Bludgeoned And Bleeding, Aereo Finally Files For Bankruptcy

from the it-was-fun-while-it-lasted dept

For a moment there, streaming video operator Aereo put on a brave face that it could continue despite last June's Supreme Court ruling against the company. While some interpretations of that ruling seemed to suggest that Aereo could be considered a cable company if it was willing to pay retransmission fees and effectively function as a delayed DVR service, those dreams were dashed in an October ruling that granted a pretty broad injunction by broadcasters. Judge Alison Nathan effectively stated at the time that Aereo should go ahead and die as the Supreme Court intended, and stop with all the postmortem twitching.

With no product on sale and legal costs mounting, Aereo earlier this month laid off the majority of its staff with the exception of a skeleton crew in their New York City office. This week, Aereo announced that the company would be filing for bankruptcy. In a blog post, Aereo CEO Chet Kanojia finally acknowledges the obvious -- that the Supreme Court ruling was simply too difficult to overcome:

"While we had significant victories in the federal district courts in New York and Boston and the Second Circuit Court of Appeals, the reversal of the Second Circuit decision in June by the U.S. Supreme Court has proven difficult to overcome. The U.S. Supreme Court decision effectively changed the laws that had governed Aereo’s technology, creating regulatory and legal uncertainty. And while our team has focused its energies on exploring every path forward available to us, without that clarity, the challenges have proven too difficult to overcome."

While the blog post is entitled "The Next Chapter," this is most likely game over for the disruptive upstart.

While the FCC is considering rule changes that would officially declare over the top streaming operators cable companies (giving them FCC-enforced access to vertically integrated programming), that would require that Aereo pay retransmission fees -- ruining Aereo's biggest appeal: the low price. But by the time Aereo gets any sort of fresh footing as a more traditional streaming operation, the market will likely be flooded with a variety of new, live over-the-top (OTT) services (from Dish, Sony, Verizon and more in 2015), and Aereo's window will have been slammed shut by larger players.

Filed Under: banckruptcy, cloud, copyright, innovation
Companies: aereo