Supreme Court Cuts The Cord On Aereo

Aereo is a New York-based startup that charges its customers just $8-12 per month to watch streamed live network TV over the Internet.
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Supreme Court Cuts The Cord On Aereo

In closing a tiny loophole, the Supreme Court just dealt a major blow to cord-cutters everywhere. 

"The real live TV we know and love, it's not on Internet — until now. A new platform for bringing live TV to the Internet." (Via Aereo

Aereo is a New York-based startup that charges its customers just $8-12 per month to watch streamed live network TV over the Internet — a good deal less than your average cable bill. The issue before the top court was essentially whether Aereo was a cable company or just an antenna provider. 

If you're not familiar with Aereo, here's how it works. Each subscriber is assigned their own antenna — much like a home antenna, except these are dime-sized and are among hundreds of thousands stored in an Aereo warehouse. Those antennas pick up over-the-air television signals, which are streamed onto the subscriber's computer, smartphone or other device. Aereo does this without paying retransmission fees.

It should come as no surprise that major broadcasters — including CBS, ABC and Fox — weren't on board with this. They filed a lawsuit claiming Aereo was essentially stealing their copyrighted programming. (Via The Verge

But Aereo argued its customers have a right to these over-the-air signals. The Los Angeles Times quotes Aereo's CEO saying, "It's no different than if I'm at home, and I have an antenna or rabbit ears on my TV, and I know what channels I can get." 

But the Supreme Court disagreed. In a 6-3 ruling, the court said even though Aereo legally captures its programming, it violates copyright law when it rebroadcasts it.

This means if Aereo wants to continue business as usual, it's probably going to have to start paying licensing fees to broadcasters like cable companies do. But NBC's justice correspondent Pete Williams explains why Wednesday's ruling might be the last you hear of Aereo. 

WILLIAMS: "In essence, this is a death note for Aereo because the company itself said if it didn't prevail on this legal theory, it would probably fold. This probably kills Aereo, basically, in the crib." (Via MSNBC)

It's worth noting the court's ruling doesn't apply to future technologies, especially cloud-based companies. Still, Gizmodo calls the court's decision "a crushing blow to one of the most exciting technologies we have."

In case there was any doubt the ruling spelled good news for the big media companies, shares for major broadcasters were up Wednesday after the news.