Copyright Maximalists' Incredible Sense Of Entitlement: If It Challenges The Biz Model We Chose, It Must Be Illegal

from the incredible-sense-of-entitlement dept

Having followed the copyright industry for so long, I'm often shocked at the incredible sense of entitlement of those who argue strictly for greater and greater copyright powers. One thing we've discussed in the past is that the gatekeepers (and it always is the gatekeepers) have an issue of constantly overvaluing the content and undervaluing the service. That is, any time they see a new service come along that the public really likes, they insist that all or nearly all of the value must be attributable to the content and not the service. Thus, they will always argue that "the service" is somehow ripping them off. We've seen it over and over again, from ringtone royalties to Guitar Hero to Pandora and others. Every time the story is the same: these other companies are making some money (even if they already pay us) and therefore we're getting screwed. If anyone else is making any money, then the copyright holders start screaming about how it's completely and totally unfair.

In their minds, the value of the service is meaningless. The fact that they were unable to provide such services directly themselves gets totally ignored. They just insist that 100% of the value is the content, and thus they need to get more money. Nevermind the fact that companies like Pandora already pay nearly all of their revenue to the copyright holders. There's always more blood to be squeezed from that stone, even if it means killing the golden goose (to mix a few parables).

Two recent stories illustrate this extreme entitlement, and total dismissal of the value of anyone else, perfectly. Let's start with the Aereo case, which was heard today at the Supreme Court. It will be some time before the court rules, but check out this quote from Gordon Smith, the president of the National Association of Broadcasters on why he believes Aereo is breaking the law:

“Quite simply, Aereo takes copyrighted material, profits from it and does so without compensating copyright holders,” said Gordon Smith, the president of the National Association of Broadcasters.

Of course, that's misleading in the extreme for a variety of reasons. First of all, there are lots of areas where it's perfectly legal to profit from copyrighted materials without compensating copyright holders. Used book stores and used record stores (back when such things existed) are a perfect example. Fair use is another. The point is: just because someone is making a profit does not mean that the copyright holders have to get paid. That's never been the case. In fact, it's the same fallacy described above. People are flocking to Aereo because it provides a better service than the cable companies. But the broadcasters ignore all of that and insist all of the value must come from the content itself.

That brings us to the second story highlighting this, which involves comments over in the EU concerning the legality of reselling digital media. Not surprisingly, the record labels, represented by the IFPI and BPI, are 100% against this sort of thing for no logical reason, other than that consumers might actually prefer such a system. They specifically highlight that the quality and convenience of digital resales are too good, and that might upset the business model the record labels have chosen. The argument echoes the labels' argument against ReDigi in the US, a service that allows people to resell digital content that has been shut down in the US.

Again, the focus here has nothing to do with what's right or what's best for the public. In fact, the entire argument appears to be "fuck the public, we need more money." It completely ignores multiple studies that have shown that a thriving used goods market increases the value of the original market. It ignores the idea that making things easier and better for consumers is a good thing. Instead, it's all about overvaluing the content and undervaluing everything else.

This all goes back to a point we made years ago: industries that have embraced copyright for the entirety of their business model have set copyright up as a crutch on which they lean. Rather than exercising the rest of their body, finding all sorts of other good business models that allow them to improve the experience for customers, they just keep leaning on that crutch and insist it's entirely necessary for them to live. And thus, those other muscles atrophy and wither away. So now that the world is changing and innovating, and others are demonstrating lots of great ways to better serve the public, the copyright maximalists are insisting it's all impossible. They need that damn crutch, and anything else is "piracy." They only have themselves to blame, of course. For decades, people have been explaining to them and showing them how to build better services, how to offer better experiences for everyone, while still making money. And, all they do is lean more on that old crutch and insist it's the only possible way to walk.

It's a massive sense of entitlement, in which they appear to have no self-awareness that they're actively advocating for a world in which the public is worse off.

Filed Under: business models, content, copyright, crutch, entitlement, value
Companies: aereo, nab, pandora, redigi

Why Is The US Gov't Arguing In The Supreme Court To Reshape The Internet The Way Broadcasters Want It?

from the smacks-of-soft-corruption dept

This is hardly a surprise, given that we'd already covered the brief submitted by the US Solicitor General's office in support of the broadcasters and against Aereo, but the Supreme Court has agreed to allow the office to argue in court tomorrow in the Aereo case. Again, not surprisingly, the Solicitor General's office tends to have a lot of sway with the Supreme Court, so this is effectively the US government tipping the scales of justice in favor of Hollywood and against the internet, where the impact of a ruling against Aereo may be quite severe.

