Yesterday's Supreme Court ruling on violation of Copyright Act,
1976 came as a setback for the TV-over-Internet service provider
company, Aereo. The Supreme Court has reversed the verdict of lower
court and agreed with the broadcasters' and Justice Department's
claim that alleges Aereo's services of violating broadcaster
copyrights. The company has earlier revealed that it wouldn't
survive if the Supreme Court verdict goes against it as there is no
plan B to keep it afloat.
On the other hand, the Supreme Court verdict came as a major
relief for the broadcasting and media companies as they are now
able to protect their subscriber base as well as revenues. Aereo's
low cost broadcasting service was a threat to these companies as it
was eroding their subscriber base and revenues.
Some major media stocks rallied during yesterday's trading
session after the verdict.
) gained 6.2%,
Twenty-First Century Fox, Inc.
) was up 2%,
The Walt Disney Company
) rose 1.5%,
The E. W. Scripps Company
) jumped 8.8% and
Sinclair Broadcast Group, Inc.
) soared 15.6%.
The New York-based company, Aereo, in Feb 2012 launched a new
innovative technology in the broadcasting industry, which allows
its customers to view live and recorded TV broadcasts on
Internet-connected devices such as computers, smartphones or
tablets. Media titan Barry Diller led
) has been financially backing this online TV broadcaster.
For this service, Aereo was charging as little as $8 to $12 a
month as against the major TV broadcasters who charge up to $75 per
month. Started in the New York City, the company has been able to
expand its services in 11 cities in just less than two years.
Disney and Twenty-First Century Fox were the first broadcasters
to file a case against Aereo. However, other broadcasters such as
CBS Corp. and
) joined the lawsuit when federal court gave a clean chit to Aereo.
They argued that Aereo's way of capturing broadcast signals for
free is illegal as other broadcasters have to pay a heavy
transmission fee for receiving signals .
Aereo in its defence said that the company's services are
similar to that of a personal digital video recorder as its users
get signal from a dime-sized antenna, which is individually
assigned to them. However, the Supreme Court rejected the arguments
by saying that the company is operating as a cable service
We believe that the Supreme Court verdict is a loss for
consumers who will now continue to pay heavy rentals for availing
TV broadcast services.
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