Decision in Kanojia’s favor would be big blow for Cable broadcasters.
By Deepak Chitnis
WASHINGTON, DC: Chet Kanojia’s Aereo TV is fighting for its life in the US Supreme Court, as the country’s highest court mulls over whether or not to allow the burgeoning digital television distributor to continue existing, or shut down the operation in favor of the larger TV studios that are understandably threatened by it.
The concept behind Aereo TV is an innovative technique of streaming television feeds that are picked up by a tiny antenna attached to any device that has an Internet connection. Essentially, if you attach this postage stamp-sized antenna to your iPad, laptop, or smartphone, you can pick up television signals in your area and watch TV wherever you go, for a subscription fee of just $8 per month.
That has the big television networks riled up, as they stand to lose a fortune if Aereo TV is allowed to operate. For just a fraction of the cost of an actual cable subscription, subscribers of Aereo TV can watch their favorite shows wherever they are, whenever they want.
Now, a lawsuit fronted by the four biggest names in US television – CBS, ABC, NBC, and Fox – against Aereo TV is fighting its way through the Supreme Court, which doesn’t seem to know exactly which way to go in making its verdict. The case, entitled “ABC Inc. v. Aereo, No. 13-461,” will be hugely precedent-setting no matter which way the verdict ultimately goes.
On the one side, there’s the argument that Aereo TV is facilitating copyright infringement and is, essentially, stealing content from television networks. That’s the case being made by the plaintiffs, and reportedly has the support of Chief Justice John Roberts. Roberts chided Kanojia and Aereo TV in court on Tuesday, for apparently existing to just circumvent copyright and intellectual property laws.
Justices have also pointed out that Aereo TV does not pay any royalties to the stations it leeches content from, with Justices Sonia Sotomayor and Ruth Bader Ginsburg saying that the company was essentially making millions of copies of something, and selling it to consumers as if it was the original – something that the movie and music industries have been fighting for years with the advent of Internet piracy.
Aereo, on the other hand, is saying that it does not provide any content, just a device through which content can be accessed. Kanojia has likened his company’s flagship digital antenna to the old-style “rabbit ears,” which were affixed to the top of a television to catch signals in the area. Kanojia and Aereo TV have argued that that’s all their device is doing, and if the government didn’t outlaw those older antennae, why should they punish this one?
Aereo TV lawyers have also argued that Internet streams do not fall under the purview of “public performances,” which the big TV firms have attempted to use to say that Aereo TV is infringing on copyrights. Because these antennas belong to individual consumers, they are not being publically displayed or broadcast, and therefore are not entitled to the same legal scrutiny.
Big TV has attacked Kanojia ever since Aereo was launched two years, but has actually extended his hand towards them in an effort to work together. Earlier this year, at the Citi 2014 Global Internet Media and Telecommunications Conference in Las Vegas, Kanojia said his antenna-based company could actually benefit broadcast networks, and that Aereo is only seeking to appeal to the demographic that can’t afford hundred-dollar cable TV packages. There’s also the idea of broadcasters licensing and using the Aereo TV technology to help reach a wider audience on digital platforms around the country, if not the world.
Should the Supreme Court rule in Kanojia’s favor – and he has remained very confident that it will – the ruling would be a game-changing decision that would be felt in the coffers of all big network honchos in the US, and eventually perhaps the world. When a person can pay just $8 a month, attach a tiny antenna to their iPad, and watch TV at their own convenience, who’s going to bother watching cable anymore?
Kanojia is no stranger to innovation in technology. He was the man behind Navic Systems, an IT startup that he sold to Microsoft in 2008 for a sum of $250 million – not bad for a boy from Bhopal, India, who came to the US for his post-graduate studies and earned a master’s degree from Northeastern University in computer sciences.
Aereo TV raised about $34 million towards the end of last year, to be used as part of its nationwide expansion program, raising its total Series C round of investment gathering to around $97 million. The company has been backed by industry big-shots like Barry Diller (InterActive Corps), Gordon Crawford (an investor who has backed Time Warner and DirecTV, among other ventures), and Himalaya Capital Management.
Arguments are still being made, and a decision will likely happen in June, at the very earliest. Until then, the entire entertainment industry will watch and wait, with baited breath.