Shares of broadcast TV station owners such as CBS Corporation saw sudden rally on Wednesday after the U.S. Supreme Court ruled against Aereo, a company that streams over-the-air TV signals to its users via the Internet.
The Supreme Court has decided that setting up hundreds of tiny antennas, capturing television signals, and charging people to watch is a public performance. So ends the dream of Aereo, the Internet startup that thought it had found a clever way past copyright laws and spent its short lifespan battling broadcasters in the courts for its right to exist.
In legal terms, the 6-3 decision argues that Aereo violates broadcasters’ copyrights by distributing their work without their permission. The decision, delivered by Justice Stephen Breyer, says the court was unconvinced by Aereo’s argument that it was an equipment provider allowing people personal access to content they were legally allowed to access. Aereo’s business model—in which broadcasters received no fees from the startup—has been belittled as a Rube Goldberg contraption to get around copyright law. The Supreme Court ruling said that only “behind-the-scene technological differences” separated Aereo from cable providers.
Entravision Communication, LIN Media LLC, Gannett Co., Inc., The E.W. Scripps Company, Meredith Corporation and Martha Stewart Living Omnimedia, Inc. all made noteworthy gains as the ruling is considered a major victory to the broadcast networks.
Bloomberg reports this decision doesn’t keep companies from taking broadcast content and sending it over the Internet; it only requires that such companies get the permission of the companies that hold the copyright to this content. Cable-TV companies and satellite TV services will pay $4 billion in so-called retransmission fees to broadcasters this year, according to media analysis service SNL Kagan. This decision defends that status quo.
However, according to Washington Post, Broadcasters should not take their victory at the Supreme Court as a sign that they will be able to operate the same way forever. Instead, broadcast and cable companies should take the Aereo ruling as a stay before Congress acts to explicitly legalize competitors such as Aereo. In the time they have been given, they should move as fast as possible to respond to the clear customer demands that Aereo exposed.
