In a move that should surprise no one, Aereo, the pioneering video company that re-transmitted local TV signals to customers over the Internet, has filed for bankruptcy.
The company, which lost a crucial Supreme Court case in July and whose service was barred under a national injunction that was put in place last month, is pursuing a Chapter 11 reorganization. The move to file for bankruptcy represents an attempt by the company to stave off its continued legal challenges while trying to find a buyer for its assets or somehow reviving its business.
The U.S. Supreme Court decision effectively changed the laws that had governed Aereo s technology, creating regulatory and legal uncertainty, Chet Kanojia, the company s CEO, said in a post on Aereo s Web site. And while our team has focused its energies on exploring every path forward available to us, without that clarity, the challenges have proven too difficult to overcome.
Aereo has about $4.2 million in debt and about $20.5 million in assets, according to Bloomberg, citing the company s bankruptcy filings. It had raised about $96 million in funding through several equity investment rounds, Bloomberg reported.
Based in New York, Aereo offered a service that allowed consumers to watch live or recorded local broadcasts programs on their computers and mobile devices. Its service was built around a system of dime-sized antennas connected to computers in its data centers. The company, which offered its service for as little as $8 a month, assigned one antenna to each customer.
The use of the multiple antennas represented an attempt to circumvent copyright laws forbidding the re-transmission of broadcasts without permission. Instead of representing an illegal re-transmission, the company argued that its service was effectively the same as individual consumers tuning in local broadcasts using antennas at their homes and then using something like a SlingBox to relay that video to their devices.
The company was quickly sued by broadcasters, even as it expanded its service to multiple cities across the United States. Although Aereo won at the district and appellate court level, the Supreme Court didn t buy its argument, ruling that it was in effect acting like an illicit pay TV service and was re-transmitting the broadcasts without permission. Aereo attempted to strike deals with broadcasters, but was unable to reach agreements.
Last month, a district court granted a preliminary injunction against its services, and earlier this month, Aereo closed its Boston office and laid off 43 employees.
File photo of Aereo CEO Chet Kanojia (Bebeto Matthews/Associated Press).
