NEW YORK (AP) — Television broadcasters face off at the U.S. Supreme Court on Tuesday with Aereo, a company that offers live TV over the Internet. The case hinges on whether the service constitutes a public performance in violation of copyright law.
Broadcasters want the service shut down. But Aereo argues that its service is legal because each subscriber is assigned an individual antenna to record and watch broadcasts on various gadgets for a monthly fee. Aereo says its service is similar to setting up an antenna and a digital video recorder at home. The only difference, the company says: All the equipment is housed at Aereo's data centers. Cable and satellite TV companies typically pay broadcasters to include TV stations on customers' lineups. Broadcasters believe Aereo ought to as well, arguing that Aereo built the individual antennas specifically to skirt copyright law.
Millions of dollars are at stake: If people ditch cable service for Aereo, broadcasters would be able to charge cable companies less.
The case comes as people are cancelling pay-TV subscriptions in increasing numbers and turning to Internet services such as Netflix. A service that offers live television could make such cord cutting even more palatable. A study last year from GfK estimated that 19 percent of U.S. TV households had broadcast-only reception, up from 14 percent in 2010. Those figures include cord cutters and those who have never had cable, something Aereo says is common among those under 30.
Aereo founder and CEO Chet Kanojia spoke to The Associated Press before Tuesday's Supreme Court hearing. Questions and answers have been edited for length.
Q: Why are you confident about your prospects?
A: Nobody has disputed the idea that a consumer can have an antenna. Nobody disputes that a consumer can make personal recordings. The dispute seems to be about where the equipment can be installed.
Q: As a customer, I have a dedicated antenna that receives my signal. But when I record something, isn't that going on a group recorder, constituting a public performance?
A: But it's your unique file. So if 30,000 people in New York recorded a particular show, that's 30,000 unique copies that are different for each individual. The antenna is sitting dead until you log in and say 'I want to watch NBC.' That's when it first tunes into NBC.
Q: To what degree did you design everything — your marketing and the antennas — with a possible lawsuit in mind?
A: We expected controversy. We set out to build a highly, highly compliant legal company. We were proud of the fact that we hired the best possible lawyers. We had the best possible advisers.
Q: If you expand abroad, will you face these legal issues country by country?
A: That's why we haven't done anything yet. I don't think we understand enough. I think in Europe the situation is reasonably becoming clear. There have been some recent court cases around the remote DVRs and things like that which have gone the right way. The regulatory environment is a lot simpler in most of these countries because nobody objects to the idea of an antenna.
Q: You've said you have no Plan B should you lose. So is the idea that you turn out the lights and leave or would you try to evolve into something else?
A: The technology itself has tremendous value. The fact that we've created this cloud-based system at a cost point and it works is going to have a lot of value to a lot of people.
Broadcasters want the service shut down. But Aereo argues that its service is legal because each subscriber is assigned an individual antenna to record and watch broadcasts on various gadgets for a monthly fee. Aereo says its service is similar to setting up an antenna and a digital video recorder at home. The only difference, the company says: All the equipment is housed at Aereo's data centers. Cable and satellite TV companies typically pay broadcasters to include TV stations on customers' lineups. Broadcasters believe Aereo ought to as well, arguing that Aereo built the individual antennas specifically to skirt copyright law.
Millions of dollars are at stake: If people ditch cable service for Aereo, broadcasters would be able to charge cable companies less.
The case comes as people are cancelling pay-TV subscriptions in increasing numbers and turning to Internet services such as Netflix. A service that offers live television could make such cord cutting even more palatable. A study last year from GfK estimated that 19 percent of U.S. TV households had broadcast-only reception, up from 14 percent in 2010. Those figures include cord cutters and those who have never had cable, something Aereo says is common among those under 30.
Aereo founder and CEO Chet Kanojia spoke to The Associated Press before Tuesday's Supreme Court hearing. Questions and answers have been edited for length.
Q: Why are you confident about your prospects?
A: Nobody has disputed the idea that a consumer can have an antenna. Nobody disputes that a consumer can make personal recordings. The dispute seems to be about where the equipment can be installed.
Q: As a customer, I have a dedicated antenna that receives my signal. But when I record something, isn't that going on a group recorder, constituting a public performance?
A: But it's your unique file. So if 30,000 people in New York recorded a particular show, that's 30,000 unique copies that are different for each individual. The antenna is sitting dead until you log in and say 'I want to watch NBC.' That's when it first tunes into NBC.
Q: To what degree did you design everything — your marketing and the antennas — with a possible lawsuit in mind?
A: We expected controversy. We set out to build a highly, highly compliant legal company. We were proud of the fact that we hired the best possible lawyers. We had the best possible advisers.
Q: If you expand abroad, will you face these legal issues country by country?
A: That's why we haven't done anything yet. I don't think we understand enough. I think in Europe the situation is reasonably becoming clear. There have been some recent court cases around the remote DVRs and things like that which have gone the right way. The regulatory environment is a lot simpler in most of these countries because nobody objects to the idea of an antenna.
Q: You've said you have no Plan B should you lose. So is the idea that you turn out the lights and leave or would you try to evolve into something else?
A: The technology itself has tremendous value. The fact that we've created this cloud-based system at a cost point and it works is going to have a lot of value to a lot of people.