Media: All about ... Broadcasting on the internet

Channel 4 simulcasts will test the legal boundaries.

Barely a week goes by without Channel 4 - the naughty schoolboy of the TV industry - being rebuked by a trade body or industry watchdog. Last week, it found itself on the wrong end of a stern warning from the IPA, which accused the broadcaster of exposing agencies to the prospect of being sued by actors and musicians following the launch of simulcast, its latest venture into uncharted territory under its chief executive, Andy Duncan.

Simulcast is the name for Channel 4's new TV-on-the-internet service. The broadcaster has become the first UK broadcaster to stream its programmes and the commercials in between live on its website.

According to the IPA, the biggest impact could be felt by media agencies, which it says risk legal action.

Some of the broadcaster's biggest hits, including the expensive US imports Lost and Desperate Housewives, are being simulcast on its website, along with the commercials booked to run in the ad breaks. The IPA has asked Channel 4 to indemnify clients and agencies against artists and musicians suing for royalties. "If Channel 4 is going to broadcast TV ads online, it needs to ensure all rights are cleared or provide indemnity," Marina Palomba, the IPA's legal director, said last week.

Channel 4 argues that simulcast is merely an extension of its TV offering. Sara Geater, the head of commercial affairs at Channel 4, says: "Simulcast is a linear service; an extension of our TV rights because it's going out at the same moment, in addition to the TV service, as opposed to an extra service." Geater is also adamant the broadcaster is not generating additional revenue from the free service. "We're trying to get audiences to take up watching TV in different areas and adopt new technology," she says.

David Cuff, a TV industry consultant and former broadcast director at Initiative, says Channel 4 is safe from infringing the rights of artists, providing it "has blocking that prevents the simulcast service from reaching markets outside of the UK", adding: "Online streaming rights will be written into its core service rights and standard commissioning rights."

However, he warns that if Channel 4 is unable to block transmission to other markets, it could find itself in hot water.

1. Channel 4 made its first major foray into broadcasting TV on the internet in November last year, when it previewed The IT Crowd one week before transmission on its flagship channel. Channel 4 claims the show was watched on the internet by 400,000 viewers. However, as far back as 2002, it had been streaming Big Brother on the internet in time-delayed subscription packages, without the ads.

2. ITV first got in on the act in April this year, when it began running programming clips on itv.com. Its Freeview offering, ITV Play, was the first channel to be simulcast on its website, and as of last week Love Island was made available to broadband users with TV-style ads embedded in the programming. ITV is also planning a number of upgrades to itv.com over the next 18 months, and from the autumn it will stream Champions League football matches on the website. It has yet to decide whether it will simulcast with the same ads booked on its TV channels, but the odds strongly suggest it will.

3. BSkyB, which launched its broadband offer this week, has been streaming its movies online via its sky by broadband service. It is also offering Sky Sports subscribers football, cricket and rugby highlights.

4. Flextech has been streaming some programming from its Bravo and Trouble channels on the internet, including Man's Work, The Secret Life of Us and The Real Football Factory, since the spring. It said it has no plans to simulcast, but will offer broadband users a week-long preview of its latest acquisition, My God, I'm My Dad, from August.

5. The BBC is set to shake up this fledging market later this year with the launch of an integrated media player based on its successful "RadioPlayer", which gives listeners access to radio shows via their computers. The player will let people download TV programmes to their PCs to view for up to a week after transmission. According to an industry insider, the media player will be called the "i-player", no doubt provoking protests from the Apple founder, Steve Jobs, and the commercial broadcasting industry at large.

WHAT IT MEANS FOR ...

BROADCASTERS

- As TV channels multiply at an increasing rate, broadcasters are finding it difficult to target the holy grail of advertising demographics: young, upscale adults.

- Broadcasters will be pleased at the possibility of reaching customers via a new route but, on the other hand, are mindful of a potentially hazardous and expensive legal minefield.

ADVERTISERS

- Advertisers are becoming increasingly worried about shrinking TV audiences as they still value the TV as the ultimate medium. Streaming TV content online offers an exciting new opportunity. Neil Johnston, the head of TV at OMD, says: "The internet offers advertisers a particular type of audience they can't get anywhere else. Big-spending brands looking for a young audience - Vodafone for example - would love to get around this type of content if it can deliver audience in big numbers."

- However, the numbers are still small. Audiences for even hit online programmes such as Channel 4's IT Crowd numbered only a few hundred thousand and some advertisers are sceptical that big TV hits, such as ITV1's Coronation Street, will attract sizeable audiences online.