Aereo: What happens next?

aereo-what-happens-next
Aereo C.E.O. Chet Kanojia. (AP Photo/Mark Lennihan)
Tweet Share on Facebook Share on Tumblr Print

Alex Weprin

Follow: feed

With its ruling this morning, the U.S. Supreme Court is effectively killing Aereo as it currently exists. The service may not die altogether, as the technology it has built is still very valuable, but the current incarnation of Aereo is dead.

Barry Diller, Aereo's primary investor, acknowledged as much in a statement released to be reporters after the decision was handed down.

“It’s not a big (financial) loss for us, but I do believe blocking this technology is a big loss for consumers, and beyond that I only salute Chet Kanojia and his band of Aereo’lers for fighting the good fight,” said Diller in the statement.

Aereo C.E.O. Chet Kanojia suggested in a statement of his own that the company wasn't shutting down just yet, but didn't discuss any possible new business plan. Kanojia said Justice Scalia's dissent "gets it right," while arguing that the majority opinion will have significant effects on the technology marketplace.

MORE ON CAPITAL

ADVERTISEMENT

“Today’s decision by the United States Supreme Court is a massive setback for the American consumer," Kanijia said in his statement. "This sends a chilling message to the technology industry. It is troubling that the Court states in its decision that, ‘to the extent commercial actors or other interested entities may be concerned with the relationship between the development and use of such technologies and the Copyright Act, they are of course free to seek action from Congress.’ (Majority, page 17) That begs the question: Are we moving towards a permission-based system for technology innovation?"

"Time will tell how Aereo responds," says Bea Swedlow, a partner in the I.P. litigation group at Honigman Miller Schwartz and Cohn LLP. "The writing was on the wall after oral argument, so Aereo likely has a contingency plan in place."

Aereo could survive by licensing its technology to media companies looking for an effective way to transmit video over the Internet to customers, though that would require that it work alongside the companies it has been engaged in long, expensive legal battles with. In the end, without the service it provides, Aereo's most valuable asset is its technology. Perhaps the tiny antennae could be sold to consumers, who can keep them in their homes, linking to a remote DVR, à la Cablevision (see below). Or maybe Aereo can just license its very effective video-streaming technology to other companies that have not been as auccesful in that field.

Cablevision, the New York-based cable company, found itself in the middle of the Aereo debate. Its "Cloud DVR" service was found to be legal by a lower court, but the networks, in making the case against Aereo, proposed a solution that would make Cablevision's service illegal as well. The Court made a narrow ruling that isn't expected to affect Cablevision.

“We have not considered whether the public performance right is infringed when the user of a service pays primarily for something other than the transmission of copyrighted works, such as the remote storage of content,” wrote Justice Breyer in the majority opinion.

“We are gratified that the Court’s decision adopted a sensible middle ground, holding that unlicensed retransmission services like Aereo violate the copyright law, while protecting consumer-friendly, cloud-based technologies, such as RS-DVR," said a Cablevision spokesperson in a statement.

In his dissent, Justice Scalia suggested that the court's ruling still left open the possibility of havoc coming to fruition in the cloud computing industry.

"The Court vows that its ruling will not affect cloud-storage providers and cable-television systems..but it cannot deliver on that promise given the imprecision of its result-driven rule."

Meanwhile, the TV networks are, suffice it to say, very happy with the ruling.

“We’re gratified the Court upheld important Copyright principles that help ensure that the high-quality creative content consumers expect and demand is protected and incentivized,” reads an ABC statement

“Justice was served, we expected to win, but it certainly feels good to win as decisively as we did,” said CBS C.E.O. Les Moonves, talking to Bloomberg TV’s Trish Regan. “What Aereo was doing was not about technology, it was about theft.”

Here is what others had to say on the matter:

The Hollywood Reporter's Eriq Gardner: http://bit.ly/1nGqMpY

Re/Code's peter Kafka: http://on.recode.net/VnHAeO

The Wall Street Journal's Keach Hagey: http://on.wsj.com/1qJ9kHB

The Verge's Jacob Kastrenakes: http://bit.ly/1ryiLqT

The New York Times' Adam Liptak and Emily Steel: http://nyti.ms/1lTxf55

Broadcasting & Cable's John Eggerton: http://bit.ly/1lPEA43