Broadcasters Warn Aereo Threatens Free TV

Calling Aereo a “direct assault” on the broadcast industry's business model, a coalition of TV companies indicated in court papers that Aereo's continued existence could mean the end of free over-the-air television.

“Aereo has built an entire business around the unauthorized exploitation of broadcasters’ copyrighted content,” broadcasters said this week. “It seeks to siphon off cable and satellite subscribers by offering this content for a lower fee, which it can do only because, unlike its competitors, Aereo does not compensate copyright owners for its use.”

The broadcasters add that they partially finance programs through retransmission fees and might “be forced to reconsider” free television unless Aereo is shut down.

Aereo, a startup backed by Barry Diller, offers paying subscribers the ability to stream television shows to iPhones, iPads and other devices. The company says it doesn't need a license to do so, due to its architecture, which relies on thousands of dime-size antennas to capture over-the-air signals and stream them to users. Aereo argues that the streams are “private” -- and therefore don't require licenses -- because they're made on an antenna-to-user basis.

But the TV broadcasters say that the streams are “public performances,” which require licenses. They argue that the company's “simultaneous retransmission of 'live TV' to paying strangers is no more private than the live retransmissions of cable and satellite companies,” the broadcasters argue in their Supreme Court papers.

The TV broadcasters contend that Aereo's arguments “are irreconcilable” with copyright law. “The Copyright Act does not tolerate business models premised on the unauthorized exploitation of the copyrighted works of others,” the networks argue. “Aereo’s massive, for-profit scheme for exploiting petitioners’ public performance rights is no exception.”

Aereo launched in New York in 2012 before rolling out to other major markets in much of the country. Broadcasters sued in federal courts in New York, Boston and Utah. Judges in New York and Boston sided with Aereo, but last week a judge in Utah ordered the company to stop operating in six Western states.

The Supreme Court agreed to hear broadcasters' appeal of a pro-Aereo ruling issued by the 2nd Circuit Court of Appeals. That case is slated for argument on April 22



5 comments about "Broadcasters Warn Aereo Threatens Free TV".
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  1. J S from Ideal Living Media, February 25, 2014 at 6:07 p.m.

    The broadcasters' arguments are nearly as invalid as those they made during the "Betamax" case, and for similar reasons.

    Everyone knows: Eventually, cable companies will primarily be Internet providers; all networks will eventually be streamed online; the goal isn't really to avoid "piracy," it's to "be everywhere" -- to become ubiquitous.

    Someday, those networks will have to foot the bill for streaming to several hundred million online-only viewers. They will curse those before them who prevented companies like Aereo from shouldering the costs on their behalf -- costs which will far exceed the rebroadcast licence fees -- for free.

    Many rural counties (e.g., San Bernadino, rural central Utah, etc.) re-broadcast network signals at the counties' expense. There is no licensing for these rebroadcasts. And for decades, these efforts have only brought in more money, advertisers, and (most importantly) viewers to the networks and their affiliates.

    And that's why the broadcasters' arguments are invalid. Entire new revenue streams (as in the days before video rentals) are possible, and their "Fear of the New" is all that prevents them from realizing them.

  2. Charles Azar from instant replay, February 26, 2014 at 12:04 a.m.

    Imagine the future when the cable networks will pay Aereo to stream their programs to gain new subscribers. And what about the HBOs of the world who will do the same. No antenna here just a new method of distribution. And what about the broadcasters using using those additional channels they got for free with the advent of digital tv using them for distribution of "cable" channels... Imagine.. Technology just keeps moving forward. Just like kerosene replaced expensive whale oil for lighting and cheap wired electricity replaced kerosene and now LEDs and batteries replaced wired electricity, technology create new business models. Broadcasters embrace the new or else die.

  3. Edmund Singleton from Winstion Communications, February 26, 2014 at 6:58 a.m.

    There are some in the television industry would have been better off staying back the good old days of black and white TV, when they knew how the play the, not so much...

  4. Peter Benjamin from MyOffices, February 26, 2014 at 4:45 p.m.

    The writing is on the walls. As the networks try to leverage the costs of the retransmission fees from the cable companies higher they open a can of worms for themselves. If they charge $2 per sub then they open the door for Aereo to hand them a check and call it a day. This now makes Aereo a Cable company overnight & creates a network nightmare when people can opt out of receiving their channels as the niche campaign rises. I can see it now. I will take HBO and ESPN and Fox and you can drop the rest. $19.95. Soon the consumer will want to pay for what they use and that will be the end of tv as we know it. Aereo should win due to the nature of the digital transition act.

  5. Paul Robinson from Viridian Development Corporation, February 26, 2014 at 6:24 p.m.

    It won't be $2 per subscriber, only CNN can get that kind of rate, it will be more like what the Weather Channel, which gets about 14c per subscriber. When you take Dish Network they charge about $5 of your subscription to cover local licensing, which, if your local area has 8 stations means the absolute maximum would be 50c per subscriber and is probably less.

    AEREO is doing the exact thing with an antenna that Rent-A-Center does with TV sets; rent individual subscribers the means to watch TV privately. Or what AEREO is doing by rental is what Radio Shack does by sale, give a particular user access to an antenna. Since Aereo uses individual antennas to deliver one video stream to one user, it is not a public performance. The DVR issue was settled by the U.S. Supreme Court in the Betamax case (Universal Studios v. Sony) Would the networks try to argue this if it consisted of me leasing a wire to a building with an antenna? There's no "irreparable harm" to broadcasters except to their wallet and being able to collect additional fees beyond advertising, and their argument is specious.

    If they can get the ruling upheld, it's grounds to go after anyone who sells or rents TVs or Antennas to make them pay as well. Bus stations have had coin-operated TVs for decades, and I do not believe they require a license either. I can't see where there's a difference between Rat Shack and Aereo exept RS sells antennas and Aereo rents them.

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