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.”




5 comments
ScubaGolfJim
ScubaGolfJim

So, I come to this page from NBCNews.com, I have a WordPress banner, to which it clearly says I am signed in, it states that re/code is a CNBC partner site and I still have to create an account specific to re/code to be able to submit a comment? Can't use WordPress, or Newsvine, or the ridiculous other NBC comment program, (which half of doesn't work) Can we say... STUPID? So, yeah. I then signed up here at re/code to say this. Here, I'll say it again... STUPID.

Yes, some fidiot will now like to say I'm the stupid one for signing up, but yeah... I wanted them to know. STUPID. I'll probably never land on this site again. But hey... I got my two-cents worth in. And they're the ones that paid for it. For me it was fun. LOL... and STUPID.

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And Joe, yes, it is interesting on both sides really.

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As for my intentional intended comment, the local stations should be able to include the users of this service in their Nielsen numbers to increase their commercial charge rates.

Joe Curios
Joe Curios

How is Aereo's argument that it is performing the same function of an old-fashioned antenna different than cable companies redistributing the same signal? In other words, are cable companies free to retransmit the signal and avoid paying the networks a fee?


And can this argument be morphed to other industries. For example,can I purchase music, start up a radio company and play music from the CD I purchased all without having to pay artists any royalty?


It seems like a flawed position. Should be interesting to see how it plays out.

hello
hello

In a word, yes. It is free for TimeWarner to give you FOX. But, that is why FOX also created FX, FOX Sports, etc, which are not free and that's why TimeWarner sells those channels to the consumer as a package. If they don't, FOX will cut all it's channels that it created solely for this purpose of leverage.

Can it be morphed? Not really. The reason FOX is free to rebroadcast is because the government gave them the airspace for free in exchange for them not being allowed to charge a rebroadcast fee. Which, as stated above, is why they (ABC, NBC, FOX, etc) created all sorts of new channels and content to fill those channels so they could make more money.

DavidHoffman
DavidHoffman

@Joe Curios  The difference is that the system has those micro antennas and tuners that are suppossed to be under the control of whatever lease holder is using it at a specific time of individual lease. Also the content data is transmitted over the internet using the standard internet data packets, not over a coaxial cable using the standard video signaling system of cable TV providers or through the air using proprietary satellite content transmission codecs. If the technology actually works the way Aereo says it works, and the leases are written correctly, then they are not violating copyright. The service is not about content, it is about providing access to location, antenna, tuner, and DVR through a rental agreement and the internet. It is similar to taking my antenna, tuner, and DVR and putting them in the attic of the tall building next to me. I can then control them through an internet connection, with the correct static IP address and VPN. I may have to pay the tall building owner next to me for the use of electricity and attic space, but he is not acting as a cable TV provider. He is just leasing attic space and electricity.

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