After the latest from the SCOTUS, Aereo is taking a step back…
The SCOTUS (Supreme Court of the United States) has been on a roll lately, and it seems they’ve rolled right over Aereo in a sweeping decision that has all but shut down the little startup that would. While I’m not an Aereo subscriber, the company has sent out a second update to its users. The company has decided to “pause.”
In his short update to Aereo’s customers, Aereo CEO and Founder Chet Kanojia let’s everyone know exactly what the company is looking to do in the coming days. They’re pausing operations as of 11:30am ET Saturday 2014-06-28.
“As a result of that decision, our case has been returned to the lower Court. We have decided to pause our operations temporarily as we consult with the court and map out our next steps… All of our users will be refunded their last paid month. If you have questions about your account, please email firstname.lastname@example.org or tweet us @AereoSupport.”
At this point, as I understand things, Aereo has three options:
1. Cease total operations and close down
While this would be the most disappointing of all the options available to Aereo at this point, it seems like this is the most likely outcome. Their case has been returned to the lower Court and the decision that was originally found in their favor has been overturned. The trial, if it goes forward, is still on, but with the Supreme Court having indicated that Aereo is effectively a cable company (as defined by Congress, in 1976, I think…) Aereo has said that they would close their doors rather than take either action 2 or 3, below.
2. Change their technology so they do not infringe copyright laws
I have no idea exactly WHAT this would entail, but it MAY be possible for Aereo to change what they’re doing so that they don’t infringe on the copyright owner’s performance. I had heard on TWiT that some experts had explained that there’s NO WAY a dime-sized antenna could be pulling in any kind of OTA TV signal and that what was likely happening was that each antenna was instead part of an array that pulled in the appropriate signal(s) in each broadcast area. As such, this is where you get the 1976 cable company (think: regional, shared or community antenna) comparison.
3. Try to strike a deal with the Networks and Pay a Rebroadcast Fee
All of the hullaballoo could be over tomorrow if Aereo agreed to pay a rebroadcasting fee. It’s unlikely that that will happen, however, as Aereo went to great pains to construct their product and business model around what they believed to be loopholes in the law. While not illegal by any means (EVERY corporation does that with the tax laws of EVERY government they do business with, world-wide), they did get shot down. As they went to such great lengths to avoid having to pay ANY kind of rebroadcasting fee, it’s unlikely that Aereo will agree to pay the fees on behalf of their customers (with them likely passing that fee on to each customer…). However, this would make everything legal, and wouldn’t require Aereo to do anything to their technology or their product(s).
At this point, it’s all on hold as Aereo circles the proverbial airport and tries to figure out how to move forward. What I think is funny is that Aereo in their current incarnation represents what the consumer wants and how many see the future of television. Nearly all video is going to go from OTA to OTI (over the internet) in 5 to 15 years.
I think Comcast sees this as fact, as they have been steadily raising the price of their Internet service over the past few years in order to combat lost or declining television package revenue. Most consumers would love to purchase individual channel broadcasts or services – i.e. an a la cart service – instead of having networks or specific channels bundled with channels and services they will never use. They’d also rather push it over the internet to a connected TV, computer, mobile device or other set top box so they could watch what they want, where they want, when they want.
The issue is without a doubt, complicated. I actually think very few people in this country know what the TRUE right and wrong answers are to these legal questions, based on the current state of all relevant US legislation. In the end, I think it’s all going to boil down to who gets paid and how much they get paid; but that’s just me, I guess. Greed in America is running amok at this point (and I’m a conservative, too….); and I’m not certain where it will all end.
What do you think of all of this? Are you an Aereo customer? Are you a cord cutter? If you don’t have an Aereo subscription, were you thinking of getting one if and when the product became available in your home city? Do me a favor and sound off in the comments area, below and tell me what you think. I’d love to hear a confirming or contrasting decision. As I said, this is a confusing and complicated question, and the results of all of this are going to be felt for quite a long time, I think.