The Solicitor General's office has argued that a ruling for Hollywood won't impact the cloud, basically because they say so. But, as we've discussed, its argument there is truly bizarre, in that it just asserts that such a ruling "need not" impact the cloud, and never bothers to address the many reasons it will absolutely impact the cloud. In fact, many of the other briefs in support of the broadcasters' position insist that the broadcasters should win because all those other companies can "just get a license." Now think about that for a second. Imagine using your Dropbox if nothing can be uploaded until Dropbox confirms it has a license for the work. Right. That's not going to work.

And, of course, this is what this case is all about. Broadcasters have always hated the internet, because they can't control it. Broadcasters have spent decades honing a business model that is based around a "broadcast" model. That is, they send out a signal, and the masses "consume" it. The internet has shaken that up in so many ways, because the internet is not a broadcast system. It's a communications system that allows anyone to communicate with anyone. For decades now, broadcasters have worked hard to reshape the internet into a better "broadcast" medium. That's what nearly every copyright challenge is about. Giving more control to the big broadcasters, while making it harder for the everyday internet user to do anything online without getting it shut down.

Stifling cloud computing by pushing for every bit of content -- even those totally in control of an individual user -- to be "licensed" is just the latest such attempt to stifle the internet as a communications medium of the people, and to push it to be a broadcast medium for a few giant entertainment companies.

So, really, the big question is why anyone thinks it's appropriate at all for the US government to weigh in here. We've already noted the significant conflict of interest in that the Solicitor General himself, Donald Verrilli, spent many years as Hollywood's top lawyer, even arguing in the Supreme Court on some key copyright cases. And while he recused himself from all of this, it at least smacks of the "too cozy" relationship between Hollywood and the US government. Also recused is Verrilli's top deputy who, prior to rejoining the government a few years ago, was a top lawyer at Jenner & Block, the very same law firm representing the broadcasters in this case. Yes, they've recused themselves, but given that it's rather bizarre that the Solicitor General's office decided to get involved in this case in the first place, it certainly raises eyebrows about the reasons.

This is a dispute where the US government really has no role joining in the proceedings, but it has decided to assert itself, solely on the side of broadcasters and against the internet. Seems like an odd choice for an administration that has claimed to be so internet savvy.

Filed Under: broadcasters, cloud computing, copyright, donald verrilli, public performance, solicitor general
Companies: aereo, jenner and block

Those Who Insist Aereo Ruling Won't Impact Cloud Computing Don't Seem To Understand Cloud Computing

from the or-copyright-law,-for-that-matter dept

A few weeks ago, we wrote about how the Aereo case, which will be heard by the Supreme Court in a few weeks, is likely to have a huge impact on the future of cloud computing, and went into detail to explain why. The primary issue is that, under copyright law, what Aereo is doing is effectively indistinguishable from what most cloud computing services do. However, a number of folks who really seem to dislike Aereo continually insist that the case will have no impact whatsoever on cloud computing. Variety's Todd Spangler recently wrote a typical version of this argument, basically waving off the issue based on the idea that Aereo more or less feels different from Dropbox. But that fundamentally ignores the actual copyright issues at stake.

Matt Schruers has a blog post up at the Project Disco blog pointing out why this "cloud denialism" by the anti-Aereo crowd is both dangerous and misleading. It includes the money line that a bunch of folks have been quoting:

The only unifying characteristic I’ve discerned among the deniers is that none of them are actually in the business of providing cloud services.

Indeed, a bunch of companies and organizations that actually are involved in cloud computing businesses have weighed in on the case, warning how a ruling against Aereo might create serious problems for their businesses. The issue, again, is very narrowly focused on what is a "public" performance when transmitting a single copy of a file to an individual in their home. The problem with the broadcasters' position is that they want to declare that transmitting multiple copies of a single work magically makes something "public," even if each transmission is a unique copy that is transmitted only to the requesting subscriber. But that's the same way cloud computing works, and it would create a massive headache.

