The United States Supreme Court today will hear oral argument in a case that could have far-reaching and industry-changing effects on the television broadcasting and cable industries.
Dubbed the Betamax case of the 21st century, the 1984 ruling that allowed consumers to record programming, American Broadcasting Companies v. Aereo has the potential to tip the TV industry on it’s head.
Aereo is a company that has created the technology to grab live TV signals through the use of tiny remote antennas that capture broadcast TV signals, which are then stored in the cloud. This means no more cable bundles, a key revenue stream for cable companies like UPC and others. It also means no more cable bill.
With Aereo, consumers will pay between $8 and $12 per month to watch live TV on any device and recorded programs from major broadcast networks. It threatens the cable companies and the networks.
The Aereo model is a workaround to existing regulations, which rides on the Cablevision court ruling in 2008, which held that consumers had the right, through their cable boxes, to record programming. But then, cable companies pay broadcasters billions in so-called retransmission fees while Aereo pays them exactly nothing. And the case is not just about Aereo — it opens the gate for cable companies or others to build a similar service and skip the billions in payments to the networks.
As the NY Times writes, “It is up to the court to decide whether the service is a consumer-friendly reskinning of the broadcast universe or just one more example of an Internet pirate trying to loot copyrighted content.”
In the broadcasters’ brief asking the Supreme Court to reverse a lower federal court’s decision, Aereo was described as “an entire business model premised on massive and unauthorized commercial exploitation of copyrighted works.”
It is an interesting case that could very well have an impact well beyond the borders of the United States.
See the NY Times for more on this story.
We will follow oral argument and plan a more through feature regarding European impact in our upcoming issue of GC Grapevine.
Kevin Livingston is Editor-in-Chief of GC Grapevine magazine.
