Financial News

  • 25 June 2014, 22:12

TV Start-Up Aereo Loses US Supreme Court Case

The US Supreme Court has ruled that internet TV start-up Aereo is not allowed to stream programmes off the airwaves to its subscribers.

In a 6-3 decision, the justices said Aereo was infringing broadcasters' copyright.

The outcome casts doubt on the future of the start-up, which was founded by an Indian-born entrepreneur.

It is also a major victory for the TV broadcasting giants, whose lucrative retransmission fees it preserves.

Justice Stephen Breyer said in the majority opinion the ruling should not affect "cloud" computing services, such as Dropbox and Google Drive, which allow users to store copyrighted content remotely.

Justices Antonin Scalia, Samuel Alito and Clarence Thomas dissented.

Analysts said a win for Aereo would have been as ground-breaking as the 1984 Betamax video ruling, which allowed consumers to record programming.

Under US copyright law, anyone with an old-fashioned television antenna can watch - without charge - networks transmitted over publicly owned airwaves.

But these days such free-to-air programming is bundled along with hundreds of channels, which most people access through cable and satellite television subscriptions.

Aereo uses thousands of coin-sized antenna at its data centres to capture the networks' signals and present that content to subscribers for a fee of as little as $8 a month.

The start-up's users can "rent" one of these antenna to stream the content to their computer, phone or tablet.

Aereo said there was not much difference to tuning in to a show using an old-fashioned antenna and then recording it on a VCR or DVR.

But networks such as ABC, CBS, NBC and Fox argued that if cable and satellite firms must pay for their programming then Aereo should, too.

On Wednesday, the Supreme Court agreed with their argument.

The majority opinion found that Aereo is bound by federal law which bans the "public airing", or rebroadcast, of network content without permission.

Broadcasters had threatened to withdraw their programming from the airwaves and rely only on cable and satellite in the event that they lost.