And, honestly, while Schruers has that wonderfully quotable line above, what's much more scary about the "cloud denialists" is they fundamentally don't seem to understand copyright law, and are trying to twist it because they just hate what Aereo is doing. I am reminded of law professor Eric Goldman's comment from a few years ago, that there are really two different copyright laws -- normal copyright law and "file sharing copyright law," where what's actually stated in copyright law gets thrown out the window because OMG EVIL PIRATES! As Goldman points out, "it's a mistake to think those two legal doctrines are closely related."

As Schruers notes in his piece, it seems pretty clear that everyone recognizes Aereo is architected to create a private performance, not a public one, it's just that folks on the copyright maximalist side of the scale don't like that, and that leads them to want to just pretend the law says something different than it does:

Ultimately, when Spangler and others deniers dismiss the cloud-related issues and condemn Aereo’s complex technology as “a Rube Goldberg-like contrivance,” it strikes me as an implicit concession: ‘yes, Aereo’s technology is indeed designed to facilitate private performances, but since Aereo could also be engineered other ways, where the performance would be public, we’re just going to expand the definition of what’s public in order to sweep in Aereo too.’

This is a chillingly activist interpretation of copyright law. The boundary between public performances and private performances determines what copyright does and does not regulate. It’s why you don’t need a license to sing in the shower, but you do to sing on stage. It’s why you don’t need a license to put your music collection in the cloud, but you do if you want to launch a commercial streaming service. Redrawing that boundary in real time to ensure that Aereo doesn’t disrupt the way consumers now receive free over-the-air television is not a prescription for economic success.

Of course, this sort of issue has been present throughout the Aereo case. Pretty much everyone concedes that Aereo's technical setup is insane -- but it's insane because that's what the law requires to stay within its bounds. We've seen many, as described above, try to use this against Aereo. Multiple comments on various Aereo posts have people insisting that the convoluted setup of Aereo's technology (individual antenna for each subscriber, distinct copies of the same programming for each user) shows that they're trying to skirt around the law. However, it seems rather obvious that it's the exact opposite. There is no logical reason to have this kind of setup except to be within the law. Aereo's "insane" technological setup is much an indication of why it's legal -- and how screwed up copyright law is that this is the only legal way to build such a system.

Furthermore, for those who insist that Aereo is unrelated to cloud computing because it doesn't look like what they think cloud computing looks like, Schruers points out that one of the most important rulings for cloud computing -- the Cablevision remote DVR case -- didn't "look" like a cloud computing case either, but it helped spur massive investment in cloud computing by clarifying some key legal issues -- much of which an anti-Aereo ruling might now destroy.

Notably, the “remote DVR” system in Cablevision, a 2008 case upon which much of the reasoning in Aereo has been based, and which provided legal certainty that ushered in a wave of extraordinary investment in cloud computing, didn’t look anything like Dropbox either.  Even though Cablevision’s remote DVR didn’t look like a cloud storage service, however, investors quickly concluded that the decision’s reasoning had legitimized storing users’ files in the cloud, and streaming them back.

The broadcasters and their supporters don't want people to associate Aereo with cloud computing mainly because they hate what Aereo stands for. But their failure to understand both cloud computing and basic copyright law might seriously hinder important innovations well into the future.

Filed Under: cloud computing, copyright, public, transmission
Companies: aereo

CBS Once Again Threatens To Move Content Off The Air If Aereo Wins; Why Is That A Problem?

from the give-back-the-spectrum dept

As the Supreme Court gets closer to hearing the Aereo case, CBS appears to be ramping up the crazy rhetoric, with CEO Les Moonves once again threatening to take its content off of its over-the-air CBS flagship and move it elsewhere.

CBS Chief Executive Leslie Moonves said Tuesday that his company's namesake broadcast network could go "over the top," or be delivered via the Internet, if Aereo's model of streaming over-the-air programming is ruled legal.

Of course, Moonves has made nearly identical threats in the past, promising a year ago that it might just move all its content to cable if Aereo won. Elsewhere, CBS has admitted that an Aereo victory wouldn't really harm the company, and actually might spur some innovation.

As we pointed out last time, if CBS is really so clueless that it thinks abandoning the free handout it was given by the US government in terms of a massive chunk of spectrum is the right way to respond to something like Aereo (which only increases the viewers of its free, over the air broadcasts) well, then by all means go for it. I'm sure plenty of others would leap at the opportunity of making use of that spectrum, either for broadcasting other content, or putting it to even better uses.

