What is Aereo? A Look at the Supreme Court Case

A major legal battle has made its way to the Supreme Court and it may affect the way you watch your favorite television shows. The case is American Broadcasting Companies, Inc. v. Aereo, Inc., and the nation’s highest court is hearing arguments today over whether the online TV streaming service infringes on the copyrights of broadcasters.

The court’s decision on this case could have major ramifications for entertainment companies and TV viewers, especially with the popularity of other streaming services such as Netflix, Hulu and Amazon. Here’s what you need to know about the case:

What is Aereo?

Aereo is a service that allows subscribers to stream and record TV online through a computer, smartphone or other mobile device. The service starts at $8 a month. According to the Associated Press, the Brooklyn, N.Y. startup, which is backed by billionaire media executive Barry Diller, “takes free television signals from the airwaves and sends them over the Internet to paying subscribers in 11 cities.” Those cities include Boston, New York, Miami, Atlanta, and Houston, and the company has plans to expand by more than double that.

How does Aereo work?

Aereo uses dime-sized antennas that transmit programs over the Internet, according to the Associated Press. When a subscriber logs onto Aereo’s website to pick out a program to watch or record, Aereo assigns them an antenna that then transmits the program to their device.

The antenna is only used by one subscriber at a time, and Aereo says that?s much like the situation at home, where a viewer uses a personal antenna to watch over-the-air broadcasts for free.

So, what’s the problem?

The main issue here is about copyright infringement. Here’s how SCOTUSblog explains the issue:

Whether a company "publicly performs" a copyrighted television program when it retransmits a broadcast of that program to thousands of paid subscribers over the Internet.

That is, does Aereo violate the copyrights of broadcasters when it streams their programming online? According to the Associated Press, several major broadcasters believe the answer to that question is yes. They believe Aereo is basically stealing their programming by accessing free TV signals.

Broadcasters including ABC, CBS, Fox, NBC and PBS have sued Aereo for copyright infringement, saying Aereo should pay for redistributing the programming the same way cable and satellite systems do.
The US networks increasingly are reliant on these retransmission fees, estimated at $3.3 billion last year and going up to more than $7 billion by 2018, according to research by SNL Kagan, which analyzes media and communications trends. They fear that they will lose some of that money if the Supreme Court rules for Aereo.

It’s a case that also highlights issues of old media keeping up new technologies, as well as access and ownership of content.

Here is preview of the arguments for both sides.

What is Aereo saying about this?

According to SCOTUSblog, Aereo says its service operates like a “home DVR” and is all about customer choice.

The Associated Press reported:

Aereo founder and CEO Chet Kanojia recently told The Associated Press that broadcasters can?t stand in the way of innovation, saying, "the Internet is happening to everybody, whether you like it or not."

Here is a look at what Aereo may be arguing to the Supreme Court.

Which side has support?

According to the Associated Press, “the Obama administration supports the broadcasters, but has urged the court to “avoid a broad ruling in favor of copyright protection that could call into question the rapidly evolving world of cloud computing, which gives users access to a vast online computer network that stores and processes information.”

Artists, actors, Major League Baseball, and the National Football League also back the broadcasters, while small cable companies, consumer groups, and independent broadcasts support Aereo.

How will this affect you?

As The Washington Post points out, if Aereo wins, it could dramatically change the way people watch programs and lead consumers to ditch cable for cheaper and more convenient online services.

But, Bloomberg Business Week points out that Aereo may not really pose a major threat to broadcasters, saying that it only offers programs it can pick up by antenna and isn’t strong enough to compete.

Here is a detailed look at this case, including briefs and petitions, from SCOTUSblog.