Aereo

David Rutan
J.D. Candidate 2016, UCI Law  

In 2014, the Supreme Court held that Aereo violated the Copyright Act of 1976 by transmitting broadcasts to subscribers through a subscription-based service over the Internet where Aereo dedicated one antenna to each user for a show that a user would want to watch virtually live. The decision has been criticized because of the effects on emerging technologies, particularly cloud storage. The majority in Aereo assured the public that the decision would not affect cloud storage, but Justice Scalia was sceptical of the assurance in his decision. The Court held that Aereo transmitted television programs online “at about the same time” as the programs were shown on broadcast television, and by doing so, the company violated 17 U.S.C. § 106(4). § 106(4) provides the copyright owner the exclusive privilege to “perform the copyrighted work publicly.”

Aereo’s business consisted of transmitting broadcast television shows to subscribers. Aereo’s self-proclaimed mission was to “build a better television experience” because the traditional television options “were cumbersome and didn’t fit our increasingly mobile lifestyle.” Aereo subscribers would visit the company’s website and choose a show they want to watch. Then, Aereo would dedicate one of a plethora of dime-sized antennas to that subscriber for the entirely of the show. By dedicating one antenna to a specific subscriber, some believed this was virtually the same as if that subscriber was using his own antenna to get the show. If the Court had accepted this logic, the business model of Aereo probably would not have infringed on the Copyright Act because a television viewer does not infringe on copyrights by using a personal antenna.. Next, that show was saved in a user-specific folder on Aereo’s website. Finally, after several seconds, Aereo streamed the show to the subscriber.

The Court held that Aereo was performing the work. The Court rejected the notion that Aereo acted like a copy shop that allowed subscribers to choose the content to be streamed. Instead, the Court held that it was a performance because of “the many similarities between Aereo and cable companies.” The performance was also public. The Court rejected Aereo’s argument that the transmissions were not public because each subscriber had an assigned antenna. The Court dismissed this argument and held that each subscriber is “the public.” Within six months of the Aereo decision, Aereo filed for Chapter 11 bankruptcy. While Aereo decisively prohibited Aereo’s business model, the decision also left many questions unanswered about emerging technologies and copyright violations. The Court stated that cloud-based services are not affected by the decision. However, in his dissent, Justice Scalia states that despite this statement by the majority, “[the Court] cannot deliver on that promise given the imprecision of its result-driven rule.” Scalia took issue with the majority’s analysis, which rested on the principle that any product that is very similar to cable companies would violate the Copyright Act.

The Court’s decision in Aereo will certainly have an effect on future technologies as Americans move away from traditional television viewing habits. While media consumption from television has declined every year from 2009-2013, media consumption through mobile devices has increased from 4% of the means to receive media to 20%. New technologies will emerge that challenge the Court’s cable company similarity test that it developed in Aereo. How future cases interpret the Aereo decision could have a massive impact on the future of television.

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