If you haven't seen it, you should take a quick peek at the spectrum allocation chart for the US. You'll quickly notice that there are some giant blue blocks, compared to basically the entire rest of the chart which is divided into tiny, tiny pieces. Those giant blue blocks are the spectrum that the US government handed out for free to radio and TV broadcasters, in part with the promise that those companies would broadcast content for free for the public good. Here, Moonves is more or less admitting that, despite that free handout (worth many billions of dollars if that spectrum were to be sold on the open market) and despite the requirement that content be broadcast for the public good, he's willing to throw all of that away, because a tiny startup is getting his programming to even more viewers? Really? Does he even realize how ridiculous that sounds?

Either way, as we said last time, it's time to call his bluff. If little tiny Aereo will have him deserting that spectrum, why not ask him to hurry up so that we can put that spectrum to much better use.

Filed Under: copyright, les moonves, network television, over the air, spectrum, tv
Companies: aereo, cbs

The Aereo Case Isn't About Aereo, But About The Future Of Cloud Computing And Innovation

from the there's-much-more-at-stake-here dept

We've been writing quite a bit about the Aereo case lately, which is scheduled to be heard by the Supreme Court in late April. The case has an awful lot of powerful people and organizations lining up on both sides, filing briefs with the Supreme Court. Some have pointed out that Aereo's technology really isn't particularly innovative, and in fact, we've discussed how its setup is basically insane from a technology standpoint, but that the company is forced into building it that way to stay within the law (or so it and its supporters believe).

But some seem to be wondering why this one technology company, with something of a legal kludge is so important. It is incredibly important for reasons that have almost nothing to do with Aereo's actual service. Rather, it's about how the Supreme Court will interpret a key part of the Copyright Act, which could have an astoundingly bad chilling effect on pretty much all cloud computing. This may not seem obvious at first glance, since few people associate Aereo with cloud computing. Matt Schruers does a nice job breaking down the key point, however, as to why this one decision will have far reaching implications well beyond Aereo. And it all comes down to how the Supreme Court defines what is a "public performance."

Aereo’s position is that when Aereo subscribers pay for access to an antenna and direct it to send them back a unique copy of a particular broadcast, this is private. Different users access different antennae at different times, and each user receives a different copy of a work — even if they’re watching the same broadcast. Aereo isn’t rebroadcasting one work to thousands; it gives technology to thousands who at different times use that technology to access and possibly store different copies of works that they’re already lawfully entitled to receive. This is not unlike the Sony Betamax, which didn’t copy television, but gave thousands of consumers the technology to make reproductions of television content that they were already lawfully receiving.

Broadcasters have responded by saying that none of this matters; Aereo is infringing, they contend, so long as a given work is made available to multiple members of the public, even if Aereo does it with different unique copies, and at different times.

The problem with this rationale is that it applies with equal force to cloud storage like Dropbox, SkyDrive, iCloud, and Google Drive. If multiple people store their own, unique, lawfully acquired copy of the latest hit single in the cloud, and then play it to themselves over the Internet, that too sounds like the broadcasters’ version of a public performance. The anti-Aereo rationale doesn’t distinguish between Aereo and the cloud.

If you don't think that copyright holders won't take a victory here and go after various cloud services, you haven't been paying attention to the history of copyright fights over the past few decades.

And this is part of why the US Solicitor General's brief in support of the broadcasters is so ridiculously problematic. It tries to address that issue of cloud computing, by basically saying it might not be a big deal, because no company will require a license. However, other briefs in support of the broadcasters say it's no big deal because everyone can just get a license. One of those can't be true.

the U.S. Government (USG), for example, carefully hedges, saying that a decision for the broadcasters “need not threaten cloud computing.” It conspicuously does not argue that it will not threaten the cloud — only that the decision need not, implicitly conceding that a decision for the broadcasters could still be fatal for the cloud. The USG’s rationale is that as long as a consumer has lawfully acquired media in the first place, no cloud service need worry that someone will demand a license. Inconveniently for the USG, however, several other briefs filed concurrently argue that cloud computing services need not worry because, hey, everyone can just get a license! Setting aside the fact that there’s no way to ensure that all files in the cloud are licensed, this point substantially undercuts the USG’s position. Even as the USG is telling the Court that cloud services need not fear they’ll be demanded to take licenses for everything users put in the cloud, other interests are telling the Court that cloud services should do exactly that. Arguably, it doesn’t advance the broadcasters’ case that even their supporters cannot agree on whether cloud services would have licensing problems.

