By Dennis Anderson, Katja Schroeder, Robert Wu
Social media was a buzz in July about the World Cup events. The final game between Germany and Brazil was the most-tweeted sports event with 35.6 million tweets [1]. Where to watch the games and what countries’ teams were playing were among the different topics trending through various social media channels. Many had simply planned to watch the games using their mobile devices through a platform known as Aereo. Subscribers pay a fee in exchange for almost real-time cable content streamed to their Internet-connected device. However, many of those subscribers who had planned to use Aereo to watch the games were largely left in the lurch, as service was abruptly suspended on June 28, 2014 in response to the U.S. Supreme Court’s decision in American Broadcasting Cos., Inc. v. Aereo, Inc.[2]. In that ruling, six Justices of the Court agreed the nature of Aereo’s streaming video service infringed upon the copyrights of television broadcasting companies.
In the Aereo decision [3], a primary issue before the Court was whether the Aereo’s services constituted a public performance under The Copyright Act of 1976 [4] by transmitting broadcast television content to its subscribers, thereby infringing upon the copyrights held by the broadcasting companies. In rejecting a line of cases [5] holding that transmitting services, like Aereo’s community antenna television (CATV) systems predecessors, did not “perform” within the meaning of the law, the Court instead reasoned the 1976 amendments to The Copyright Act were specifically intended to bring services like Aereo’s within its purview. Justice Breyer and the Court’s majority concluded Aereo does indeed “perform” within the meaning of the statute. Moreover, the Court concluded Aereo performs “publicly” when it transmits broadcast content to its subscribers. The fact that Aereo sent copies of content to individual subscribers did not matter, because “[o]ne can sing a song to his family, whether he sings the same song one-on-one or in front of all together.” [6].
However, even in light of the Court’s decision concerning Aereo, there may still be changes affecting how the public receives broadcast content, and changes to protection of the copyrights for broadcasted content. The Court ruling stated Aereo was “substantially similar” to a cable system and that Aereo needs broadcasters’ permission to air their content. This gave Aereo the ammunition to fight back, arguing it should be able to qualify for a “compulsory license” to broadcast content as a “cable company.” Another court ruling that qualifies Aereo for a compulsory copyright license would set in motion a dramatic change in how television, among other content, will be distributed online.
As Aereo would need to pay limited royalties for the rights to broadcast content for copyrights, it would change the company’s business model, and presumably the subscription prices. This decision impacts all startups built on the same business model of rebroadcasting over-the-air TV contents.
In addition to the battle in court, Aereo is turning to consumers to speak up and demand their right to access programming through a cloud-based antenna. In an open letter to its customers Aereo’s CEO Chet Kanojia wrote: “We believe you should have a right to access that live programming whether your antenna sits on the roof of your home, on top of your television or in the cloud.” To rally consumer support, the company set up a website—ProtectMyAntenna.org—with background information about their case. Visitors are encouraged to notify legislators and use social media to voice their opinion.
It is clear there is no free lunch especially when someone else is spending millions dollars to create the contents and an entire advertisement ecosystem is built around it. The Court has spoken. It’s time to move on.
[1] Reisinger, D. World Cup’s Germany-Brazil game is most-tweeted sports event. CNET. July 9, 2014.