Aereo's Plan B: Fine, We're a Cable Provider
The streaming TV startup that lost against big broadcasters in the Supreme Court is still not giving up. It's giving in. Well, sort of. Here's how.
Opinions expressed by Entrepreneur contributors are their own.
So much for not having a Plan B.
Aereo, the scrappy streaming TV startup that went up against big broadcast TV in the U.S. Supreme Court two weeks ago and miserably lost, now fancies itself a cable provider. In the company's latest fight for survival, it's abandoning its long-held claim that it's merely an equipment provider.
In a letter filed yesterday in U.S. District Court in New York, the company pulled a total 180, arguing that, now that the Supreme Court has deemed its service "for all practical purposes a traditional cable system," it should be allowed to operate like one.
If Aereo wins this time, it would have to suck it up and pay the very local broadcast TV licensing fees it skirted since day one. Not exactly ideal, but better than completely going under.
Maybe Aereo didn't convince enough of its subscribers to fight for what it says is their right to use a cloud-based antenna to snatch broadcast programming out of the air, perhaps not as quickly as it had hoped to.
"The Supreme Court's holding that Aereo is a cable system under the Copyright Act is significant because, as a cable system, Aereo is now entitled to the benefits of the copyright statutory license pursuant to the Copyright Act," reads Aereo's letter to Judge Alison Nathan, who previously ruled in the company's favor. "Aereo is proceeding to file the necessary statements of account and royalty fees."
Of course the broadcast giants aren't going for it. No surprise there.
"Whatever Aereo may say about its rationale for raising it now, it is astonishing for Aereo to contend the Supreme Court's decision automatically transformed Aereo into a "cable system' under the law," the broadcasters said in a letter jointly filed with Aereo to the court.
In a statement titled "Our Path Forward" emailed to the media and Aereo subscribers today, Kanojia reiterated that he's still not throwing in the towel.
"This has been a challenging journey for our team, but your support has continued to lift and propel us forward," he said. "We remain committed to building great technologies that create real, meaningful alternatives for consumers."
So what happens if Aereo's cable classification Plan B doesn't pan out? Do Expect a Plan C, perhaps one that could involve letting subscribers playback TV programs after they air. Don't expect Kanojia to shout from the media mountaintops this time that he doesn't have a backup plan. Make that a backup, backup plan, as TechCrunch's Cat Zakrzewski put it.
Before it's devastating Supreme Court loss, the New York City upstart ran a small army of tiny antennas in 11 U.S. cities that collected TV signals. An Aereo customer essentially leased the use of an antenna and could then watch and record live broadcast television online via a cloud-based DVR for $8 to $12 per month.
Aereo paused it service on June 28, though it hasn't officially shut down yet. Meanwhile, as pointed out in its letter to Judge Nathan, the upstart continues to sputter along, earning nothing and "continuing to incur enormous costs such as employee salaries, equipment and lease payments, and vendor payments."
Here is the complete letter to the lower court by both parties.