The ruling in this case matters, even if you don't care at all for Aereo's particular service. The wider impact on a variety of useful services could be massive. In fact, we've seen this before. Aereo's court wins to date rely heavily on the ruling that found Cablevision's remote DVR legal -- which similarly focused on defining whether or not that product involved a "public performance" that needed to be licensed. There, the court found that they did not. However, courts in other countries have found otherwise. That set up a nice natural experiment, and Harvard professor Josh Lerner looked at changes in venture capital investment into cloud computing offerings in the immediate aftermath of similar rulings, finding that the Cablevision ruling (saying not a public performance, and thus protecting the cloud) helped to spur tremendous investment in innovative new services -- to the tune of about $1 billion.

No matter what you think of Aereo, this decision will have a major impact on what sort of internet we have going forward.

Filed Under: broadcast, cloud computing, copyright, supreme court
Companies: aereo

International Music Organizations Claim Aereo Must Be Illegal Because Of International Trade Agreements

from the those-darn-international-obligations dept

For many years, we've highlighted how copyright maximalists have abused the international trade process to expand copyright monopolies around the globe. If you're interested in the history there, I highly recommend the book Information Feudalism: Who Owns the Knowledge Economy?, which details much of the history. Defenders of this policy love to pretend that international trade agreements can't bind US law, but reality is quite different. Time and time again, we've seen maximalists use international agreements to get their way either in ratcheting up copyright law even further, or pressuring courts into certain positions. This is one of the reasons (one of many) that we're so concerned about new agreements like the TPP and TTIP/TAFTA. Even if the USTR claims (incorrectly) that nothing in them goes beyond US law today, they can not only limit the changes Congress can make to copyright and patent law, but these issues can show up in court cases, potentially hindering innovation.

Here's a perfect example. We've been covering the Aereo case for quite some time, and as the Supreme Court prepares to hear the case in April, a bunch of international music organizations, led by the IFPI (basically the international version of the RIAA), have filed an amicus brief that pretty clearly says that the Supreme Court has to rule against Aereo because of existing international trade agreements that the US has signed. No joke. The brief directly claims that the appeals court ruling that found in favor of Aereo "places the United States in violation of its multilateral treaty commitments," as well as "its bilateral and regional agreements," and further that the Supreme Court has a duty to find against Aereo in order to respect the US's "treaty commitments."

Reading through the brief, you can see just how much copyright maximalists have succeeded in putting together a huge mess of international agreements (often built around issues totally unrelated to copyright, with a few copyright specific ones thrown in) that these groups can now claim require the Supreme Court to outlaw new innovations like Aereo. It further cites rulings in the EU and Canada that it suggests require the Supreme Court to follow suit. While there are some Justices who have made it clear time and time again that they don't care what foreign courts say, others have shown a willingness to follow suit.

Either way, this brief yet again highlights just how nefarious these international trade agreements can be, and how they can come back to bite new innovations years later. Defenders of copyright maximalism will insist that things like TPP and TTIP/TAFTA will have no impact on US law, but if those agreements come into force, you can bet that future US innovations will get stomped out of existence with certain players pointing to those agreements as a reason they need to be shut down.

Filed Under: broadcast, tafta, tpp, trade agreement, ttip, ustr
Companies: aereo, ifpi

US Solicitor General's Office, Run By Former Top MPAA Lawyer, Shockingly Sides With Broadcasters Over Aereo

from the it's-the-little-things dept

As the Aereo case is set to be heard by the Supreme Court in April, there have been a flurry of amicus briefs filed on both sides. It's disappointing, but not too surprising, to see that the official position of the administration is to side with the broadcasters over Aereo, arguing effectively that the length of a cord changes the copyright calculation. This position goes against every Aereo court ruling to date, except for one odd ruling in Utah. That the US government would take this position isn't too surprising. After all, the Solicitor General of the US (whose office prepared this brief) is Donald Verrilli -- who probably would have been representing the broadcasters in this case if it had happened a few years ago. For years, he was Hollywood's go to litigator for their big copyright cases, including the infamous Grokster case, in which he convinced the Supreme Court to create a new "inducement" standard for infringement. Technically, Verrilli "recused" himself from this filing, but what were the chances that the folks who report to him were going to file a brief that sided against the organization most likely to employ Verrilli once he leaves government service?

