Commentary

Despite Court Battles, Aereo Attracts $34M From Investors

Aereo's courtroom battles with TV broadcasters don't seem to be discouraging investors. The Barry Diller-backed Internet television service said this week that it has received an infusion of $34 million, which it plans to use to open in 15 new markets.

Already, the company offers its $8 a month streaming service in 10 cities, including New York, Boston, Miami and  Salt Lake City. Aereo allows paying subscribers to stream over-the-air TV shows to iPhones, iPads, Androids and other devices. Aereo also allows people to “record” shows for future viewing.

“Consumers are craving choice and options and as a result, we continue to see explosive growth across all our markets,” Aereo said in a statement about the new funding round.

But if consumers like Aereo, TV broadcasters aren't as enthusiastic. The major broadcasters have sued the service in New York, Boston and Salt Lake City. Broadcasters also have sued the rival service FilmOn X (formerly Aereokiller) in Washington, D.C. and Los Angeles; FilmOn X itself brought a preemptive lawsuit in Illinois.

The broadcasters say that Aereo (and FilmOn X) infringe copyright by transmitting programs without licenses.

Both companies say they use antennas to capture over-the-air broadcasts and stream them to consumers. The companies argue that the streams are legal, pointing out that consumers are already allowed to watch over-the-air TV with antennas and record shows for later viewing.

The companies also make a more technical argument: They say the streams are “private” performances, which don't require licenses, because each stream is made on an antenna-to-user basis.

Judges in New York and Boston so far have sided with Aereo in court, but judges in Washington and Los Angeles have ruled against FilmOn X -- even though the companies reportedly use the same technology.

The differing rulings are creating a mess for Aereo, which will be on shaky ground if it launches in locales where judges have ruled against FilmOn X. At the same time, TV broadcasters have indicated that they will continue to bring new cases against Aereo as it opens in new markets, meaning that Aereo can expect its legal bills to grow as it expands.

Given the conflicting rulings, broadcasters and Aereo have asked the Supreme Court to settle questions about the service's legality. But judges on that court might think a decision is premature -- especially since none of the lawsuits have gone to trial. Instead, the rulings have been about whether to issue injunctions that would prohibit Aereo from operating while the matter is pending in court.

This Friday, Supreme Court judges will discuss among themselves whether to hear the case. If they decline, Aereo likely will continue to expand -- and continue battling it out with broadcasters throughout the country.

1 comment about "Despite Court Battles, Aereo Attracts $34M From Investors".
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  1. Charles Azar from instant replay, January 8, 2014 at 11:58 p.m.

    Aereo will continue to win and the broadcasters should think up a way to join them in some way. Both Aereo and the broadcasters can help each other

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