Aereo will finally have its day before the Supreme Court on Tuesday as oral arguments will take place in this closely-watched copyright dispute.
ABC and other traditional TV outlets have been squaring off against the Internet startup since 2013 over whether or not the broadcasters are owed retransmission fees for Aereo allowing subscribers to watch network television on their laptops and mobile devices.
What is Aereo?
Since it’s founding in 2012, Aereo – an online tv streaming service – has been saying that they do have the right to charge subscribers $12 a month while not paying broadcasters for the rights to their channels because each subscriber is given a dime-sized antenna. Each antenna is stored by Aereo, which picks up broadcast signals that are sent to their cloud service until a subscriber logs in on their computer.
Jessica Lehrman described the service in plain terms for Morrison Foerster’s Socially Aware:
In case you are not yet familiar with Aereo’s inner workings, the service transmits broadcast television programs to subscribers via the Internet by using miniature antennas. Specifically, Aereo provides each subscriber with a dedicated antenna for the period of time during which the subscriber is using the service. When a subscriber chooses to “Watch” or “Record” a particular television program through the Aereo interface, the Aereo system makes a unique copy of the television program from the broadcast signals received by the antenna and transmits such copy to the subscriber’s Internet-connected device.
Media attorney David Oxenford of the Broadcast Law Blog explains that
the crux of Aereo’s argument is that the consumer is the one making the performance by deciding to use the Aereo service, and by pressing the button on their computer that triggers Aereo’s tiny antennas to pick up the TV signals and transmit them to the consumer, they are making all the decisions about the transmission of the work. Aereo is claiming that the transmission by each individual is a private performance, not a public one. The copyright holder does not have a right to limit private performances of copyrighted works.
Aereo says that over-the-air signals are routed to antennas where they are stored until the subscriber accesses whatever show they want. Asides from claiming that their service is a private performance, Aereo has been arguing that their service functions like a DVR remote before the Second and Tenth Circuit Courts. Consumer-driven transmissions also count as private performances and not subject to copyright.
ABC and the other broadcasters want Aeros to pay up because they strongly believe the transmission is their property, and there are more costs to the programming than just broadcasting it, writes James Stenger of TMT Perspectives.
Why do broadcasters believe they deserve compensation (in addition to what they obtain from ads)? A simple answer is that that they want to be paid because their programming is their property. Second, they argue that programs cost more to make than the advertising revenue provides. Script writers, actors, directors and production crews all need, and deserve to be paid for their work on programs you watch. Thus, according to broadcaster, if they don’t get retrans fees, some of the programs you’re seeing (or others that should come to fruition) won’t be produced.
The traditional broadcasters also view Aereo as operating like a cable provider, which pays for the right to broadcast individual stations and is usually passed on to subscribers.
Outcomes and Impact
Regardless of how the court decides, the verdict will shake up the future of broadcasting, according to Dan Kahn of InsideTechMedia.
Broadcasters argue that Aereo is a parasitic service that jeopardizes ad revenue and retransmission consent fees. Network heads have warned that a decision in favor of Aereo may necessitate a migration of free, over-the-air television to pay services. In contrast, Aereo argues that it merely is providing consumers with a convenient means to do what they can do for themselves and contends that its opponents are seeking to stifle innovation.
Since last year, Fox and other stations have been threatening to become cable only if the courts continue to favor Aereo. This may just be an empty threat on the part of broadcasters because Aereo won in the Second Circuit and continues to operate throughout out the U.S. without much change from broadcasters.
But a decision by the Supreme Court doesn’t just affect Aereo and broadcasters, but also consumers, according to Patrick Maines of The Media Institute.
The importance of this case is not just whether broadcasters can derive revenue for their programs from third-party Internet distributors. The importance is in what it will tell us about the future of all the content industries and of copyright itself. … But if Aereo, or any company, can escape paying copyright fees simply by creating a service that turns on a technological sham like Aereo’s, it’s not just content producers that will suffer; it’s the content-consuming public and copyright law generally.
A decision isn’t likely to come until the end of the Supreme Court term in June, but at least it won’t be a tie because Justice Samuel Alito will not be recused.