OT - Aereo killed by Supreme Court

Submitted by VectorVictor05 on June 25th, 2014 at 2:08 PM

LINK

Chalk a win up for CBS, NBC, ABC, FOX.  I'm definitely on the fence with the legal arguments in this case, even though it's hard for me to feel bad for any company (broadcast, provider, etc.) that is responsible for the insane price of cable TV.

The Aereo business model was cool though, and I REALLY hope this decision doesn't halt the movement towards a-la-carte TV options and start-ups focused on internet TV options.

Also, for those not familiar with Aereo (it was only in maybe 10 cities I think).

Aereo explained

Comments

BiSB

June 25th, 2014 at 2:17 PM ^

Is the best possible example of how a party can have the better legal argument, and can win the case, and yet still be a flaming bag of turd.

Mmmm Hmmm

June 25th, 2014 at 2:18 PM ^

Generally speaking, producers of content who are doing so to make money will get their revenue stream one way or another. The question is what is tolerable as a revenue stream: is it being forced to watch commercials/fast forward through them? Is it web ads or popups on YouTube? Is it a subscription service like Netflix or movie channels? Is it a hybrid like basic cable? Something else that generates the $$$? Any attempt to cut off a revenue stream, even inadvertent (I'm sure Aereo's primary goal wasn't sticking it to the networks, though that's what their untracked viewers allegedly threatened to do) will be met with resistance or moving to another model. Personally, except for the 500th TV timeout during a football game or in the last 3 minutes of a basketball game, commercials don't bug me, but pop-ups, web ads, and (to a certain extent) subscription services.

Long-winded way of saying that I'm fine with the status quo of network TV and thus happy with the result.

VectorVictor05

June 25th, 2014 at 2:45 PM ^

Content producers will and should make money off their content, totally agreed.  I just hope that the powerful producers / providers of content don't fight so hard against anything other than the status-quo that revoltionary products/services designed to make consumer life better have no shot from the jump because they can't afford legal battles.  A-la-carte entertainment is coming, eventually, and I think most people who are aware of their options are fine with subscription services as a starting point.  I pay for Amazon Prime, Netflix, and Spotify, and feel I get more out of those services than what I pay.  I'm sort of the opposite of you, in that I hate commercials.

The one thing I still need a cable subscription for is sports.  Now, I'm not above borrowing a cable login or an illegal stream (or download) from time to time, but as I said above, producers of content deserve to profit...I suppose...

CalifExile

June 26th, 2014 at 1:14 PM ^

I watched your link to "Aereo explained in 90 seconds." Other than that and the posts to this point, I know nothing about this; I haven't read the opinion or done any other research. With that caveat, it seems likely that the networks wouldn't object to the a la carte delivery from Aereo if Aereo would just pay them like the cable and satellite companies do. Aereo is just trying to get paid for what the networks produced.

WestSider

June 26th, 2014 at 1:31 PM ^

is Syncbak, owned by a Grand Rapids Michigan native. His model, as I understand it, is to send local broadcasts via the internet, and customers pay a small monthly fee, with Syncbak sending royalties to the broadcaster. In fact, Aero's defeat is a major victory for Syncbak, a company that is growing and stood to make major leaps on an Aereo defeat.

CRISPed in the DIAG

June 25th, 2014 at 2:20 PM ^

I don't watch anything on the broadcast networks anyway.  Sports, I guess, when I can't stream it.  The music industry continues to suffer for not adapting to evolving technology and I imagine cable/satellite will suffer the same fate eventually.  I've been off their grid for a couple years.  I watch Netflix and download all other content via Apple TV.  Never been happier.

ypsituckyboy

June 25th, 2014 at 4:10 PM ^

Same here. I had basic cable (mainly for ESPN/B1G Network), DVR/HD, and slow internet access, and it cost me just shy of $100/month (SE Michigan). I was pretty busy at the time and wanted to save a bit of money, so I cancelled cable and went down to only internet service.

I now pay $35/month and get low-end Netflix for a few bucks. Couldn't be happier. Plus, Netflix produces better content than any network has in years (looking at you, House of Cards).

These behemoth networks are just incredibly slow to adapt to what people actually want - more viewer-specific content at a lower price. Some will undoubtedly go extinct within the next decade or so. Evolve or die.

Nothsa

June 25th, 2014 at 6:55 PM ^

at a savings of, well, thousands of dollars. Netflix streaming and discs for family stuff, so the only thing we miss on is sports. I watch football and basketball, and I couldn't justify that expense.

