Supreme Disappointment

Hard to write these words after days of sobbing. Pity wretched Chet Kanojia and his martyred Aereo, a hapless victim of an out-of-touch Supreme Court that seems to think property rights and “honesty” are more important than digital progress.  Here the justices were, face to face with a heroic innovator, a modern-day Robin Hood, and what do they do? Beat him down, that’s what.

Writing for the majority, Chief Justice John Roberts opined: “Dude, we don’t mind if you steal from the rich. But we’re sure as hell not gonna let you sell it to the poor.”

You probably know the situation. Big Broadcast and Big Cable, sheriffs of Nottingham if ever there were any, got all up on their high horse just because Aereo was capturing local broadcast signals and streaming them online to subscribers. Now obviously, that’s exactly what your cable company does -- but cable pays broadcasters cash money per subscriber in retransmission fees, which it then passes on to you, the consumer, plus a healthy gouge-up. In the 11 cities where Aereo had set up shop, selling its service to cord-cutters for about $8 a month, broadcasters were getting stiffed and cable was being undersold.

So they all screamed “copyright theft!”

Whereupon Aereo furnished a perfectly simple explanation: they weren’t retransmitting anything. See, they didn’t use a big honking antenna to scoop up all the broadcast signals and pass them along to subscribers. No! Not that at all. They deployed thousands of micro-antennas and organized a data network that at any given moment assigned one tiny antenna per subscriber. The broadcast signals would be fed to those subscribers, yes -- but that was none of Aereo’s business.

They were just an antenna-rental outfit, duh.

Here was an exchange I had with Kanojia on my radio show.

Me:  Now, far be it from me to take the side of the cable companies who've been gouging consumers for decades. But it still seems to me you're exploiting a legal loophole to distribute stuff that just doesn't belong to you. Why am I, suddenly for the first time in my life, sympathizing with big cable?

Kanoja:  The question I would ask is do you think Radio Shack should be paying retransmission fees because they sell antennas? Do you think Sony, that has made billions of dollars selling televisions with tuners, should be paying big retransmission fees? Aereo is a technology company that just does the same things that Radio Shack and Sony do, slightly differently.

He believes that because the broadcast signal travels over public airwaves, we have the right as individual citizens to harvest them, exactly as we have the right as taxpayers to stop trucks traveling over public highways and hijack their contents. 

Up until this week, federal courts accepted that very rationale, but SCOTUS came to notice a tired old analog concept of “right and wrong.” Robin Hoods don’t get to be Robin Hoods, however, by simply bowing to The Man. Even as he shut down his service, Kanojia was defiant: “We are disappointed in the outcome, but our work is not done. We will continue to fight for our consumers and fight to create innovative technologies that have a meaningful and positive impact on our world.”

Kanojia’s chief investor, Barry Diller, is less resolute. He has pulled the plug and will most likely return to traditional analog way of squandering money by investing in Tina Brown’s latest project, Vaudeville magazine.

The question is: whither the technology? Clearly the business models and techo-infrastructure of both broadcast and cable are obsolete. Clearly change is in the airwaves. The Supreme Court is simply too calcified to understand.

Strange. I had lately been kind of optimistic about the high court. Five visionary justices had the wisdom to understand that money equals speech, as articulated in Citizen’s United. In this case, how did they fail to grasp technology’s evolving Assange Ethic: 

“If it is possible, it must be good.”

