In a time of year when the big stakes contest for many is the Superbowl and the NFL’s Richard Sherman seems to have garnered more online buzz than any Seahawk could stuff in its bill, the U.S. Supreme Court has said it would take up a case that holds potential to reshape another game, er, industry — that would be television broadcasting, of course. And it’s worth recapping American Broadcasting Companies Inc. v Aereo Inc. for this very reason of its much publicized significance. Barry Diller, the billionaire entertainment mogul, plays a Sherman-esque role in this matter, upsetting many in the business with his assertion that what his company terms a new technology can take-down some of the soaring costs of content access for Americans weary of a big monthly bill. If you’re keeping score in the legal contest, this also is a case where 2+9 doesn’t add up to 11 but rather a straight path to the high court to resolve conflicts between Aereo-related rulings in the Ninth and Second circuits. Let’s run the game-study tape:
Who are the parties?
Aereo: Chet Kanojia founded Aereo in 2012, with the support of Barry Diller, chairman of InterActive Corp and former co-founder of Fox network. Aereo, which has won plaudits in some creative quarters where big broadcasters aren’t always beloved, says it uses tiny antennas to grab local broadcast stations’ programming. Subscribers then can watch any local stations’ content on their computer, tablet, smartphone or on their TV screen with the help of a Roku or AppleTV device. The Los Angeles Times noted the company’s subscription fee is only $8 per month and the content is streamed through a DVR-like device located at an Aereo facility, “so the programming can also be recorded, rewound, or fast-forwarded.” Aereo defends its technology because consumers can use their own DVR and any TV antenna to accomplish the same thing.
Broadcasters: Major broadcasting companies including ABC, CBS, NBC, Fox, and PBS, as well as organizations like the NFL and MLB, assert Aereo’s technology infringes on their copyrights. The broadcasters create content and they make profits from the retransmission and advertising fees. Aereo’s technology threatens these revenue streams.
Where did the battle begin?
As previously discussed in a blog post on this site, “Cablevision:’ A Meaty Ruling, Sliced Many Ways,” a U.S. District Court in New York held that Aereo’s technology did not violate or infringe broadcaster’s retransmission rights protected under the Copyright Act. Then, U.S. District Judge George W. Wu, of the Ninth Circuit, agreed with broadcasters that their rights were violated by another firm with an Aereo-like technology, AereoKiller (aka “FilmOn X” and Aereo’s competition); he ruled against the use of the antennas system to stream content over the internet to provide content to subscribers, finding it violated broadcasters’ retransmission rights. (See “A Legal Shot Against Aerokiller’s TV Streaming,” for further discussion.)
Why the Supreme Court?
Television broadcasters have pleaded with the U.S. Supreme Court to take up a case to resolve this matter, especially the appellate conflict — which is one way to get the Supremes to weight in, of course. And on Jan. 10 the Court agreed to do so, with The New York Times reporting that CBS says it hopes to see the matter decided in favor of broadcasters and their allies because the network asserts Aereo and similar businesses are “built on stealing the creative content of others.”
Kanojia is also pleased that Aereo will have its day in court and has said he thinks the justices will “validate and preserve a consumer’s right to access local over-the-air television with an individual antenna.”
A Supreme Court decision also could have a huge effect on a string of lawsuits that Aereo expects to face as it rolls out its technology across the nation.
Legal tea leaves
While major sporting events like the Sunday Superbowl spawn endless, mindless fan-directed speculative yarns (How many times will Peyton Manning bark “Omaha!” in his snap count? And how may deep routes will be run against Sherman? And how many subway commuters might there be to this Jersey contest? etc etc), the legal tea leaf readers also are hard at work with reports already about possibly tough sledding for the defendants, based on a court filing; or how the case will be won (hint: this author thinks it will turn on the public or private nature of the “performance,” nee broadcast); or how an appellate court, until the high court issues its holding in Aereo, is delaying a case involving FilmOn X.
How might an Aereo decision change TV as we know it? The soothsayers already see, um, big viewing changes like this or darkness for the so-cloud based technology, storage and computing services, like this. Or maybe Aereo’s approach will be the end of television or it may be an interim step in creating an avenue for content distribution as Betamax did, leading to a whole host of subsequent innovation? Or maybe it will accelerate the option wherein content providers switch from network to cable broadcasting to protect and control their material, as Fox and CBS have threatened to do? Or might a finding of zero retransmission rights’ violations push other broadcasters to embrace the technology as a way of avoiding payment of retransmission fees? (See “For Aereo, Surprising Shifts From TV ‘Bad Guy’” for discussion.)