U.S. Supreme Court Rejects Aereo TV

25 Jun, 2014 By: Erik Gruenwedel

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Ruling is a big win for media companies and possible end for the subscription streaming TV service

The fate of Aereo TV has been turned on its head after the U.S. Supreme Court June 25 ruled against the subscription streaming TV service in a 6-3 vote. The court said Aereo operated as multichannel video distributor and not as an equipment provider.

The decision reverses a lower court ruling that, similar to previous rulings, had sided in favor of Aereo TV saying it did not violate intellectual copyrights or retransmission agreements.

Aereo, which enabled subscribers to access over-the-air digital signals of live local TV broadcasts via a cloud-based antenna platform, called the decision a setback for the consumer.

"This sends a chilling message to the technology industry," Aereo founder and CEO Chet Kanojia said in a statement. "Are we moving toward a permission-based system for technology innovation?"

Robin Flynn, research director at SNL Kagan, said the court decision protects the billions of dollars networks have invested in programming content, technology and infrastructure.

"It does not stifle multichannel operators' continued strategic imperative to deliver licensed video content to consumers over multiple devices at the time of consumers' choosing, with the goal of responding to how their subscribers prefer to watch video today. Innovation will no doubt continue in the video space," Flynn said in a statement.

The Walt Disney Co., whose ABC TV unit was among the plaintiffs, hailed the decision as a win for broadcasters.

“We’re gratified the court upheld important copyright principles that help ensure that the high-quality creative content consumers expect and demand is protected and incentivized," Disney said in a statement.

In April, media executive Barry Diller, who is a major investor in Aereo, said a reverse decision by the Supreme Court would probably result in the service shutting down.

Indeed, Les Moonves, the outspoken CEO of CBS, had warned that an Aereo win in the top court could lead the broadcaster to consider reverting to a pay-TV business model.

In a statement, Moonves said, "We are pleased with today's decision, which is great news for content creators and their audiences."

 

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