Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
Author: Scarinci Hollenbeck, LLC
Date: July 2, 2014
The Firm
201-896-4100 info@sh-law.comOn June 25th, the Court ruled 6-3 in favor of the networks against a TV startup called Aereo, saying that the company will need to pay the networks for the re-broadcasting of their content.
Aereo’s business model worked on the same principle that governs an antenna in your own home. Once you buy the antenna, the signals that it picks up from networks like ABC, CBS, Fox, NBC and PBS are free. Networks don’t charge for over-the-air broadcasts because most of their money comes from advertising anyway – the more people that watch their channels, the more money they make.
However, many people don’t like installing antennae in their homes because the signal is unreliable and most premium channels don’t broadcast for free. Aereo solved the first problem by lining a warehouse with tens of thousands of tiny antennae next to a machine that amps up the signal’s power. Users were allowed to rent one of these antennae for $8 per month, the signals from which were pumped back to them over the Internet, making Aereo one of the cheapest options in television.
This is all set to change now that the Supreme Court has ruled against Aereo. To their credit, the justices were careful to tread lightly in the face of the potentially massive and unpredictable ramifications such a ruling might have. Liberal justice Stephen Breyer, who led the majority that voted against Aereo, told the startup’s lawyer that he did not understand what a decision either for or against the company would do to other kinds of technologies.
In the end, the majority opined that Aereo was overwhelmingly similar to the cable companies that were specifically targeted by amendments that Congress made to the Copyright Act in 1976. Breyer acknowledged that Aereo has a key difference in that its system remains inert until a subscriber indicates that he or she wants to watch a program, but found that the difference was ultimately not critical.
“This difference means nothing to the subscriber,” he wrote. “It means nothing to the broadcaster. We do not see how this single difference, invisible to subscriber and broadcaster alike, could transform a system that is for all practical purposes – a traditional cable system into a copy shop that provides its patrons with a library card.'”
While Aereo was never a massive company – at least in part due to its limited range of content – the finding would have carried important ramifications either way. Finding for Aereo would have meant that the piece of copyright law that ensured that cable companies had to keep subsidizing networks would have been weakened, or potentially caused them to stop transmitting for free over the air. Find for the broadcasters, however, and there is the potential for damage to citizens’ rights to obtain free content.
In the end, the Supreme Court took an extremely narrow opinion and ruled that Aereo’s business model was illegal only in that it is extremely similar to old CATV systems. While the startup’s users are likely to be disappointed, this is probably the safest ruling the Court could have made for the long-term development of new technologies.
If you are interested to learn how this entire case began, check out Is Aereo Fight Headed to the U.S. Supreme Court? at www.businesslawnews.com.
If you have any questions about this post or would like to discuss your sports and entertainment matters , please contact one of your Sports and Entertainment attorneys.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Secured transactions form the backbone of a wide range of business dealings, including business loans, mortgages, and inventory financing. Because the stakes are often high and relatively minor oversights can have drastic consequences, lenders and borrowers should thoroughly understand how to form an enforceable security agreement that protects their legal rights. What Is a Secured […]
Author: Dan Brecher
Cashing a check marked “paid in full” can be a risky endeavor, particularly if you don’t fully understanding the legal implications. If you are owed more than the amount of the check you accept and deposit, you may waive your right to collect the full disputed amount. That is why you should consider either rejecting […]
Author: Dan Brecher
The One Big Beautiful Bill Act of 2025 (OBBBA) significantly impacts federal taxes, credits, and deductions. A key change relating to Qualified Small Business Stock (QSBS) allows greater tax-free gains for investments in startups and other qualifying small businesses. Company founders and other investors should understand how the enhanced tax strategy works or risk missing […]
Author: Dan Brecher
Corporate consolidation involves two or more businesses merging to become a single larger entity. The result is often a stronger and more competitive company that can better navigate today’s competitive marketplace. What Is Corporate Consolidation? Corporate consolidation closely resembles a basic merger transaction. The primary difference is that a consolidation creates an entirely new business […]
Author: Dan Brecher
Business law plays a critical role in nearly every aspect of running a successful enterprise, from negotiating a commercial lease to drafting employee policies to fulfilling corporate disclosure obligations. Understanding what is business law and your legal obligations can help your business run smoothly and build productive relationships with clients, business partners, regulators, and others. […]
Author: Dan Brecher
Corporate transactions can have significant implications for a corporation and its stakeholders. For deals to be successful, companies must act strategically to maximize value and minimize risk. It is also important to fully understand the legal and financial ramifications of corporate transactions, both in the near and long term. Understanding Corporate Transactions The term “corporate […]
Author: Dan Brecher
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!