The U.S. Supreme Court dealt what may be a fatal blow to Aereo Inc. and its dream of transforming the television industry, ruling that the Barry Diller-backed Internet startup is violating broadcasters’ copyrights.
The 6-3 ruling is a triumph for broadcast companies, including Walt Disney Co.’s ABC, 21st Century Fox Inc., Comcast Corp.’s NBCUniversal and CBS Corp. They said Aereo was threatening the underpinnings of the industry by selling programming online without paying licensing fees.
Aereo sought to give consumers a new way to watch broadcast TV without buying the packages offered by cable and satellite companies. Customers in 11 cities have been able to watch live and recorded broadcast programs for as little as $8 a month.
It’s also a win for the National Football League and Major League Baseball, which said Aereo is exploiting their copyrighted telecasts. The NFL told the court that Aereo’s legal arguments would let the company provide distant signals as well as local ones, so that customers could watch games from around the country without compensating the league.
Justice Stephen Breyer wrote the court’s majority opinion. Justices Antonin Scalia, Clarence Thomas and Samuel Alito dissented.
Aereo contended that a ruling against the company would imperil cloud computing, the business of storing videos and other content for customers on remote servers. The majority today said the ruling was a limited one that wouldn’t affect cloud computing
© Copyright 2014 Bloomberg News. All rights reserved.