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Aereo Now Claims It's a Cable Company, Reveals it Has Very Few CustomersJason Mick (Blog) - July 22, 2014
From Daily Tech
Service had next to no subscribers as it struggled to sell customers on its role as a pricey cloud DVR for public TV
Aereo -- a once-promising New York City startup owned by InterActiveCorp/IAC (IACI), the internet company led by former broadcast executive Barry Charles Diller -- crashed and burned hard last month when the U.S. Supreme Court ruled that its business model was illegal.
The company had provided cloud DVR services which allowed customers to record and view -- at their convenience -- publicly broadcast TV. Aereo insisted this didn't constitute "reselling" or "rebroadcasting" rival TV broadcasters' work. However, that defense was weakened by the fact that Aereo's rates came at a significant premium ($8 USD/month for ~20 GB (20 hours of standard definition video)) over similar cloud DVR/storage services (indicating part of the value was in the ability to intercept broadcast content).
Aereo tried to strengthen its case by building a highly specialized backend with thousands of individual dime-sized antennas -- one per user. It argued it was behaving no differently than any other viewer, and was simply providing convenience to its users. The argument didn't impress in the end, though.
In the aftermath of the Aereo's collapse, paperwork filed from the U.S. Copyright Office indicates it was pretty much a moot point, even if Aereo had won. Even before it lost, Aereo appeared to see the writing on the wall and began filing requests with the U.S. Copyright Office to be treated as a cable broadcaster. However, the outlook revealed was grim. According to the filing, first reported by Re/Code, it had only 77,596 subscribers at the end of 2013.
Its top 3 markets were:
- New York City, N.Y. -- 27,000
- Boston, Mass. -- 12,000
- Atlanta, Geor. -- 10,000
Under the Second Circuit's precedents, Aereo was a provider of technology and equipment with respect to the near-live transmissions at issue in the preliminary injunction appeal. After the Supreme Court's decision, Aereo is a cable system with respect to those transmissions.
Internet retransmissions of broadcast television fall outside the scope of the Section 111 license.
Reuters reports that the broadcast companies who sued Aereo called the scheme "astonishing". They've asked a federal judge and the Copyright Office to summarily strike it down.
Even if Aereo were able to unfathomably survive, it looks like its business model is next to dead given the subscriber numbers. Unsurprisingly it's reportedly exploring other options, including using its dime-size antennas in small set-top budget DVRs.
Sources: RE/Code, Aereo [PDF, 1], [PDF, 2], The Verge
Aereo loses to broadcasters in Supreme Court fight for its lifeFrom The Verge
By Jacob Kastrenakes on
The Supreme Court struck a dramatic blow against Aereo today in a ruling that puts the TV streaming service as it currently exists on its deathbed. In a 6–3 ruling, the court found that Aereo's service violates the Copyright Act by playing back recordings of broadcasters' TV shows — even though it legally captures those shows over the air and obtains individual copies for each viewer. Aereo had argued that it was merely providing technology that its subscribers were renting in order to watch TV, positing that the viewers were responsible for playing back those recordings.
"Insofar as there are differences, those differences concern not the nature of the service that Aereo provides so much as the technological manner in which it provides the service," the ruling reads. "We conclude that those differences are not adequate to place Aereo’s activities outside the scope of the [Copyright] Act."
That's a huge issue for Aereo, as its current business has just been found illegal. Aereo will likely have to pay licensing fees to broadcasters if it wants to continue operating, but that's if Aereo can afford them. Certainly, it would be difficult to pay those fees and continue offering its service, which costs $8 per month, at such a low price.
Aereo may choose to reinvent itself, but up to this point it's said that a Supreme Court ruling against it would essentially mean the end. "If it’s a total straight-up loss," Aereo CEO Chet Kanojia told The Verge earlier this year, "then it’s dead. We’re done."
"Today’s decision by the United States Supreme Court is a massive setback for the American consumer," Kanojia says in a statement following the ruling. "We’ve said all along that we worked diligently to create a technology that complies with the law, but today’s decision clearly states that how the technology works does not matter. This sends a chilling message to the technology industry."