Chet Kinoja

Asa Mathat

Media


Big news for tech and media: The U.S. Supreme Court says it will take on the Aereo vs. the TV industry case. A decision could come this summer, and could have a significant impact on both the TV industry as well as a crop of Web companies that use the Web to deliver media.

Both Aereo, which delivers broadcast TV shows over the Web but doesn’t pay a license for the programming, and the TV industry have asked the court for a ruling. Here’s a statement from Aereo CEO Chet Kanojia (pictured above):

“We said from the beginning that it was our hope that this case would be decided on the merits and not through a wasteful war of attrition. We look forward to presenting our case to the Supreme Court and we have every confidence that the Court will validate and preserve a consumer’s right to access local over-the-air television with an individual antenna, make a personal recording with a DVR, and watch that recording on a device of their choice.

“This case is critically important not only to Aereo, but to the entire cloud computing and cloud storage industry. The landmark Second Circuit decision in Cablevision provided much needed clarity for the cloud industry and as a result, helped foster massive investment, growth and innovation in the sector. The challenges outlined in the broadcasters’ filing make clear that they are using Aereo as a proxy to attack Cablevision itself and thus, undermine a critical foundation of the cloud computing and storage industry.

“We believe that consumers have a right to use an antenna to access over-the-air television and to make personal recordings of those broadcasts. The broadcasters are asking the Court to deny consumers the ability to use the cloud to access a more modern-day television antenna and DVR. If the broadcasters succeed, the consequences to consumers and the cloud industry are chilling.

“We remain unwavering in our confidence that Aereo’s technology falls squarely within the law and our team will continue to work hard to provide our consumers with best-in-class technology that delights and adds meaningful value to their lives.”

The broadcasters released a statement as well:

“We are pleased the Court has agreed to hear this important case. We are confident the Court will recognize that this has never been about stifling new video distribution technologies, but has always been about stopping a copyright violator who redistributes television programming without permission or compensation.

Aereo pulls down over-the-air broadcast signals and delivers them to its customers for a monthly fee. It argues that it doesn’t need to pay broadcasters for the programming because it is performing the same function as an old-fashioned antenna.

Aereo has won a series of battles in the lower courts, and if the Supreme Court gives it the okay, it could threaten a lucrative revenue stream for TV programmers, who get hefty fees from pay-TV providers to transmit their shows: If Aereo doesn’t have to pay Fox, or ABC, or NBC (which is owned by NBCUniversal, which is an investor in this website) for its shows, then Time Warner Cable or Dish Network might make the same argument.

For now, Aereo only offers broadcast TV shows, which means it has a fairly limited offering, and there’s a good debate about how appealing that is to a mass market. The company is only open for business in New York City and a handful of other markets, though it says it intends to expand widely this year.

Kanojia, who just raised a new round of funding from IAC and other investors including Gordy Crawford, is betting that a court victory will give him the ability to strike programming deals with other providers and allow him to start building a broader Web-based TV service.

Aereo has also gotten legal backing from a Silicon Valley consortium that represents companies including Google, Yahoo, Facebook and Pandora, who have argued that a loss for Aereo could threaten cloud computing in general.

Aereo’s defense, which relies on an earlier court decision that gave Cablevision the right to create a “cloud DVR,” is based on the notion that its users — not the company itself — are the ones pulling down programming over the Web. If the court rules against Aereo, tech firms say that all kinds of Web-based storage and transmission may be at risk.

Here’s the crux of their argument, made last spring via a friend-of-the-court brief:

“Every time a consumer uses the an Internet cloud-based backup system or online storage locker, both the consumer and the company providing that system rely on Cablevision’s clear holding that (1) it is the user – not the provider of that system – who copies the underlying work; and (2) the transmission of that work to that same user in a manner not capable of being received by others is a private performance that infringes no exclusive right of the rights holder in the underlying work.”




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