsuits.”

The company designed its distribution network with a court case in mind — a legal fight between content owners and Cablevision (s CVC) that led to the judge ruling the cable provider could store and stream content from its central location (called a headend) as opposed to sending each customer a digital video recorder. The court determined that it could do this because it still counted as a private viewing as long as the content was requested by and performed for a customer.

For Bamboom that means that each subscriber has to have an antenna on its array, so there’s no question that the viewing of the program is called for and controlled by a customer. An LA Times article on the company points out that this workaround may not be enough, given that startup Zevida has tried to make a slightly analogous argument in the DVD industry and was subsequently sued. That case is still in the courts.

There’s also a question of how much and how quickly Bamboom will build out its service. In order to offer it, Bamboom has to spend money setting up the antenna array and the fiber to send the signals to its transcoding cloud and then to the customer’s home. Kanojia declined to say what this costs, but says it’s orders of magnitude less than the cost of setting up a cable plant. He also wouldn’t talk about his strategy for selling the product to consumers and gaining customers, or where Bamboom would go next.

So with the capital to build out a technical trial in New York and then open up a wider beta there in the summer, as well as lawyers already in the wings for the inevitable lawsuit, Kanojia is ready to get down to the fun of building out his company. For him it’s a matter of providing access to a service that the public technically owns. He argues that broadcasters only have access to this spectrum because they are fulfilling a public good, but if people can’t technically get to those signals because of interference then they are denied access to a service they are entitled to.

“We’re providing access of a public resource to the public, ” he said. Of course, he is charging a fee for the service, but he points out that cost is merely the rental associated with the antenna. Presumably it does more than cover the costs of building and supporting the infrastructure associated with Bamboom, so the business can turn a profit, but that’s an issue the company can worry about after it runs the legal gauntlet, aces its technical trials and convinces users to sign up. I hope it makes it to Austin, so I can try it.

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