We’ve done our share of guessing what Sofanatics, a new Finnish stealth startup, is up to with their concept and it seems that finally there’s some light being shed to their work. It comes from an interesting source, one of the blogs hosted by Finnish Broadcasting Company. The blog post is titled “Videochat combines home couches during the Olympics”.
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Sofanatics is Social Videochat Around Sports, Works With Finnish Broadcasting Company
Bambuser Taking First Steps Toward Finland
I accidentally bumped into Pouria Ruhi, the VP of Business at Bambuser the Swedish live video streaming startup (thanks to Janne Saarikko for letting me know he was in town!). I’ve been following the company through different news for a while, but didn’t personally know anyone from there until now. While Ruhi was in a hurry to head to the airport we managed to exchange a few words about the current state of Bambuser and where they’re headed to in the near future.
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Is TV-kaista, The Finnish TiVo like service, In Trouble?
TV-kaista, a service that records all the programs from the most popular Finnish free television channels onto a web server from which you can view the programs by paying a low monthly subscription fee, seems to be in trouble.
In addition to the subscription fee, you have to have the Finnish ‘TV permission’ paid to use the service. Even then, the arrangement is not something that pleases the Finnish Broadcasting Company (YLE) who claims that the service is illegal. This time it’s not only YLE that’s unhappy, also according to Kopiosto (the common copyright organization of authors, publishers and performing artists in Finland) and the Finnish TV channels, TV-kaista is violating the Finnish laws.
The service is clearly beneficial for the end users. Regardless, YLE wants all the TV viewers buy the digital transmission box (Digiboxi) that is needed to view the programs from traditional TVs (not via computer screen).
I personally can’t see a clear reason why YLE and the Finnish copyright guardians would insist on such a policy? Do they want to control the time when the programs are viewed? If so, what good that would possible do? And after all, we all used to have VHS players before we got recording digital transmission boxes (Digiboxi), which are clearly not illegal. To make the picture even more bizarre, there is already a similar service (here in Finnish) by Saunalahti, a Finnish mobile phone operator, which is functioning well with zero lawsuits pursued against it.
TV-kaista CEO, Fredrik Husberg, does not think the Finnish Broadcastin Company has a legit case against it and asks to know what are the specific laws that have been violated. When we asked he confirmed that for some reason YLE has changed its stance that was already positive towards the new service earlier on. Other (commercial) Finnish TV channels are strongly backing YLE on this since for them, in the root of the problem is also the fact that you can effectively by pass all the ads by using TV-kaista.
According the rumors the parties in dispute are gearing up for a major battle by recruiting Finnish law firms. ArcticStartup have been told that for example the TV-kaista have recruited no less than two different Helsinki law firms.
We asked TV-Kaista’s CEO, Mr. Husberg, whether MTV3 or other players had offered to buy the startup but Mr. Husberg declined to comment. We also called MTV3 twice to get a comment and was told that a person responsible for the area of the business would contact us, but never did. An offer from MTV3 to buy TV-kaista would not be a surprise given the potential effect it can have to the commercial players ad sales. Also, MTV3 has just launched a new service called Katsomo, which effectively tries to be an online TV.
For those that have lived or followed the startup market in US, the TV-kaista case will not come as a surprise. Suing startups for IPR and other rights is not uncommon. Big and potentially very expensive law suits are an effective way to block disruptive startups to enter the lucrative markets.
We asked a Helsinki based lawyer specializing in technology and Internet startups, Jaakko Lingren of Hammarström Puhakka Partners Attorneys Ltd., about the case. He commented:
“I don’t know the TV-kaista case and thus can’t comment it. Generally speaking it is true that law suits against startups are very common in the US. The established players aim to protect the markets using lawsuits as weapons. On the other hand, by definition startup business models are novel and the legislation tends to drag behind. In Finland we have not seen such cases very often. Startups should always find out whether its business is working within the boundaries of the local legislation and in overall whether the company is conducting its business carefully. By doing this a startup can minimize the chances of getting sued by an established bigger company.”
Disclosure: Hammarström Puhakka Partners Attorneys is ArcticEvening sponsor.
Get All New TVkaista For Free For Two Weeks
The user can record TV programs from all the most common Finnish TV stations, namely YLE TV1, TV2, FST, Teema, MTV3, Sub, Nelonen, Jim, Urheilukanava and The Voice. Thus, the service enables the user to watch her favorite programs whenever she likes. Not only that, the user can also watch the programs wherever she chooses, since you don’t need any hardware, just a working Internet connection. That is TVkaista. In effect, TVkaista is your normal time shifting TV which you can watch through your PC or Mac whether you run Windows, OSX or Linux. You can either watch the programs on your browser or download them to you desktop.
When I first heard about the service I was sure it would be 100% illegal in Finland. I’ve learned that the opposite is true. It is true because in theory each user has up to four terabytes of memory (whether they decide to pay for all of that is another thing), which means that the programs will be recorded separately to each user. Therefore assuming one has paid her TV license she is entitled to watch any TV show apart from the paid content. We have also heard that next year TVkaista will add even more channels to its current offering.
The founders build the first version by themselves and now they outsource some redevelopment work to a Finnish PHP house Brain Alliance. The new TVkaista is build on Zend framework. The recording technology and the back end will stay the same. The look and feel and the all new player will be build by WWW². The first updated version will have a new layout as well as whole new front end. New Amazon.com-like recommendation features are coming, but rather iteratively along the road instead of all at once: We should see a new feature coming out every month or so. New features will include 1) seeing what your friends have been watching (via social network like profiles), 2) a Watching List where you can choose what you want to watch from the past programs up to two weeks, 3) Favorites which gives you an easy way to follow a weekly series and finally 4) Saved Programs which enables you to save up to 10 programs to the memory which can be watched beyond the two week limit that you have in your watching list.
TVkaista was able to buy the extensive redesign, since unlike many other startups they are making money from the get-go instead of just burning it. TVkaista has already several thousand users and based on the current pricing, already 1000 users will add up to 120,000 euro a year -a hefty sum for a two year old startup with only a few employees. Since they are already making profit, they would not necessarily need third party investors, but they still have a few Finnish ones what we have heard.
TVkaista was jointly found by Pasi Lahtinen and Fredrik Husberg. Fredrik is also currently TVkaista’s CEO. In the past the duo worked in telecommunications industry and thus the idea of TVkaista is a natural next step for them in filling a clear void in the market. TVKaista was set up in 2006 and the first commercial version was launched in the beginning of 2008. One of the major commercial implication is how the platform was build: The platform back end enables a quick set up and replication of the concept, which is ideal for a quick expansion to other countries once the service is fully up and running in one country.
Recently TVkaista opened up the service to iPhone, thus making it possible to watch the programs via wireless WLAN networks and 3G. Along with the easy to use service in a desktop browser, this is another reason why we expect the service to spread like wild fire in the Nordics just like TiVo did in the US market.
We are happy to be able to let our readers try the TVkaista service free of charge for two weeks. To get that, you need to go here. Then type ‘arcticstartup’ to the field that says ‘maksukoodi’ and you are set for two whole weeks. Enjoy!
The beta version of new TVkaista will be online in 7 days and new TVkaista should go public sometime in December 2008.
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