Aereo Loses Supreme Court Case, Streaming TV Service Deemed Illegal
Aereo is history. There is no Plan B. It’s over. The broadcast TV goliaths have won.
In a “sweeping and definitive” 6-3 decision, the Supreme Court has ruled that Aereo is illegal.
The Court deemed that the disruptive streaming TV startup is indeed breaking the 1976 Copyright Act by allowing its cord-cutting subscribers to snatch broadcast signals from the air and watch them online with its micro antenna technology.
This is a huge victory for broadcast TV’s Big Four (ABC, CBS, NBC and Fox), along with Comcast Corp. and Walt Disney Co., who claimed the New York City-based company violated U.S. copyright law by streaming their copyrighted content to its customers without paying a cent in licensing fees for it.
Aereo contended that it wasn’t in the business of selling TV content, saying it’s merely an equipment provider. The company’s innovative dime-sized antennas on warehouse rooftops in 11 U.S. cities grab TV signals out of the air, then deliver them to customers online for $8 to $12 per month.
The Court disagreed, arguing that because Aereo "performs petitioners work publicly," it acts as a cable company. “Behind-the-scenes technological differences do not distinguish Aereo’s system from cable systems,” Justice Stephen Breyer said in the ruling.
Justices Samuel Alito, Antonin Scalia and Clarence Thomas dissented, saying that “Aereo does not ‘perform’ at all.”
Chet Kanojia, Aereo’s founder and CEO, recently told Entrepreneur.com he had no back-up plan in the event the Supreme Court ruled against his company. “No, not really. Not really, we don’t have a plan for that,” he said.
But in response to the Supreme Court’s disappointing death blow to his company today, Kanojia changed his tune. He said his work is not done. “We will continue to fight for our consumers and fight to create innovative technologies that have a meaningful and positive impact on our world.”
Consumer access to free-to-air broadcast television is an essential part of our country’s fabric. http://t.co/Dr4IWzlxnr— Aereo (@Aereo) June 25, 2014
Meanwhile, media mogul Barry Diller, a top Aereo investor, seems more resigned to defeat. “We did try, but it’s over now,” he said on CNBC this morning.
Kanojia called the decision “a massive setback for the American consumer” and said that it sends “a chilling message to the technology industry.”
While the Court vowed in its ruling that its decision will not impact cloud-storage services and cable TV systems, Kanojia pointed out that Justice Scalia essentially stated the opposite, saying that the court “cannot deliver on the promise given the imprecision of its results-driven rule.”
Here’s the complete text of the 34-page decision.