Since 2012, Chet Kanojia has been building a business, backed by the media mogul Barry Diller, with ambitions to join that cohort. His start-up, Aereo, uses tiny remote antennas to capture broadcast TV signals and store them in the cloud, where consumers can watch them on a device of their choosing — no cable box, no cable bundle and most important, no expensive cable bill.
Instead, consumers pay $8 to $12 a month to watch almost live — there is a delay of a few seconds — and recorded programs from the major broadcast networks and public television. It’s a threat to both the lucrative cable bundle and the networks that receive rich fees for being part of that cable package.
Aereo would give so-called cord cutters the means to assemble a more affordable package of online streaming options like Amazon Prime, Apple TV or Netflix, and still spend a Sunday afternoon watching the N.F.L. and “60 Minutes” immediately afterward. As antenna-driven viewing has dropped and digital consumption has surged, Aereo is a way to put old wine in a new bottle.
It is a crafty workaround to existing regulations, which rides on the Cablevision court ruling in 2008, which held that consumers had the right, through their cable boxes, to record programming. But then, cable companies pay broadcasters billions in so-called retransmission fees while Aereo pays them exactly nothing. (And the case is not just about Aereo — it opens the gate for cable companies or others to build a similar service and skip the billions in payments to the networks.)
The broadcast networks have a technical legal term for this particular innovation — theft — and they have been trying to shut down Aereo from the start.
It all collides on Tuesday, when the Supreme Court will hear the case American Broadcasting Companies v. Aereo. It will be up to the court to decide whether the service is a consumer-friendly reskinning of the broadcast universe or just one more example of an Internet pirate trying to loot copyrighted content. In some senses, the case is as big of a deal as the Betamax ruling in 1984, which allowed consumers to record programming.
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