Aareo vs. American Broadcasting Companies.
By Deepak Chitnis
WASHINGTON, DC: Aereo TV founder and CEO Chet Kanojia will be back in court soon to take on the titans of the network broadcasting industry, only this time it will be in the US Supreme Court.
The highest court in the entire country agreed earlier this month to hear the case of the American Broadcasting Companies vs. Aereo. The notoriously selective Supreme Court, which only hears cases it deems relevant to how constitutional law is interpreted in the future, recognized the important of the case and the implications that Aereo has on the future of broadcast media.
The company has been the subject of intense litigation since its inception in 2012, when a lawsuit brought on largely by the major four networks – CBS, NBC, ABC, and Fox – sought to destroy Aereo for its innovative technique of streaming television feeds that are picked up by a tiny antenna attached to any device that has an internet connection.
Regardless of the device’s size, wireless or not, a subscription fee of just $8-$12 per month can get customers access to their favorite shows and channels whenever they want, and the company even includes a DVR service for added convenience.
The initial suit against Aereo was ruled in its favor, striking a huge blow to the big conglomerates and causing Kanojia to call his legal battle a David vs. Goliath story. The big networks argued that Aereo was pirating their feeds and sharing them publically, thereby engaging in copyright infringement. That argument was defeated, as the US 2nd District Court of Appeals in New York last year said that recordings of broadcast content did not fall under the domain of “public performances,” and therefore were not subject to the same copyright laws.
Should the Supreme Court rule in Kanojia’s favor, and he’s very confident that it will, it would be a game-changing, precedent-shattering 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, however, says that Aereo and big TV can work together. Earlier this month, 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.
Aereo also raised about $34 million recently 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.
Kanojia is no stranger to starting a company. He was the man behind Navic Systems, an IT startup that he sold to Microsoft in 2008 for a sum of $250 million, according to various reports. Born and brought up in Bhopal by English-speaking parents, he came to the US for his post-graduate studies, earning a master’s degree from Northeastern University in computer sciences.
The fate of Kanojia’s latest venture now rests in the hands of the nine most powerful Americans in the judicial branch. The case will go before the Justices in April.
To contact the author, email to deepakchitnis@americanbazaaronline.com