I rarely have any trouble watching any game that I want. In order:

1. I get some network tv over the air with rather lousy digital rabbit ears. As a Michigan resident, BTN and ESPN are the problem, not the solution - I used to always be able to watch ABC regional and national feeds of B10 football over the air. Now it's more likely the game(s) I want won't be available. But, the quality is usually pretty good when I can get it.

2. Bootlegged sports streams. Sometimes crappy resolution and the sleazy ads are the big issue, but It's not difficult to find them for any game I want to watch. I'm guessing the MGoStaff would rather not see any links to such sites in the thread, but that's what Google is for.

3. Friend's house. I do this a couple times in the fall. It costs me a six-pack and some snacks, much of which I'd consume anyway.

4. Bar down the street. Somewhat expensive, but I spend under $50 a month in the fall watching football in the bar (with wife and or kid/s), which includes beer and wings, and is still way under what I'd pay for cable.

VectorVictor05

June 25th, 2014 at 2:57 PM ^

The Aereo argument was that they were not providing a service (like a cable provider - e.g., Comcast), but that they were providing access to equipment.  That equipment was an antenna (one per customer) that was effectivley leased to the customer and kept with all of the other antennas at a warehouse.  They argued that no antenna or TV manufacturer has ever been made to pay fees to broadcast companies, so why should we.

Now, differentiating Aereo from the services/equipment business model of cable and satellite TV providers was where it looks like they couldn't win.  Cable/Satellite providers have had to pay broadcast companies fees since the 90s I think.

vablue

June 25th, 2014 at 2:44 PM ^

At some point someone is going to offer cable without sports in the basic option, or without sports at all. This will make a very big difference in pricing and change everything. This is true in the rest of the Western world and it is only a matter of time until it is true here and someone stands up to ESPN.

That said, I would love to see how much ESPN could make for an online subscription service to their channels. I suspect they would make more than what they get per subscriber from cable TV companies.

ak47

June 25th, 2014 at 3:32 PM ^

What makes you say that? Currently espn gets money from every cable subscriber in the country despite only a tiny portion of those subscribers watching sports on that network, the nfl is on network tv.  If espn is seperated from that they would have to charge incredibly high rates just to break even with future contracts to the people who do watch sports.  They might be able to get away with it but it would most likely be terrible for people who want to watch the sports that do get shown on espn frequently.

vablue

June 25th, 2014 at 4:09 PM ^

Right now ESPN drives cable. Everything else people can either live without or get streamed somewhere else. So while ESPN may not get the highest ratings, they are what keep people attached to cable and thus they get more per subscriber than anything else on the basic cable package. They are what drives your cable prices up the most.

It's the same reason BTN makes crazy money. People, like me, don't watch it often, but it has to be there when I want it or I am getting a new cable company. I had this conversation with comcast inVA quite often in the BTN's early days, and i was told that they heard quite frequently customers dropping service because of no BTN and they quickly signed up to carry it.

People get angry when AMC goes off the air over a pricing dispute. People would leave quickly if the same happened with ESPN. It's why you never hear about ABC in a pricing dispute. But someday someone will challenge it and let folks know just how much ESPN is costing them. It's why ABCFights so hard to keep ESPN on basic cable, they don't want you to know how much it is costing you, especially the casual fan.

ak47

June 25th, 2014 at 5:04 PM ^

I think you overstate the viewership of espn. The number of people who have cable is significantly greater than the number of people who watch sports on espn.  If espn was dropped from basic cable and overall cable prices were lowered and espn was a charge I don't think you would lose tons of cable viewers but espn would lose money.  I think its in both the best interest of cable companies and espn to keep espn on basic cable for the reasons you mentioned but I think espn would struggle more not on basic cable than basic cable would struggle without espn.

Also to your last point I think the reason abc fights to keep espn on basic cable is because that is necessary to keep espn alive, not to keep cable alive.  espn is the leech, not vice versa.

HipsterCat

June 25th, 2014 at 5:45 PM ^

Live sports are really the only reason I stil have cable. ESPN/BTN and to a lesser degree NBCSPORTS and now FOXSPORTS1 so I can watch college football/bball, NFL, MLB, NHL, and NBA.

Most every other show I either DVR and watch at a later point, watch on netflix, or stream/torrent/buy from amazon/google play depending on which is easiest. I'm not gonna keep cable so I can watch pawn stars or deadliest catch or a five hour version of lord of the rings on TNT with all those commercials.

