By Dow Jones Business News,
February 24, 2014, 06:05:00 PM EDT
Television broadcasters said in a filing with the Supreme Court that the continued operation of online-video service
Aereo Inc. could force them to reconsider offering as much free, over-the-air TV programming as is now available.
In the filing, broadcasters laid out their arguments in their legal case against Aereo, which streams TV station
signals to consumers for a monthly fee without the permission of broadcasters. The startup says its technology
facilitates people's legal right to watch over-the-air TV free of charge.
Broadcasters have sued Aereo in several U.S. courts over the past year in an attempt to put the startup out of
business, with mixed results. The Supreme Court agreed in January to hear the case. Arguments will occur before the
court on April 22.
The brief filed on Monday by broadcasters, including Walt Disney Co.'sABC, CBS Corp.'sCBS, Comcast'sNBC and 21st
Century Fox's Fox broadcast network, asked the Supreme Court to shut Aereo down. Until last June, 21st Century Fox was
part of the same company as Wall Street Journal owner News Corp.
The case the Supreme Court will consider is the broadcasters' appeal of a decision last year by the U.S. Second
Circuit Court of Appeals, which denied the TV stations' injunction request. Broadcasters said in the brief that the
appellate court, in upholding Aereo's legality, had "created a gaping hole in copyright law that threatens the very
existence of broadcast television we know it."
An Aereo spokeswoman declined to comment.
The briefs filed on Monday largely restated arguments the broadcasters have made before. Broadcasters say Aereo is
stealing their content and could set a precedent that would greatly harm their ability to collect carriage revenues from
pay TV operators for their TV stations--a growing and highly profitable source of revenue. The case has far-reaching
implications for the future of online video and the TV business.
The warning that broadcasters could have to scale back programming made available free echoes threats made by
broadcast executives over the past year to convert their broadcast networks to cable channels. That would be a complex
process that would require sorting out how to avoid hurting the local broadcast stations that carry network programming.
There could also be political pushback: some lawmakers see over the air TV, especially local news, as a vital conduit of
news during emergencies.
The Supreme Court will assess whether Aereo is violating a provision of U.S. copyright law that grants content owners
the exclusive right to perform their work "publicly"--meaning that others need permission to retransmit it. Aereo says
its setup, which lets users tune antennae at its facilities and make personal recordings of broadcasts, facilitates
private performances for each individual user.
Aereo, which is backed by media mogul Barry Diller, is available in 10 U.S. cities. The service lets users stream
major broadcast channels such as CBS, NBC, ABC and Fox on laptops and mobile devices. Some broadcasters have begun
making local stations' signals available online but they generally restrict access to pay-TV subscribers, whereas Aereo
That makes the service potentially appealing to "cord cutters"--people who have dropped cable TV connections--but a
major threat to content owners. Pay-TV providers spend significant sums for the rights to carry broadcast signals. Such
"retransmission" revenues for TV stations were $3.3 billion in 2013 and are expected to grow to $7.6 billion by 2019,
according to SNL Kagan.
Broadcasters noted that even as a market for online-video rights has developed through the likes of Netflix Inc. and
Hulu LLC, Aereo has made an effort to "circumvent that market and avoid paying for the same rights that others have paid
for." They repeated past statements that "nothing will stop" others like cable and satellite operators who currently pay
for rights from "devising their own Aereo-like workarounds to achieve the same result."
Write to Amol Sharma at firstname.lastname@example.org and Shalini Ramachandran at email@example.com
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