The key issue in the case is whether or not Aereo is retransmitting to the public. As we've explained multiple times, Aereo's setup is technologically insane, but legally sensible, given just how stupid copyright law is today. Because it's recognized as legal that you can place shift legally accessible TV (a la a Slingbox) and that you can watch over-the-air TV via a personal antenna (duh), Aereo has set up "individual antennas" for each customer, connected to the equivalent of a Slingbox, such that you can "subscribe" and get access to over-the-air channels. It's technically no different than you setting up an antenna and Slingbox in your home, except that the distance of the cable between the antenna/Slingbox combo and your TV is much longer with Aereo (across the internet) than in your home. However, broadcasters and other supporters of them (now including the US government) argue that this longer cable somehow, magically, turns this individual antenna into a public broadcast for which Aereo should be expected to pay ridiculously steep retransmission fees.

The arguments put forth by the US government are basically a carbon copy of what the broadcasters are saying. They completely reject the length of the cable argument by basically saying that, what really matters, is how this might undermine the retransmission fees broadcasters get. Specifically, they say that it doesn't matter that people at home can create their own Aereo legally, what matters more is that Aereo looks too much like cable retransmission:

Respondent observes that, from the subscriber's perspective, respondent's service provides substantially the same functionality that consumers could obtain by purchasing equipment for their homes. In enacting the 1976 Copyright Act amendments, however, Congress overrode decisions of this Court that drew on the same analogy. In applying the Copyright Act in its current form, the more important functional equivalence is between respondent and the cable systems that the 1976 Congress brought within the Copyright Act's purview.

But that totally and completely ignores some pretty significant differences, especially around how Aereo has an individual antenna for each user, as well as making sure that there's an individual copy made. That was not the case at all with cable systems.

While this filing is careful to state that it is not trying to undermine the important precedent set in the Cablevision case (which said a remote DVR controlled by a cable company is legal), which was a key reason why the lower courts sided with Aereo, it's important to note that back when the Cablevision case was up for appeal to the Supreme Court, Verrilli's predecessor sided with innovation over claiming infringement. It's just now that the Solicitor General who has a long history of representing Hollywood is in control, that the administration seems to be happy to side with copyright maximalism, over innovation. The one potential saving grace: the prior solicitor general who sided with Cablevision and against the broadcasters? Elena Kagan... is now a Justice on the Supreme Court.

Filed Under: broadcast, solicitor general, streaming, television
Companies: aereo, mpaa

Broadcasters Warn Supremes Of The Innumerable Non-Existent Horrors That Will Befall Everyone If Aereo Wins

from the your-threat-is-not-even-remotely-scary dept

As we've noted for some time, broadcasters have long argued that if they're not given what they want they're sure to go out of business, even if the evidence never actually supports that. Their latest incarnation of that has been in heavy rotation during their battle against live TV streaming service Aereo, with broadcasters arguing that if Aereo is allowed to survive, they'll pull all of their broadcast channels from over the air and move them to paid cable tiers. As we've stated previously they should go right ahead and do that, as the publicly-owned airwaves they're currently using can certainly be put to good use. Also, enjoy the wrath of sports fans (and the oodles of politicians who'll side with sports fans to earn political brownie points) when you attempt to do that.

Gearing up for their Supreme Court showdown with Aereo on April 22, broadcasters have once again gleefully pulled out this empty threat. Hoping to convince the court's eight Judges (Justice Alito recused himself, possibly due to stock holdings) an Aereo win would be disastrous, the petitioners proclaim that free "quality" programming will cease to exist:

"The TV broadcasters reject Aereo's conclusion that cloud computing and other novel technologies could be at stake, but they do raise dire warnings about what might happen should the Supreme Court rule in Aereo's favor. As the brief states, "Indeed, if that is the world in which broadcasters must live, then they may be forced to reconsider whether they can afford to continue making the same quantity and quality of programming available to the public for free in the first place."

The debate over the word "quality" aside, note the pretense again that they they would struggle with finances, ignoring the fact that CBS posted record earnings last year and even CBS's CEO recently admitting that an Aereo win would have no serious impact on earnings. Perhaps scarier is this dire warning included in the brief by the petitioners:

"If the transmit clause could be circumvented through the simple expedient of simultaneously supplying each user with a distinct transmission generated from a distinct copy, then cable and satellite companies could potentially devise Aereo-like workarounds of their own, and in the process render the transmit clause a dead letter."

