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Supreme Court To Hear Aereo Case
schwit1 writes "The Supreme Court will hear broadcasters' challenge to the legality of startup Aereo, in a case that may not only determine the future of digital streaming of station signals but of network television itself. Without comment, the justices on Friday agreed to accept ABC Television Stations vs. Aereo, in which the television networks are seeking to halt the Barry Diller-backed venture, contending that its offering of streams of station signals in New York and other markets violates the public performance provisions of the Copyright Act. Justice Samuel Alito took no part in the consideration of the petition, the court said, without elaborating. Typically such recusals are for a potential conflict of interest, and Alito has previously said that his family owned stock in the Walt Disney Co."
ABC does not own the content that it broadcasts: it licenses it from the original authors/producers. That license permits it to distribute the content over the airwaves with the payment of a fee.
Think about it this way. Suppose I wrote a play. I would have both (1) a right to prevent others from copying my written work (the script) and (2) a right to prevent others from performing that play if they got a copy of the script. If I permit a playhouse to perform the play, that playhouse can limit the viewing of the licensed performance to those inside the building. Here, ABC is broadcasting its content to the public: it's like a playhouse that has no walls that anyone from the street can enjoy. The playhouse's recourse is to perform the play inside an enclosed building, and ABC's recourse is arguably to distribute its content to those under contract, which it cannot do over the public airwaves.
Now, if ABC owns the original rights in what it broadcasts, the story is different. In that case it can sue as the holder as the copyright, rather than the holder of merely a license. Even then, arguably ABC has granted everyone with access to broadcasted content an implied license to view it, and forward the content to another location as apparently Aereo does. What Aereo would then be doing is merely a "fair use" of that broadcasted content, which is specifically permitted by the copyright statutes.
Aereo is an online streaming service - among its offering, it enables people who stay very far away from NYC (for example, Sydney Australia) to watch TV stations from NYC.
The argument from the teevee stations is that by allowing the streaming of their broadcast content, Aereo is violating the "copyright".
I dunno about you, but I find this argument utterly preposterous !
Legally speaking, true, the way the copyright laws has been stipulated by those "legal experts" is that a copy of whatever copyrighted content (be it sound, image, book, or the combination of any form) can only be used one time, in one place.
Aero addresses this the same way Slingbox does. They argue that by having one physical receiver per active subscribed user, that they are not in violation; this is the same way it would work if you had a Slingbox at home in your NYC apartment, and were traveling in another country. The major difference is that advertisers that you see for NY products on your Slingbox have a reasonable expectation that you will be returning to the regional purchase market where your Slingbox is located at some point in the future, after your trip is over, while there's no similar expectation that you'll go to the roof where the Aereo receivers are located at some point, and then proceed to "buy local".
But c'mon !
People living in Sydney Australia don't get to watch teevee station beaming from NYC anyway - and by allowing them to watch it via online streaming, how the fuck this going to make the NYC teevee station losing money ?
ABC objects to this because they license content, and make money on commercials.
Commercials tend to be related to a regional market (i.e. you are unlikely to have a Big-O tires or Chick-fil-A or Trader Joe's or other locale centric food chain specific to the U.S. in Australia). Because of this, advertisers in the NY market don't see any benefit to ABC stations streamed outside the NY market, since they aren't applicable in remote markets; the thing that bothers ABC about this is ads tend to get paid by region, an by Nielsen ratings for the broadcast station within the region. So they don't get a higher income for their licensed content for their franchisees.
Assuming they could get franchisees in the local markets in Australia to pick up and license ABC programming, then there would be advertising for the local market in the broadcast area, and they'd see income for those programs within that region.
So Aereo breaks their regional marketing models by moving content + advertisements. This also devalues their properties, unless they agree to simultaneous release in various regions, and it erodes their leverage position of getting a franchisee in another region where there is no franchisee, because they are unable to hold them hostage to in demand content, which would (effectively) blackmail the local stations into taking a full content package, rather than one or two programs, and would cause income sharing for regional advertising back to the parent network (ABC).
This effect is, incidentally, the same reason that various networks have been going after cable and dish networks to get a larger programming package payout (with the exception that the cable and dish networks do regional advertising substitution on the fly into program packages, rather than taking all the advertising from the network). This was the basis of the CBS (network)/Time Warner (cable provider) dispute last year: http://www.dailyfinance.com/2013/09/02/cbs-time-warner-resolve-dispute/
If Aereo wins, the networks are going to need to revise their business model, so the most likely outcome is actually that there will be a loss for Aero, with a time period for them and the networks to agree to an implementation of a fetch-model for advertising, at which point Aero doesn't end up actually losing, and the network gets part of