January 14, 2014

The Cloud & TV Networks Square Off; Where Do Filmmakers Stand on Aereo Supreme Court Case?

aereo business model supreme courtOn Friday, the Supreme Court agreed to hear a case brought by ABC and other broadcasters against a subscription startup called Aereo that lets users stream live tv with a tiny antenna and Cloud DVR. If the outcome goes the way of the broadcasters, will growing cloud technology stop in its tracks? If it goes the other way, will original programming go down as cable operators that decide not to pay retransmission fees when they don’t have to? Hear the two sides, and weigh in on which way the sky will fall, below.

In 2008, The US Second Circuit Court of Appeals reversed the first decision in The Cartoon Network vs Cablevision, contending that consumers had a right to record over-the-air television with DVR. The Networks have been royally pissed off since then.

Now, the successful launch of Aereo in 2012, which today offers a monthly subscription of live network content without paying networks a dime, has really got their goat. Aereo features streams from CBS, NBC, FOX, ABC, CW, PBS, Univision, and more, for around $8 (depending on your area) a month -- most of which can be streamed near-to-live with a few seconds delay.

While the Supreme Court ruled not to revisit the Cablevision ruling back in 2008, last week they agreed to hear American Broadcasting Companies, Inc., et al., v. Aereo, Inc. The results of this court ruling could have further reaching effects than just the future of Aereo. According to what broadcasters told Variety, this is what’s at stake for their side:

Aereo threatens to undercut the growing stream of revenue coming from retransmission fees, estimated at more than $3 billion annually, money broadcasters say is more important in helping to finance original programming. If Aereo continues, broadcasters say, cable and satellite operators will see little need to pay those retransmission fees and can merely develop their own streaming services.

cablevision court of appeals decision cartoon networkLast year, when the launch of Aereo was abuzz, COO of News Corp went so far as to say Fox network would go on a subscription platform if the company didn’t stop. Suffice it to say, broadcasters would love to make Aereo and other similar future start-ups disappear. On the other end, Aereo believes that the broadcasters are trying to use this court case as a way to attack the entire cloud computing and storage industry and get a different outcome on the Cablevision appeal. Aereo CEO and Founder Chet Kanojia announced their stance on the Aereo blog:

This case is critically important not only to Aereo, but to the entire cloud computing and cloud storage industry. The landmark Second Circuit decision in Cablevision provided much needed clarity for the cloud industry and as a result, helped foster massive investment, growth and innovation in the sector…The broadcasters are asking the Court to deny consumers the ability to use the cloud to access a more modern-day television antenna and DVR. If the broadcasters succeed, the consequences to consumers and the cloud industry are chilling.

As filmmakers, we don’t want giant broadcasting corporations dictating what future technology we can use to reach our audiences. At the same time, as filmmakers we hope for a future of commissioned original programming. What do you think about the upcoming Supreme court case? What is the best outcome for filmmakers? If you were one of the Justices, what would be your statement?

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