To Stream or Not to Stream

Posted By: Logan Woodruff


aereo_antenna_array1The major television networks petitioned the Supreme Court on Friday October 11, 2013, to hear an appeal in their case against Aero Inc. (“Aereo”), according to a Wall Street Journal article. Amol Sharma and Shalini Ramachandran, Broadcasters Ask Supreme Court to Intervene Over Aereo, The Wall St. J. (Oct 11, 2013 4:56 PM),; see also WNET, Thirteen v. Aereo, Inc., 712 F.3d 676 (2d Cir. 2013). Aereo is an $8 a month service that records and streams local TV signals over the web for their users to watch on their mobile phones or other electronic devices.  Aero allows their users, say in New York, to have access to prime time shows and local news that is broadcast in their area.  Aereo is in 7 cities currently, and plans to grow their business to reach 22 cities by the end of 2013.

Broadcasters argue that Aero infringes their copyright under 17 U.S.C.S § 106(4) (which grants them the right of public performance over their copyrighted works) by transmitting broadcast television programs over the Internet while the programs are still airing on broadcast television.

Aereo argues that their services do not infringe the broadcast networks’ copyrights.  Aereo’s transmissions are not public performances.  Aereo’s customers are assigned user specific antennas that are used to record broadcast television signals for only that specific customer.  Customers choose which channels to record and Aero creates a unique copy for that individual customer.   Aereo’s transmissions are thus to a single specific user, generated from a unique copy created at the user’s request, and are only accessible by that individual user.   Aereo argues that their services are no different than those available to every individual who records broadcast TV on their own DVR or VCR machines.  Aereo thus only sells access to an individual antenna and capabilities to record programing and watch it later.

The Second Circuit Court held that these transmissions were not public performances and did not infringe on the broadcasting networks’ copyrights, thus denying the broadcasting networks’ request for an injunction against Aereo.

The TV networks have petitioned the Supreme Court to hear their case because lower courts in other circuits have held the opposite, in favor of the television networks.  In late 2012, in the case of Fox Television Stations, Inc. v. BarryDriller Content Sys., PLC, 915 F. Supp. 2d 1138 (C.D. Cal. 2012), the California District Court granted the request for an injunction covering only the Ninth Circuit against, an Aereo-like service that competes with Aereo.  The Ninth Circuit is considering their appeal and could make a decision in the coming months.  In September of 2013, in the case of Fox Television Stations, Inc. v. FilmOn X LLC, CIV.A. 13-758 RMC, 2013 WL 4763414 (D.D.C. Sept. 5, 2013) reconsideration denied, CIV.A. 13-758 RMC, 2013 WL 4852300 (D.D.C. Sept. 12, 2013), the District of Columbia granted a nationwide injunction against FilmOn X, the company formerly known as Aereokiller and  FilmOn, like Aero, argued, to no avail, that they “are merely providing consumers with the individual antennas but not access to the content.” Steven Musil, TV broadcasters win preliminary injunction against FilmOn X, (Sept. 5, 2013 7:45 PM),

This split among the circuits should give the Supreme Court the encouragement that it needs to hear a case on this issue.
The major broadcasting networks say these types of streaming companies threaten their business models.  Networks license their programing to cable and satellite operators for a licensing fee.  But the companies like Aereo and FilmOn X, detract from the profits that broadcasting networks could make.  Meanwhile, until the Supreme Court actually takes the case, companies like Aereo can continue to expand their businesses and roll out their services into new markets, which will make it more difficult to shut them down if the Supreme Court decides against them.
People most affected by a decision against the broadcast networks would be those people who watch programing live on their televisions without the use of companies like Aereo.  If broadcast networks decide to discontinue broadcasting their programing or specific programs over the airwaves, and only sell them to cable, satellite, and other licensed on-line companies, then the people who can’t afford to pay for those services will not have access to their prime time programing and news broadcasts.
Stay tuned for future decisions on this issue, as they will have financial impacts on companies and audiences who choose to stream as well as those who choose not to stream.


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