Fox threatens to leave network TV in protest over Aereo lawsuit
A US Court of Appeals delivered a blow to TV networks in their case against online start-up Aereo. In what was viewed as a major win for the small company, the court ruled that Aereo may continue to stream broadcast TV shows via the Internet. Such transmissions do not constitute as 鈥減ublic performances鈥� of copyrighted work, much to the chagrin of television networks like Fox.
The New York-based start-up came up with a clever聽end run聽around normal copyright laws. Aereo has hundreds on TV antennas in New York, each picking up broadcast TV and posting live feeds to the Internet. Aereo subscribers are then assigned to two antennas, one for recording (like TiVo) and one for streaming, which they may tap into from any computer, but will not be shared with anyone else.
The television networks鈥檚 battle with Aereo deals with the idea of re-transmission. When networks sell their programming to services like Hulu, the Web company pays the networks a re-transmission fee. Aereo, however, does not pay re-transmission fees. The idea is that consumers with antennas do not normally pay for the programming; Aereo is simply extending the reach of people's antennas to a place outside of their homes and allowing the same families to view the free programming.聽
When Aereo began to gain traction, Fox, CBS, ABC, and other networks sued.
The court filing : 鈥淣o amount of technological gimmickey by Aereo 鈥� or claims that it is simply providing a set of sophisticated 鈥榬abbit ears鈥� 颅鈥� changes the fundamental principle of copyright law....鈥�
Earlier, the courts dismissed a motion to have an injunction on the star- up. After the motion was dismissed, Fox indicated that it would consider shutting its doors to broadcast signals and switch to a subscription-only business model.
鈥淲hile advertising was once the life's blood for broadcast TV, over the last few years,听cable and satellite operator retransmission fees has become vital to their business,鈥� Steven J. Vaughan-Nichols.
Jonathan Handel, a lawyer for TroyGould Attorneys in Los Angeles, is doubtful that the networks will switch to a subscription-based business model.
鈥淭here鈥檚 still revenue to be had in broadcast,鈥� says Mr. Handel. 鈥淚f they did shut down, where does that leave the local stations?鈥�
Handel says that this is a 鈥渉igh stakes game of chicken鈥� because the networks are probably limited due to their affiliates. He mentioned the possibility of a two-tiered model where there would be a 鈥淔ox Lite鈥� and then a regular Fox for subscribers. However, Handel is quick to explain that the networks already have subscription channels.
鈥淭he same ABC that doesn鈥檛 want you getting signals for free makes you pay for ESPN, even if you don鈥檛 like sports,鈥� says Handel. 鈥淭hey鈥檙e making money by forcing a combined palate down people鈥檚 throat.鈥�
Aereo, on the other hand, has been celebrating the court鈥檚 decision. CEO and founder Chet Kanojia expressed gratitude and confidence in a
鈥淭oday鈥檚 decision from the Second Circuit Court of Appeals again validates that Aereo鈥檚 technology falls squarely within the law and that鈥檚 a great thing for consumers who want more choice and flexibility in how, when and where they can watch television,鈥� 聽Mr. Kanojia in the press release. 鈥淲e may be a small start-up, but we鈥檝e always believed in standing up and fighting for our consumers.鈥�
The next few days might reveal more about the future of broadcast. It was reported on Monday that Fox executives are 鈥渙n board鈥� with the threat.
For more tech news follow Aimee on聽Twitter,听
