Like many cable and satellite TV consumers these days, I have been closely following the new options on the market for streaming TV service and hoping that the day will soon come when I can significantly reduce my monthly subscription costs without cutting off my access to live TV. With the cost of living and working in Silicon Valley running so high already, expensive TV service is one of those expenses I just can't help but resent each month, especially in light of the fact I have so little time to spend watching television programming anyway. So, when I happened to come across the start-up Aereo, their business model caught my attention, as you could access a number of channels with their service for a very low monthly price. I remember thinking to myself that it was only a matter of time before there would be litigation challenging the Aereo model. I did not have to wait long before that in fact happened. As you might expect, a group of broadcasters quickly filed for injunctions. They lost in cases filed against Aereo in New York and Boston, as well as in an appeal to the Second Circuit. However, they had more success in an injunction filed against an Aereo competitor, FilmOn, in the D.C. Circuit. Due to the split circuit decisions, the dispute has already made its way to the Supreme Court and will be heard later this year.
At issue is the question of whether or not Aereo's service publicly performs copyrighted television programs Petitioners argue that the Aereo model "would seem to be an obvious copyright violation--an entire business model premised on a massive for-profit unauthorized exploitation of copyrights where competitors' prices are undercut because they seek authorization and pay fees" and that "Aereo offers precisely the kind of service Congress sought to prohibit when it revised the Copyright Act to define public performance to include retransmissions of over-the-air broadcasts to the public." The other side of the argument, which the Second Circuit Court of Appeals found compelling, is the argument that the Aereo model does not infringe Petitioners' public performance right since the transmission under the Aereo model is to a single subscriber and therefore is not a public performance. In reaching this decision, the Second Circuit looked to prior precedent interpreting the public performance right and the transmit clause of the Copyright Act in Cartoon Network LP, LLLP v. CSC Holdings, Inc., 5369F.3d 121 (2d Cir. 2008), stating that in that case the same Court had found that "in determining whether a transmission is to the public, it is important to discern who is capable of receiving the performance being transmitted" and held that a transmission of a recorded program to an individual subscriber was not a public performance.
I don't have much of a track record in predicting how the Supreme Court will rule on a particular case, but as a technology attorney, I am more persuaded by the Aereo argument than the broadcasters' position. I think that given all the other relevant copyright decisions in this space over the years, there is reason to anticipate that the Supreme Court should decide in Aereo's favor. Whether they will or not, however, is another question entirely.
Obviously, the Aereo model has the major networks concerned. It has been reported that CBS and Fox are already threatening to turn their broadcast channels into cable channels, asserting that they cannot afford to provide the type of content that they are currently providing from an advertiser-supported-only business model. Professional sports leagues such as the National Football League and Major League Baseball have been reported to have also threatened to move their high-profile broadcasts such as the Super Bowl and World Series to cable, and certain cable and satellite TV companies are already exploring building services to compete with Aereo.
With all the ways to view and consume content now on the market, it was almost inevitable that we would be seeing streaming TV companies emerge on the market and that there would be litigation in an attempt to put any of the more successful models out of business. I personally have been eager to see some changes in the marketplace on how I can access live TV programming, and I've been frustrated at the snail's pace that such change has seemed to occur, as so many other new technologies flooded the marketplace. Without question, a decision in this case has the potential to disrupt and transform the broadcasting landscape as it now exists. Whether or not any such disruption will be beneficial to consumers remains to be seen. As an interested consumer, I am hopeful that any change in the television marketplace that arises because of Aereo will be for the better.