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Aereo’s Supreme Court case could impact the future of TV viewing. The legal battle between television streaming start-up, Aereo, and America’s major broadcasting networks has reached the highest court in the nation, and the verdict in American Broadcasting Companies, Inc. v. Aereo, Inc. could determine the future of television. The case involves the New York-based company that charges a nominal fee of $8 a month to allow its subscribers to watch broadcast television programs on their computer, tablet, or smart phone via the internet.
The Supreme Court of the United States has been hearing the case initiated by several American broadcasters, including CBS, ABC, NBC, and Fox, against Aereo, a company that allows users to watch free-to-air television signals over the internet. It has been billed as a landmark case that could be as important as the 1984 Sony judgement that allowed home video recording of television channels. While the legal arguments appear to be based on differing interpretations of definitions such as public performance, there is also confusion over how Aereo’s system actually works, and specifically, how content is delivered.
Three decades ago, Barry Diller and Rupert Murdoch joined forces and founded the Fox TV network. Today, the two broadcasting moguls are on opposite sides of the legal battle between Aereo and America’s major broadcasting networks. Diller, the current chairman of IAC and Expedia Inc., has vested interests in the internet TV streaming start-up. He is one of Aereo’s co-founders and initial investors. Moreover, IAC has a minority interest in the company. While Murdoch remains CEO and the driving force behind major broadcasting player, Fox TV.
The premise of the American Broadcasting Companies versus Aereo Supreme Court case that could impact the future of TV viewing rests upon interpretation. For decades, American broadcasters have benefited from a sweetheart deal with the U.S. government in which they can use the highly desired, publicly owned airwaves to transmit content for free, as long as they also provide consumers access to the material for free. In turn, the broadcasters have used advertising rather than subscriptions to make a hefty profit. Therefore, individual Americans could opt to use rabbit-ear antennas on top of their TV sets and enjoy local programming free of charge, as opposed to being subjected to potentially costly cable and other media subscriptions.
Americans have already started the seismic shift from expensive cable TV services to more reasonably priced and convenient content streaming services from such media providers as Hulu, Amazon, and Netflix. Aereo, which is a two-year-old company, has attempted to hasten that trend by allowing customers to stream broadcast TV over the internet. From the broadcasters’ perspective, Aereo not only poses another threat to their business model, but it threatens the broadcasters’ revenue stream by cutting out the cable companies, which have paid broadcasters billions of dollars in revenue each year to re-transmit broadcast content to their subscribers.
In response, the major broadcasters have sued Aereo for stealing their content and copyright infringement. A decision for either side could affect how Americans access content and impact future viewing habits both via television, as well as over the internet. If the decision goes Aereo’s way, broadcasters like 21st Century Fox have threatened to remove their content from the public airwaves and move to a subscription model. While a decision against Aereo could redefine the copyright landscape that cloud-based services like Dropbox and Amazon have relied on. Thus, potentially putting in jeopardy a whole generation of new technologies Americans have come to embrace and viewed content on daily.
As the verdict in American Broadcasting Companies, Inc. v. Aereo, Inc. Supreme Court case that could impact the future of TV viewing is not expected until later this year, the impending decision continues to weigh heavily on all parties involved. These concerns also extend to the millions of Americans that could be affected by the outcome–for better or worse. As technology has progressed, the way Americans watch television has undergone major changes. As opposed to an antenna and a VHS to record content, many viewers have cable TV or satellite subscriptions with digital recording devices (DVR) or subscribe to streaming services like Netflix. Aereo contends it has simply taken this paradigm to the next level. The innovative start-up employs antenna colonies with thousands of tiny antennas linked to cloud storage to provide broadcast television to subscribers over the internet for the nominal rate of $8 – $12 per month. By providing the technology to view free television, Aereo argues it should be no more liable for copyright infringement than Radio Shack was for selling an antenna to consumers 20 years ago. Meanwhile, Comcast-owned NBC, Disney-owned ABC, News Corp’s Fox, and CBS argue that because Congress has already mandated in the Copyright Act of 1976 that companies were permitted to pull content off the air and re-transmit it to individuals for money, as in the case of cable and satellite companies, and must pay broadcasters a re-transmission fee, Aereo should be required to do the same.
No matter what the outcome in the Aereo Supreme Court case, the future of TV viewing has been greatly impacted and will continue to undergo major changes and upgrades as technology evolves. It has become evident that the status quo will no longer suffice and all parties involved need to consider their options. In order to maintain their customer base, broadcasters and internet media streaming service providers will need to concentrate less on their bottom lines and become more focused on customer needs and satisfaction. Beyond the price differential, this focus on customer satisfaction and convenience, which allows for subscribers to access broadcast television programs on their computer, tablet, or smartphone via the internet at a nominal rate and via varied platforms, could very well account for the success of streaming media providers, such as Netflix and start-ups like Aereo, and the subsequent shift away from traditional cable and satellite providers.
Opinion by Leigh Haugh