I feel like its much more of a culture shift now where nothing on TV is a must-watch live event anymore, outside of sports. DVRs and streaming services like Hulu or even the websites for most channels stream shows a week after they air, its just too easy to watch stuff when ever you want and not have to rely on cable. Many of my friends all watch game of thrones, but none of us pay for HBO so we never watch it live, people use their parents HBOGO passwords or torrent it like i do.

ak47

June 26th, 2014 at 9:53 AM ^

sports is the only reason you and most people on this blog have cable, that is not a representative sample. According to wikipedia (I know grain of salt, whatever) the top 10 cable providers combine to subscribe over 59 million people (and this number doesn't include dish or direct tv customers, just cable).  ESPN was the number 3 cable network, behind the usa network and disney channel at 2.3 million viewers for primetime viewership in 2012.  I think ESPN actually dropped to sixth in 2013 with an average of 2.05 million. Monday night football is incredibly popular but even still isn't appreciably bigger than walking dead, duck dynasty, or other big cable shows.

Also people always seems to assume if cable is unbundled streaming sites like netflix and hulu will stay the same price, or amc will continue to stream for free on its website.   If these networks lose the funds of basic cable subscriptions everything for online streaming will cost more, you won't be able to stream the walking dead for free anymore.  Cable won't just unbundle in a vacume that doens't impact internet streaming services.

sadeto

June 25th, 2014 at 3:02 PM ^

Interestingly, the dissenting justices, led by Scalia, didn't dissent on legal principle, but rather on the fact that they thought Aereo had identified a "loophole" in the law. 

Yet another business plan built on the presumption that because something is done over the internet, their marketing plan trumps the law. See AirBNB. Love the service, but just because they invent the term "microentrepreneur" doesn't mean laws regulating sole proprietorships in the hospitality industry don't apply. Similarly, because Aereo is using tiny antennae instead of a direct feed, they can keep all of the money from subscribers. Brilliant. 

I'm more impressed by today's unanimous decision to protect cell phone content from warrantless searches. I can't believe they all agreed on that.

wolverine1987

June 25th, 2014 at 4:54 PM ^

Of course they must be regulated, however could we exist without that to "protect" us?

(BTW I'm not being snarky to you, just to the government notion that regulating and charging fees somehow protects us from all those terrible things that can happen in an Uber ride)

gbdub

June 25th, 2014 at 5:23 PM ^

Seriously. I get where the cable / cab companies are coming from: "Hey, it's not fair that we have to pay these fees / follow these ruless and these other guys don't" (of course, my sympathy is somewhat lessened when the companies involved often actively lobbied for the fees and regulations precisely to stifle competition).

But it's unfortunate that the two sides are usually "Screw the greedy old companies!" or "Down with Uber!" instead of what would really be a better answer for both: why not nix some of the regulations that Uber, AirBnB, etc. have proven aren't really necessary in the new information age? That would allow all the companies to coexist and compete fairly against each other, with a net benefit to the consumer. The only people that would hurt would be the regulatory bureaucrats living off tax dollars without really providing a service (which is why it will never change).

sadeto

June 25th, 2014 at 5:41 PM ^

So the 'new information age' has somehow proven we don't 'need' to collect surchages on travel to pay for the infrastructure that supports travel? Has proven that we don't need to regulate the safety and cleanliness of accommodations? That safety isn't an issue in a transit transaction? Please explain, because I'm just not following. Have you ever lived in an environment where accommodation and travel aren't seriously regulated and taxed? If so, please enlighten me as to 1) how great that experience was, and 2) how the 'new information age' somehow proved it to be the correct model. In my limited experience, lack of regulation means that occasionally, people die, usually pretty horrible deaths, or they get sick, robbed, etc. And lack of taxation usually means the infrastructure sucks. Or doesn't even exist. 

sadeto

June 25th, 2014 at 5:28 PM ^

Yeah, like being hit by an uninsured driver while getting an Uber ride. Know how you're covered? Of course you don't, because Uber won't share their policies with cities who have requested copies and won't answer questions directly about insurance scenarios. Why? Because they aren't subject to the laws the rest of us are subject to, because that's not part of their business plan. 

wolverine1987

June 26th, 2014 at 10:22 AM ^

my Uber choice of at least twice per week. How reckless of me to ride in something not blessed by the regulatory gifts of the state.

I'm sorry I can't resist sarcasm, it comes from my generally libertarian leanings on these things. But seriously, I think it's pretty clear in this age of information all the time, that in fact if it ever did become a problem where people were not safe in Uber, et.al, that the companies would actually have to you know, please their customer base, who have many choices of where to go and what to use. And of course, your premise also assumes that we are safer in a cab or regulated hotel room than we are in Uber or Airbnb, which is not really true

joeyb

June 25th, 2014 at 4:17 PM ^

The loophole that Aereo found is based on the fact that the signal was being broadcast for free. ABC could have easily fixed this themselves by preventing the signal from being broadcast over the air, but then they'd lose out on advertising revenue. It was publicly stated that if the SCOTUS didn't rule in their favor that this was plan B. Now, they can have their cake and eat it too.

