Aereo shut down by SCoTUS

Today, 6/25/14, the Supreme Court released their verdict [PDF] on the trial of ABC v. Aereo in favor of ABC and other major networks.  At issue was the question of whether live television could be captured out of the air and rebroadcast on the internet for a fee.  This being exactly what Aereo was built to do.

How does television work?

There are three major sets of players in broadcast television.  The content creators are where the shows are filmed.  Disney is an easy example of a content creator between its Disney channels, ESPN and other properties.  Once the shows are created, the rights to air them are purchased by major networks.  Here we're talking about ABC, NBC, CBS, and Fox.  These titans buy the exclusive rights to distribution and sell those rights to local stations around the country.  The local stations are the final player.  They raise money by selling advertising time (commercials) and using that money to pay a network for content.

What about Aereo?

The history of the Aereo case has been a little ridiculous.  Broadcast television signals have traditionally been free.  Anyone with a set of rabbit ears could watch whatever was being broadcast.  At first, Aereo simply put up a single expensive antenna and allowed subscribers to its own service to watch that stream via the internet.  After all, the broadcast was free.  And the internet is free.  So why not glue the two together for a small fee?

An early legal argument was that the people watching on the internet didn't even have their own antennae.  Long story short, Aereo now has a warehouse full of tens of thousands of tiny antennae which are nominally receiving the broadcasts.  When you subscribe to their service you are renting one of these things and getting its signal on your internet device.  I highly doubt that you aren't still watching a stream from the original antenna, but it made some lawyers happy for a while.

Legal history and Judo

The original copyright act gave the holders of a copyright the legal right to determine how their work was distributed.  When all TV was sent through the air all parties were happy with this deal.  Then something called CATV was invented where one well-placed antenna was connected via coaxial cable to hundreds of homes.  This enabled many homes to receive signals they couldn't otherwise get due to geography or other factors.  It was initially found that CATV services were "viewers" and not "performers" because they only enabled the actual viewer to get a better connection.  The Democrat controlled 94th Congress fixed that right up when they amended the Copyright act and added the Transmit Clause.  Now the rights of the copyright holder don't stop at the antenna on your roof, they stop right at your eyeballs.  Anybody or anything that forwards on a copyrighted work is a "performer", and this is where Aereo got hit.

Follow the money

Why does all this matter?  Stations pay networks "retransmission fees".  Aereo doesn't pay anyone anything.  If they prevailed in court then the whole money pyramid would have fallen apart.  Local stations might not have paid for content and instead found some free way to acquire it.  All protected works that could be captured by camera or other device would enter into the public domain without payment to or even consent of the copyright holder.  People don't pay for things they don't need to pay for, so a lot of money would have been sucked out of the whole TV industry as people got squirrely trying to find their free TV.

What I say

I have been pulling for Aereo all along the way.  I'm a huge fan of technology and innovation and thought that Aereo might have something worthwhile with their model.  If something was going to be free anyways, it should be free however I want to receive it, right?  One of my goals in writing this blog was to force myself into thinking about these things more critically.  I can understand the calls of artists and entertainment workers who say, "If someone is making money off of my work, then I want a cut."  The warm glow of appreciation doesn't pay the rent.  

Innovation and entrepreneurship are awesome.  Technology for the sake of technology though, that's usually dumb.  The "pain" Aereo is addressing is that I can't watch local New York TV while I'm in Texas.  That's not a thing I'm entitled to.  My desire to have all the things that I want is not reason enough to jeopardize the livelihoods of the hundreds of thousands of people who make TV possible.  If I put out a performance with a copyright, I feel justified in saying that nobody else can profit from it without my say so.  If you want to redistribute it for free, have at it.  But if you're going to make $97 million off of my work you're going to give me some of that.

I think there's a market for a home product that takes broadcast signals and streams them from your home computer.  Maybe Aereo will evolve that way.  As much as I hate to say it, I think I side with big business on this one.  Congress clearly defined the old Community Access Television (CATV) services as "performing" the works they were redistributing and that ruling stuck with the cable companies that followed.  Aereo is effectively one giant CATV service, and those are the rules they'll have to play by.