Aereo Loses Supreme Court Battle Against Major Broadcasting Companies

The Justices ruled that the startup streaming service violates copyright laws.

Image via Associated Press

Image via Associated Press

An Internet startup with offices in South Boston took a blow on Wednesday after the Supreme Judicial Court ruled that it violated the rights of major television broadcasting companies by taking their content and distributing it to customers for a small fee.

In a 6-3 vote, the Justices said Aereo, which collects broadcast TV signals using tiny remote antennas and allows its customers to stream content on their smartphones, tablets, and computers, or save shows using the company’s cloud-based DVR system, stepped its bounds.

“For a monthly fee, Aereo offers subscribers broadcast television programming over the Internet, virtually as the programming is being broadcast. Much of this programming is made up of copyrighted works. Aereo neither owns the copyright in those works nor holds a license from the copyright owners to perform those works publicly,” the court wrote.

When asking the question of whether Aereo infringes that exclusive right by selling content to its customers, the court ruled “it does.”

Major broadcasting companies like ABC, NBC, CBS, and Fox had argued that by plucking information from their airwaves, Aereo was essentially violating the Copyright Act. They said the retransmission of that content was a form of “public performance” that infringed copyright laws.

Aereo founder and CEO Chet Kanojia, a Newton resident with a graduate degree from Northeastern University said in an interview with the New York Times in 2012, that his intention was never to compete with the television companies, but rather offer a less-expensive option to watching programming. “The goal is not to recreate the cable companies but to create an alternative for people who are coming into television from the Net side first,” he said. “There’s an emerging population of people who have never signed up for traditional cable packages, who are used to customizing their own TV experience.”

That idea didn’t sit well with the 17 companies that sued Aereo, whose fight later landed in U.S. Supreme Court.

The court’s decision on Wednesday was met with praise from television broadcasters. “The [National Association of Broadcaster] is pleased the Supreme Court has upheld the concept of copyright protection that is enshrined in the Constitution by standing with free and local television,” said NAB President and CEO Gordon Smith in a statement. “Aereo characterized our lawsuit as an attack on innovation; that claim is demonstrably false. Broadcasters embrace innovation every day, as evidenced by our leadership in HDTV, social media, mobile apps, user-generated content, along with network TV-backed ventures like Hulu.”

Kanojia said today’s decision by the Supreme Court is a massive setback for the American consumer. “We’ve said all along that we worked diligently to create a technology that complies with the law, but today’s decision clearly states that how the technology works does not matter. This sends a chilling message to the technology industry,” he said. “We are disappointed in the outcome, but our work is not done. We will continue to fight for our consumers and fight to create innovative technologies that have a meaningful and positive impact on our world.”

The court’s decision can be read below:

Aereo Ruling