Wow, that would be rough, huh? Cable and satellite operators giving subscribers more flexible options for content that might in the process make a customer or two happy? Could even Lovecraft or Dante forge a more horrifying hellscape? Is there any point in living?

Filed Under: broadcast, retransmission, streaming, supreme court, television
Companies: aereo

Broadcasters Get Aereo Shut Down In Salt Lake City and Denver

from the you-can't-win-'em-all dept

A string of Aereo legal wins has come to an end, with US District Judge Dale Kimball of Utah imposing a preliminary injunction (pdf) on Aereo's existing operations in both Utah and Colorado. The injunction covers all of the 10th circuit, so it will technically prevent any future Aereo operations in all of Wyoming, New Mexico, and Oklahoma as well. Aereo currently operates in ten markets, but in recent weeks has bumped into some unspecified capacity issues in both New York and Atlanta (I've asked, they won't get specific about what kind of capacity issues they've faced).

Kimball wasn't particularly receptive to Aereo's claims that their tiny OTA antennas -- one rented to each Aereo subscriber -- allow the live streaming TV company to bypass the "Transmit Clause" of the 1976 Copyright Act:

"Based on the plain language of the 1976 Copyright Act and the clear intent of Congress, this court concludes that Aereo is engaging in copyright infringement of Plaintiffs’ programs. Despite its attempt to design a device or process outside the scope of the 1976 Copyright Act, Aereo’s device or process transmits Plaintiffs’ copyrighted programs to the public."

Similar legal assaults by the broadcast industry had proven unsuccessful in Boston and New York. Needless to say, broadcasters like Fox were pleased by the result, calling the ruling "a significant win for both broadcasters and content owners" that will "prohibit Aereo from stealing our broadcast signal." Riding on Aereo's New York win by using the Cablevision precedent, the battle now heads to the Supreme Court for the real showdown on April 22. Should Aereo win that, broadcasters could face a number of similar services offered by cable operators eager to bypass soaring retransmission fees.

Filed Under: broadcast, colorado, new mexico, oklahoma, retransmission, television, utah, wyoming
Companies: aereo

CBS Admits Aereo Supreme Court Win Wouldn't Hurt CBS, Might Make Things Better For Everybody

from the we-really-feel-for-you dept

Last year CBS joined a number of broadcasters in whining incessantly about how if Aereo was allowed to continue living, the "struggling" networks would be forced to pull their content from over the air broadcasts and move to cable. It's part of a long, long history of broadcasters pretending that if things don't go just they way they want them to, they'll surely go out of business. The threat to pull broadcasts was aimed at scaring Congress into passing protectionist legislation, and as we noted at the time it's something CBS should just shut up and do -- given the public could probably come up for better uses for their spectrum.

After insisting for some time that big bully Aereo will drive poor little CBS out of business (the same CBS that posted record earnings last year and 20% higher profits in the fourth quarter), it's rather amusing to see CBS CEO Les Moonves insist in an interview with CNBC that CBS won't feel any financial impact from a Supreme Court win. In fact, Moonves notes the win will likely result in a slew of new innovative products as cable companies -- and in response the networks themselves -- rush to follow Aereo's lead:

"Look, we expect that the Supreme Court will do the right thing and side with the people who are providing the content. Not the people who are taking our content and using it illegally, which is our point of view. However, if that should happen, if the worst should happen, there are so many other alternatives that will not; so this will not affect our bottom line. Obviously the networks collectively could do their own version of Aereo, there's a way to put our signal on cable without putting it over the air. There's also over-the-top for us. So, there are many, many alternatives to allow people to receive our signal no matter what happens. It's something that the Supreme Court will decide, but it's not anything that we're deeply concerned about because we have alternatives."

In other words, an Aereo Supreme court win not only wouldn't dent CBS in the slightest (something we already knew), it would result in a variety of new ways for people to receive content. In fact, it seems like an Aereo win would probably be good for pretty much everybody but Aereo. Should Aereo win, they would suddenly face all of the satellite, cable and pay TV companies offering similar or better services over the Internet to help slightly reduce retransmission fees. That would in turn result in broadcasters coming up with more innovative Internet TV services of their own to balance any retransmission fee losses.

More products, more options for consumers, more innovative services, more money for everyone and less time in court; it sounds like a real nightmare scenario for CBS and everybody involved.

Filed Under: broadcast, cable, les moonves, supreme court, television
Companies: aereo, cbs