Another victory for the Hollywood-Industrial Complex

aereo-v-hollywoodIn a June 25 decision that wasn’t even close, the Supreme Court voted 6-3 against Aereo, a start-up company that believed it had found a legitimate way to deliver a compelling television service for customers over the Internet.

The Aereo service seemed to have executed a clever end-run around the television networks and content owners by basing their service on something already deemed legal: enabling customers to record television content over the airwaves.

We the people

Some years ago, the courts ruled that it was perfectly legal for people to watch and record programming that was broadcast over the airwaves through their TVs or onto their VCRs and DVRs. After all, we “the people” own the airwaves, so why shouldn’t we be able to capture signals that are broadcast over the airwaves. We are, and that’s undisputed.

Aereo’s solution

According to Aereo, they were simply providing another way for customers to do just that. Aereo maintains small antennae (pictured), each of which was rented to one of its customers. Through a web-based interface that Aereo provides, the customer decided which programs to watch or record through their “personal” antenna. The programming would then be streamed over the Internet to the customer’s computer or other web-enabled device.aereo_antenna_array1

Aereo claimed that all they were doing was offering a convenience for customers that played within the established rules. Instead of customers having to install an antenna at their homes, Aereo would maintain an antenna for the customer, and also record whatever show the customer wanted to capture. Later, the customer could “play back” the show over the Internet.

Supreme Court rules otherwise

In the Supreme Court ruling, the majority opinion was written by Justice Stephen G. Breyer, and supported by Justices Roberts, Kennedy, Ginsberg, Sotomayor, and Kagan. Dissenting were Justices Scalia, Thomas, and Alito.

SC_banner_seal2The Supreme Court’s majority opinion was that it really had no choice but to rule against Aereo. Despite Aereo claiming that they were doing for consumers what consumers do all the time for themselves—recording broadcast television so they can watch it when it’s convenient—changes made by Congress to The Copyright Act in 1976 sealed the deal, according to the majority opinion.

Basically, before the 1976 amendment, any “public performance” of copyrighted material was deemed to be protected under copyright law. At the time, broadcasters and other entities (e.g., movie theaters) were said to be “performers”, and they, therefore had to have legal right to display the copyrighted materials.

Viewers were not deemed to be performers, nor curiously were CATV providers, since they merely provided an enhanced way for viewers to receive the public performance of the copyrighted material. Under the old law, Aereo’s service would probably have been deemed legal.

Interestingly, Aereo made it through both a District Court ruling and a reaffirmation of that ruling by the Second Circuit Court. The Supreme Court, however, did not agree with the lower courts, thus the 6-3 ruling.

Whither Aereo now?

In a post on its website, Aereo’s CEO, Chet Kanojia, said that Aereo would, as a result of the Supreme Court decision, “pause our operations temporarily as we consult with the court and map out our next steps.aereo_logo

The spectrum that the broadcasters use to transmit over the air programming belongs to the American public and we believe you should have a right to access that live programming whether your antenna sits on the roof of your home, on top of your television or in the cloud,” wrote Kanojia.

Kanojia points supporters to a website,, where they can sign up for updates.

Meanwhile, Aereo will continue to fight, says Kanojia. “Our journey is far from done.”

What does it mean for cord cutters?

Had Aereo won the ruling, it would have been an important puzzle piece, enabling even more customers to cut the cable cord.

cut-the-cordCurrently, we can stream movies and other video content over the Internet, typically at some cost. Provide us a way to capture local broadcasts and sports either free or at reasonable cost, and we’d be golden.

What Aereo was providing was a reasonably priced service for cord cutters that made watching broadcast TV easier and with more flexibility—that is, we could “timeshift” just as if we were recording the programs ourselves.

Previously in these pages, I’ve predicted the demise of the cable television industry. Cable companies are the single most disliked industry by customers. With cable TV, we pay what feels like an unreasonable cost for 500 channels of content, only a small number of which we actually watch. Monthly cable bills feel like grand theft. And when there aren’t credible alternatives, we feel trapped. It feels monopolistic.

This story, however, is far from over. Creative entrepreneurs will continue to stretch the boundaries to deliver us the content we want at reasonable prices. But it’s clear the Hollywood-Industrial Complex will continue to fight tooth and nail against any business that threatens their choke-hold on the viewing public—you and me.

Stay tuned.

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