In a 6-3 decision today, the Supreme Court of the United States held that Aereo’s “watch” streaming service of television broadcasting channels violated the Copyright Act. The decision is a setback for the start-up, but a victory for television broadcasters, including ABC, CBS, NBC, and Fox, each of which sued the company for copyright infringement. The Court limited its decision to Aereo’s “watch” function which provides programming in almost real-time, as opposed to the site’s “record” function, which allows viewers to watch a program after it airs. The Court specifically noted that it was not addressing how “provisions of the Copyright Act will apply to technologies not before us.” The case now returns to the lower court where a preliminary injunction will be imposed on Aereo’s “watch” service and other issues in the case will be considered.
The case resulted in a significant split in the court. The majority, in finding that Aereo violated the “Transmit Clause” of the Copyright Act, viewed the company as a new-age cable provider and decided it should be treated as such. Under the licensing scheme created by the 1976 amendments to the Copyright Act, cable providers are required to compensate broadcast networks and copyright holders for their works. Aereo can continue to transmit over-the-air broadcast signals to subscribers in real-time, but the decision makes it clear that the company will have to pay broadcasters for the “right” to do so.
In contrast, the dissent, written by Justice Scalia, found that Aereo does not “perform.” The Justice took particular issue with the majority’s comparison of Aereo to a cable provider, stating that Aereo is not a “curator of content.” Moreover, he chastised the majority for providing “no criteria for determining when its cable-TV-lookalike rule applies.”
This round is a definitive win for broadcasters, and while start-ups may be somewhat shy in rolling out new technologies, this is not the end. Stay tuned for the next round of Aereo in the courts and for the next iteration of Aereo-like services to deploy new ways of providing access to broadcast television channels without paying retransmission consent fees.