Updated below with Aereo CEO statement.
The Supreme Court today ruled that Aereo, the startup that streamed local TV broadcasts to its customers, violates the Copyright Act. It’s a big victory for broadcasters and the status quo, and most likely a deadly blow to Aereo.
In a 6-3 decision, the high court sided with ABC, which said Aereo was violating copyrights by using antennas to capture TV broadcast signals and transmit them over the Internet. Although CEO Chet Kanojia had expressed confidence about the merits of his company’s case — it argued that each stream was a private transmission — he had also said a loss would likely kill Aereo.
The Supreme Court disagreed with Aereo’s assertion that it wasn’t distributing public broadcasts. From the decision: “Aereo communicates the same contemporaneously perceptible images and sounds to a large number of people who are unrelated and unknown to each other.”
Cable companies pay broadcasters retransmission fees and Aereo didn’t; broadcasters had threatened to move their content to pay cable. Meanwhile, as we’ve mentioned, cable and satellite companies had toyed with adopting Aereo’s approach to avoid retrans fees, pending the Supreme Court decision.
Today’s ruling clears up a previously muddled legal landscape when it comes to streaming online content. As our own Troy Wolverton wrote, a couple of lower courts had sided with Aereo, but a similar service called FilmOn had been banned by the courts.
Shares of the major networks are trading higher on the news.
Update: Kanojia has issued a statement on Aereo’s website, saying “our work is not done.”
However, Aereo backer and IAC Chairman Barry said on Twitter that “it’s over.”
Kanojia again: “Today’s decision by the United States Supreme Court is a massive setback for the American consumer. We’ve said all along that we worked diligently to create a technology that complies with the law, but today’s decision clearly states that how the technology works does not matter. This sends a chilling message to the technology industry.” He also said: “Consumer access to free-to-air broadcast television is an essential part of our country’s fabric. Using an antenna to access free-to-air broadcast television is still meaningful for more than 60 million Americans across the United States. And when new technology enables consumers to use a smarter, easier to use antenna, consumers and the marketplace win.”
Photo: Chet Kanojia, founder and CEO of Aereo, shows a tablet displaying his company’s technology in New York in 2012. (Bebeto Matthews/Associated Press)