x
Video services

Aereo Headed for Supreme Court?

The major US broadcast networks are seeking to prove that Aereo is no Cablevision.

In a petition to the Supreme Court late last week, ABC Inc. , CBS Corp. (NYSE: CBS), NBC Universal , and Fox Broadcasting Co. have asked for a ruling that declares Aereo Inc. in violation of copyright law. While the US Second Circuit Court in April agreed with Aereo's argument that it, like Cablevision Systems Corp. (NYSE: CVC), delivers individualized and private performances of network content, broadcasters contend that the transmission of thousands of simultaneous streams is in fact a public performance and therefore illegal without payment of retransmission fees.

The Second Circuit Court's decision last spring was based on an earlier US Supreme Court ruling that found in favor of Cablevision and its remote storage digital video recording (RS-DVR) service. In that landmark 2008 case, the RS-DVR service was deemed legal because subscribers are each given their own copy of a recording that is saved on the cable company's network. Similarly, Aereo, a Web video service backed by former broadcasting mogul Barry Diller, uses an individually assigned antenna for each of its subscribers and delivers custom video streams over the Internet. (See Aereo: Suited Up to Disrupt Pay TV.)

Broadcast networks, however, state in their petition that the Cablevision ruling shouldn't protect Aereo. They claim the company's technology is a "Rube Goldberg-like contrivance" designed to "take advantage of [the] perceived loophole in the law."

Along with the nation's top four broadcast networks, Univision, Telemundo, and PBS also signed the petition to the Supreme Court, as did local broadcast stations WNJU-TV, WNET-TV, and WPIX-TV.

The Aereo case could have major implications for free-to-air networks that now generate a significant portion of their revenue from content licensing fees. SNL Kagan predicts network retransmission fees will top $6 billion by 2018. If Aereo's streaming solution is granted legal status, that revenue could disappear. (See 'Free' TV Model Under Threat.)

Meanwhile, Cablevision itself is less than pleased with the broadcasters' court plea. The cable company fears that a ruling against Aereo could also hurt its own RS-DVR service and other cloud-based TV offerings. As reported by several news outlets, Cablevision said in a statement that "if Aereo ends up prevailing, it will serve the broadcasters right."

But Cablevision also disputes the notion that its RS-DVR case was comparable to Aereo's. In its own legal brief last week, the MSO reportedly argued that its case was different because, unlike Aero, it "pays statutory licensing and retransmission content fees for the content it retransmits."

— Mari Silbey, special to Light Reading Cable

Page 1 / 2   >   >>
wanlord 12/11/2013 | 10:46:10 AM
Aereo Jammers? So this may be a bit off the wall, but what if the big broadcasters set up directional jammers? For example if they locate the Aereo antenna farms, lease some space, or use a vehicle to disrupt the signal specific to their frequency? Since they are licensed to use that frequency, does the FCC prevent them from causing disruption on their own broadcast? If it was done right they could limit the disruption to a well defined area as not to impact valid receivers. Even just enough to screw up Aereo's reception, like introduce static, or alerts, or just the sound. I don't know how this would all technically work, but cause enough issues that Aereo has no quality service therefore no business. I am not advocating this, just wondering if it can be done.
albreznick 10/17/2013 | 5:48:00 PM
Re: Aereo True. But that's a big if. It's not clear how much appeal Aereo actually has. We haven't seen any good numbers for them yet, or even any bad ones. 
mendyk 10/16/2013 | 6:06:28 PM
Re: Aereo Unless Aereo were paying the same retransmission rates as conventional video service providers, I don't see how that works. And if Aereo does pay the same rates, then its value proposition goes away. Taken to the logical conclusion, this looks like it could be the end for conventional broadcast TV, assuming Aereo or something like it can make a business out of this very low end of the market.
albreznick 10/16/2013 | 5:43:50 PM
Re: Aereo OK. So it's not new technology. I grant you that. But is is innovative use of old, or existing, technology. Broadcasters could bring Aereo into the fold by dropping the expensive legal battles in return for a share of Aereo's subscription fees. Then they'd be getting the equivalent of retransmission fees, no?   
albreznick 10/16/2013 | 5:41:07 PM
Re: Aereo OK. So it's not new technology. I grant you that. But is is innovative use of old, or existing, technology. Broadcasters could bring Aereo into the fold by dropping the expensive legal battles in return for a share of Aereo's subscription fees. Then they'd be getting the equivalent of retransmission fees, no?   
albreznick 10/16/2013 | 5:40:07 PM
Re: Aereo OK. So it's not new technology. I grant you that. But is is innovative use of old, or existing, technology. Broadcasters could bring Aereo into the fold by dropping the expensive legal battles in return for a share of Aereo's subscription fees. Then they'd be getting the equivalent of retransmission fees, no?   
albreznick 10/16/2013 | 5:38:35 PM
Re: Aereo OK. So it's not new technology. I grant you that. But is is innovative use of old, or existing, technology. Broadcasters could bring Aereo into the fold by dropping the expensive legal battles in return for a share of Aereo's subscription fees. Then they'd be getting the equivalent of retransmission fees, no?   
mendyk 10/15/2013 | 8:35:16 AM
Re: Aereo I don't remember much fighting between broadcasters and cable ops, except over retransmission fees. With Aereo, I don't see how it gets brought "into the fold" from the broadcaster point of view. There is a natural alliance between video providers and Aereo to some extent (if OTA continues, then retransmission fees would be greatly reduced if not eliminated). Also, it's hard to see Aereo's approach as "innovative technology" -- it's antenna farms with an Internet pipe.
albreznick 10/14/2013 | 7:40:12 PM
Re: Aereo i agree that the broadcast business model is already changing. Broadcasters now make a ton of money on content rretransmission fees, which they are loathe to lose. But I also agree with Sarah that it makes little sense to fight new, innovative technologies in court, especially when you keep losing. Much better to bring Aereo into the fold somehow and work with them, not against them, and make some money together. You'd think the broadcast nets would have learned their lessons from their unsuccessful fights against cable, DVRs, network DVRs, etc. But noooooo!   
mendyk 10/14/2013 | 11:53:38 AM
Re: Aereo Well, in fact, the broadcast business model is changing. Networks are becoming more reliant on per-user carriage fees from video service providers. They are less interested in the "eyeballs" that Aereo might deliver. If Aereo passes the legal hurdles as it appears to be doing, broadcasters could take the nuclear option and shut down over-the-air transmissions. Not sure if that's a positive disruption or not.
Page 1 / 2   >   >>
HOME
Sign In
SEARCH
CLOSE
MORE
CLOSE