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21 comments about "Supreme Disappointment".
  1. Edmund Singleton from Winstion Communications , June 30, 2014 at 8:18 a.m.
    Moss is growing on the 'understanding of technology' that the Supreme Court is and has been using for years. The court understood mobile use and security because they use the technology every day, but television is new to them in the real world that is lived in by most Americans with little or no extra money to spend on entertainment...
  2. Ron Stitt from Fox Television Stations , June 30, 2014 at 9:41 a.m.
    Aereo's platform was a legal contrivance, not a technological innovation. You won't see their technology ("thousands of tiny antennas") again in any other business model because it serves no useful purpose other than to exploit what they perceived to be a loophole in the law - one that is now closed.
  3. Edmund Singleton from Winstion Communications , June 30, 2014 at 9:46 a.m.
    Think of Aereo not as technology but an idea who's time has come...
  4. Ed Papazian from Media Dynamics , June 30, 2014 at 9:49 a.m.
    I have to agree with Ron. Aereo was trying to sell the intellectual property of someone else without paying for that right. The technological "innovation" wasn't the real issue. It's unfair to label the Supreme Court as a bunch of dodos, stuck in the distant past, as some are trying to do.
  5. Edmund Singleton from Winstion Communications , June 30, 2014 at 9:56 a.m.
    And how much do/did the broadcasters pay to operate in the public domain?
  6. Paula Lynn from Who Else Unlimited , June 30, 2014 at 10:10 a.m.
    Then we come back to intellectual property. You bought a piece of wood or even found it in a public woods on the ground. You used your intellect and talent and made a wood thing. You designed it and carved it and you own it, your property Now you sell it and get money for it. Do you still get rent money for it ? You have an idea and let's say a business plan to go with it. The business is working. You sell it and get money for it. Do you still get money after the sale ? People work and get paid for that work including finding an idea that makes their job easier or not.They get paid for that day's work. Do they keep getting paid for the job they already did ? Do you keep selling the same thing over and over again ? DO the people who bought care other people own the same thing you bought ? Rentals ? Shares ? Can your stock share be sold to someone else ? There is more to intellectual property than it seems so easy. Then there is the court.
  7. Edmund Singleton from Winstion Communications , June 30, 2014 at 10:17 a.m.
    There is a lot of content in the public domain that can be had for free, broadcaster can and do display that content and still make money doing it, did I say free content, yes I did...
  8. Kevin Barry from Barry Marketing & Media , June 30, 2014 at 11:15 a.m.
    So SCOTUS shot down Aereo's right to sell the public a package of broadcast stations for $8 and to compensate the producers of his product $0. Was the "idea whose time had come" the fact that it cost $8, or was it that you could offer a package of broadcast programming over the Internet to many devices? I don't think "$8" is a big idea. But a skinny basic package? Maybe. How's this for a big idea? Aereo (or someone else) pays the stations for the product they want to package and resell at a profit to consumers. Then charge the public and see if you can come up with a price they'll like. Of course, it's easier to be profitable when your cost of goods is $0, but give it a shot. Can you make a business compensating content producers fairly and charging the public, say, $20?
  9. Edmund Singleton from Winstion Communications , June 30, 2014 at 11:23 a.m.
    There currently is a kid down the street who will be able to show you how it can be done...
  10. Ed Papazian from Media Dynamics Inc , June 30, 2014 at 12:14 p.m.
    Edmund, I'd be interested to know what kinds of public domain content you are referring to-----that people would pay a meaningful amount to a business for giving them access to it.
  11. Christopher Blair from SynCom Media Group, Inc. , June 30, 2014 at 4:31 p.m.
    I'm a LPTV broadcaster so I don't have any sympathy for the Full Power guys but to me it was still a matter of taking something for nothing and selling it for a profit, plain and simple. Rarely is anything "free". In my opinion, they were a streaming "cable provider", MVPD or whatever else you may want to call them. As a LPTV broadcaster i also take advantage of public domain programming and good luck to anyone that can make a living off packaging and selling it; the fellow ranting about "free" is delusional and in need of assistance.
  12. Marcelo Salup from MS Group LLC , June 30, 2014 at 5:37 p.m.
    Bob, with all due respect. You are wrong. Utterly, completely, unequivocally wrong. Never mind me as a strategic planner and media director... I sell those services, the copyright for all the work resides with the client who pays. As a photographer (you can check me out at www.salup.com) I am a content producer. It is my content, my work, I own it and just because you can repost it doesn't mean you own it or can sell it. Period. The mark of the 21st century is our entry into the fourth economy. We already went through agriculture, production, services and now enter the era of content. For me, my photographs are as real a product as, say, a chair. If I sell you a chair and you decide to resell it, it's fine. Go ahead, knock yourself out. If you grab my chair and do not pay me and resell the chair, you are not a pioneer of 21st Century thinking... you are a common thief.
  13. Bob Garfield from MediaPost , June 30, 2014 at 5:45 p.m.
    Marcelo, Dude...irony. Irony. Bob
  14. Marcelo Salup from MS Group LLC , June 30, 2014 at 8:43 p.m.
    Bob. Don't do stand up.
  15. Edmund Singleton from Winstion Communications , July 1, 2014 at 4:05 a.m.
    The Wizard of Oz, the 1939 film is in the public domain, every year it is broadcast by a profit making entity...
  16. Kevin Horne from Lairig Marketing , July 1, 2014 at 12:33 p.m.
    "Whither the technology? ...The Supreme Court is simply too calcified to understand." Unless that was an "ironic" statement also - we should expect 85-year-old judges to provide Silicon Valley & Alley a technology roadmap? Stick to advertising,,,,
  17. David Scardino from Independant Media Consulting , July 1, 2014 at 5:14 p.m.
    According to the New Media Rights website, the underlying novel, "The Wizard of Oz," is in the public domain; the 1939 MGM film is not. Amazing that so many who comment miss the point about copyright.
  18. Edmund Singleton from Winstion Communications , July 2, 2014 at 6:04 a.m.
    I regret that my research error...however, I did find that Its A Wonderful Life is in the public domain, is shown every year, gets high ratings and makes money for anyone that broadcasts it...
  19. David Scardino from Independant Media Consulting , July 2, 2014 at 12:48 p.m.
    Not to prolong the agony, but according to several websites, including film-center.com, NBC currently holds the broadcast copyright for "It's A Wonderful Life," hence any other broadcast entity seeking to air the film would have to pay a royalty, ego the film, at least for broadcast, is not in the public domain.
  20. John Parikhal from joint communications , July 6, 2014 at 7:24 p.m.
    The HUGE elephant slouching around in the room is this - the 'broadcast' television companies have licenses granted by the government. They don't pay for them but they have decided they own them. By increasing the reach of broadcast signals, Aereo increases their audience which means they earn MORE money from advertisers. They should be kissing Aereo's butt. But the broadcasters have cowed the cable operators (who also increase the audience of these 'public' signals), donated to the right politicians, and thrown sand in the eyes of logic. If they weren't being disingenuous, they would share ad revenue with ANYONE who re-transmitted them. Shame on the media who don't even talk about this.
  21. Edmund Singleton from Winstion Communications , July 7, 2014 at 7:17 a.m.
    Wow, again I regret my error, the site used for research will not be relied on again, a site I dare not mention as not increase its use. To be learned, the internet can be used for information that has not been tested and trusted a lot of the time...