In a ruling that has major implications for the television industry at large, the Supreme Court ruled today against Aereo, the company that uses thousands of tiny antennas to record TV broadcasts and stream contact to subscribers almost-live (after a few seconds' delay) for a small monthly fee.
In its 6-3 decision, the Supreme Court said that Aereo's practice violates copyright laws and is essentially equivalent to stealing their programming, delivering a win to the major television networks and imperiling the business viability of the two-year old start-up.
As we speculated earlier this month, an Aereo win could have upset the entire television paradigm, jeopardizing the $3.3 billion in retransmission fees that broadcasters rake in (Aereo does not pay those fees) and potentially spurring the broadcast networks to wall off their content by transforming into cable companies. In arguments before the court in April, lawyers for the broadcasters said that their clients would be forced to do just that should the eventual decision favor Aereo.
"Aereo is not simply an equipment provider," the court concluded in its ruling, written by Justice Stephen Breyer and joined by Chief Justice John Roberts and Justices Anthony Kennedy, Ruth Bader Ginsburg, Sonia Sotomayor and Elana Kagan. "Aereo sells a service that allows subscribers to watch television programs, many of which are copyrighted, virtually as they are being broadcast."
In a dissenting opinion, Judge Antonin Scalia compared Aereo to a service that allows customers to make photocopies:
"One customer might copy his 10-year-old’s drawings — a perfectly lawful thing to do — while another might duplicate a famous artist’s copyrighted photographs — a use clearly prohibited by [the Copyright Act]. Either way, the customer chooses the content and activates the copying function; the photocopier does nothing except in response to the customer’s commands. Because the shop plays no role in selecting the content, it cannot be held directly liable when a customer makes an infringing copy."
SAG-AFTRA also weighed in on the decision with a statement, saying that "the Court properly limited the scope of the decision so that cloud services and other technological innovations are neither inhibited nor limited. This decision gives the creative community greater confidence that copyright law cannot be so simply evaded and restores the proper balance to the system."