(Not affiliated with either party, but here's my take)
Simple: clear fair use, and responsiveness to takedown requests.
Take NFL games as an example:
At any given time you can probably find a channel showing any NFL game, but you won't be able to find one that lasts the whole broadcast. That means they're pulling copyrighted content in < 3 hours, which is pretty damn good.
Simultaneously, you can find lots of UGC that isn't pirated on justin.tv (i.e., the site exists for more than piracy).
I strongly suspect you're right. The same is true for tennis grand slams. Watching the last few tournament stages is practically impossible, streams are shut down within minutes. Oh, and the infuriating "max number of viewers for your country reached" message. Not that you can watch it anywhere else for love nor money.
The NFL has access to a tool (along with over 150 other companies) to take content off of Justin.tv instantly. We are pulling the content down immediately after they submit the form asking us to.
Justin TV's legit content consists of video game streams and young girls life casting.
A vast majority is pirated material. If you look at entertainment, every single one is pirated on the first page(by viewers). They are responsive to takedowns but what then happens is a new NFL stream of the game pops up or goes private. They are legal in following takedown requests but it highlights that the DMCA is not very effective on live streaming sites.
Viewer numbers of their 5 biggest sections front page:
The long answer:
Like any site with UGC, we have to deal with the issue of copyrighted content. We deal with it by going above and beyond the requirements of the DMCA and working with copyright holders like Fox (among hundreds of others we have relationships with) to make sure their rights are respected.
I'm a founder of Justin.tv. This hasn't been reviewed by a lawyer.
DMCA basically gives you 72 hours to take something down. Now that worked in a world where content was intended to have an unlimited lifespan ie- music, youtube videos,etc. With livestreaming video, the damage is done within a few hours or less.
Livestreaming sites have put content fingerprinting technology in place and often respond very fast to takedown notices. Even the fastest of responses will still cause damage. So does that mean JTV puts in a system where content owners can just start taking things down at all like ebay does with auctions? I don't know, that's scary.
I would never cancel cable because I can watch sports on a livestream site. The quality is usually crap with foreign commentary. Odds are the people watching that content don't have cable anyway (like myself).
There are two missing pieces to the content side of things when it comes to shifting people away from cable subscriptions: local news and sports. Local news could be solved in a fairly straight forward manner. Sports is up to each league,etc. If I were the NBA, NFL, MLB,etc. I would start working with livestreaming sites to do test runs of pay per view content. Once most sports games are ubiquitously available on the internet in real time and for replay Comcast should be scared. If Comcast actually had their shit together, they would have purchased JTV/Ustream/Livestream when they were cheap.
Right now, the real value of live video isn't from illegal sports or content, its from real time interaction. If you've ever seen a celebrity or music artist interact with their fans on a live video site, you know the platform is something special. The numbers that Jonas Brothers/Ustream/Facebook pulled in were absolutely mind blowing.
I am the VP Marketing at Justin.tv, this was also not reviewed by a lawyer :)
"DMCA basically gives you 72 hours to take something down"
I don't believe there's any law or precedent that states 72 hours (or any number of hours) as a required turnaround time. More importantly, for the vast majority of infringing broadcasts, we don't take 72 hours (or any number of hours) to respond to a request for takedown. Instead, the vast majority of owners of infringing content (over 150 companies including probably all copyright owners you can name) have access to a tool that lets them take down content instantly without any intervention on our part.
"Livestreaming sites have put content fingerprinting technology in place and often respond very fast to takedown notices"
When you refer to these sites, I'm curious which ones you have in mind other than Justin.tv. We do have live finderprinting and we do respond instantly to most takedown noticed. However, I don't know of other live sites that are doing either of those. In fact, Ustream was sued this summer due to not responding to takedown notices and Fox's content group legal counsel has specifically stated that Livestream has not gone to the same measures to protect copyright holders as Justin.tv.
Simple: clear fair use, and responsiveness to takedown requests.
Take NFL games as an example:
At any given time you can probably find a channel showing any NFL game, but you won't be able to find one that lasts the whole broadcast. That means they're pulling copyrighted content in < 3 hours, which is pretty damn good.
Simultaneously, you can find lots of UGC that isn't pirated on justin.tv (i.e., the site exists for more than piracy).