I wouldn't mind if this really was violating some kind of law or if the law was changed to ban this, but if you go through the steps, you can't find a legal issue with this. The reasoning behind the ruling boils down to the fact that it should be illegal (and I can agree with that), but the fact that it isn't illegal should mean that they have to rule in the favor of Aereo. I can legally buy an antenna and a DVR and host them at my house. I can legally rent an antenna and a DVR and host them at my house. Shouldn't I be legally allowed to rent an antenna and a DVR and have someone else host them for me? Their answer to this is no because they think that it looks like something else that is illegal.

sadeto

June 25th, 2014 at 5:03 PM ^

Yeah, Scalia would agree with you as he basically said SCOTUS is not responsible for plugging loopholes in the law. But I have a hard time reading anything Scalia says objectively as he is the biggest hypocrite on the court. 

I haven't read the decision in full but I don't see how Aereo's rebroadcasting of content and collecting fees isn't a violation of copyright law. I mean, if you follow their logic at an  admittedly superficial level, the cable companies are hosting a direct line from consumers to the broadcasters, so why should they pay fees? 

bluebyyou

June 25th, 2014 at 3:12 PM ^

I'm not surprised at the outcome of this case.  If you don't provide protections for the content provider, what incentive is there to produce content?  

sadeto

June 25th, 2014 at 4:48 PM ^

The box rental charge is a bitch, that's definitely something I would like to see addressed by regulators. How is it I cannot buy a box that can decode the signals of any major cable provider? It's like forcing me to rent my TV from my cable provider. The whole card-based approach was supposed to solve this but that has gone by the wayside. 

ats

June 26th, 2014 at 1:30 AM ^

Legally, you shouldn't have to.  Its just that the cable companies found various ways around the legal requirements.  Technically, you should be able to get a cable card and watch anything you are legally allowed to.  But the cable companies hate that idea and instead apply additional encryption to prevent the cable card standard from being usable. 

 

ak47

June 25th, 2014 at 5:11 PM ^

The rental box is some shit, I'll give you that.  I just don't get the moral loopholes that people must go through to convince themselves that downloading illegally and streaming illegally isn't stealing.  The difference between that and taking a dvd off a shelf is just whether you are likely to get caught, not the actual act.  

ats

June 26th, 2014 at 1:32 AM ^

Except there is not legal simularity between theft and violation of copyright.  In taking a DVD, you are taking a physical property of someone else, depriving them of the use of that property.  In the case of violation of copyright, you are depriving someone of any property.  You are merely making a copy.

TL;DR: there is a reason there is a whole section of the law wrt copyright and that's because laws and legal definitions regarding theft don't apply.

ak47

June 26th, 2014 at 9:59 AM ^

Ok but my point is that illegelly streaming or torrenting is theft, not a violation of copyright laws.  In many cases laws don't have the specific language to necessarily deal with the realities of digital theft so I guess it is somewhwat subjective but illegally torrenting a season of show is still depriving someone of a sale, it may not be 'physical property' per se but stealing a persons identity is still theft so clearly physical property isn't the defining charecteristic of theft.

VectorVictor05

June 26th, 2014 at 12:51 PM ^

Your point on illegal downloading (which I'm not agreeing or disagreeing with) only holds up if the person downloading would otherwise purchase the copyrighted material if the illegal download wasn't an option.  Now, that is definitely the case in some cases, but I've torrented music, shows, and movies in the past that I would never go purchase.  I used it as a way to discover new music or shows based on recommednations from friends or online.  Based on what I liked I would legally download the bands next album or a previous one and pay for it, and that is how I chose to subscribe to HBO.  Now I use Spotify for this and am more than happy to pay the subscription fee.  With new shows (movies are a bit different) I still don't have that option, so I either need to pay for the big cable package or wait until they go to Netflix.  With new movies, I typically pay the $4.99 to rent from Amazon if I really want to see it.

Identify theft is different, since that typically comes with credit card fraud, access to someone's bank accounts where you can steal real money, or true harm to someone's credit.  Me downloading the first season of a show to see if I like it enough to subscribe to that premium channel is different in my mind.

Now, I now full well that there are people just downloading in mass without any intention of paying for similar content later.  But still, a lot of what is downloaded would never be paid for in another manner (either because you can't get it or would never pay for it).  This is where the free marketing element comes in.  Impossible to quantify accurately, but it's a real thing.