Aereo is in big trouble after the US Supreme Court issued a ruling in its months-long legal ordeal in which it faced major network broadcasters.
According to the decision of the Supreme Court of the United States, Aereo is not within the bounds of the Copyright Act, and the decision taken by the second-circuit court will be reversed. In a 6-3 decision, Aereo was deemed illegal.
The company had previously stated that, if this decision was taken, the startup would be through, which is a pretty big loss for the company, which managed to raise some $100 million (€73,355) in funding in the past few years.
According to the Supreme Court Justice Breyer, the ruling basically says that Aereo is the equivalent of a cable company, rather than a mere equipment provider as it has tried to tell anyone who listened.
The startup has actually said on several occasions that, unlike cable companies where the streaming is non-stop, its technology is inert unless the user tunes it. The court doesn’t see things this way, saying that this little detail isn’t enough to save Aereo.
Unfortunately, Aereo was trying to implement a new way to watch content in the United States and the decision doesn’t just affect this particular company, but also all others trying to take on a similar business model.
Aereo’s service is made out of two things – a small antenna that is stored on one of Aereo’s server farms and that users basically rent when signing a contract, and a cloud storage service that works like a DVR and which records shows.
The company transcodes the content over the Internet, basically taking it from these broadcasters and sending it back to users in a digital format. Big networks are obviously unhappy with the issue, since Aereo doesn’t want to pay any kind of royalties for the content, which is viewed as copyright infringement.
Companies have argued that the service provided by Aereo is a public performance, which is equal to taping someone’s song, for instance, rather than singing it yourself in your own living room, which would be a “private performance.”
Aereo has been doing a back and forth with broadcasters for the better part of the past year. It has won some cases and lost others, which is why it agreed to take the issue to the Supreme Court, confident that it would win the case. The highest court in the US agreed to take on the case back in April and it seems that it has now landed the final blow to Aereo.