JESSELL AT LARGE

Aereo Ruling Opens Big Opportunity For TV

The way I see it, in closing the door on Aereo, the Supreme Court opened wide the door for the video distribution of broadcast signals by settling the question of whether online video distributors are cable systems. Clearly, they are, the court says. So, in effect, an online video distributor that wants to carry a broadcast signal no longer has to worry about clearing copyrights of individual rights holders, including the rapacious sports leagues. It only has to get permission from the broadcasters.

On your behalf, dear readers, I have carefully read the Supreme Court’s ruling that Aereo is a copyright cheat. In my search for the essence of the majority opinion, I have dug into dusty copyright tomes (no sterile Internet search for me), consulted some of the nation’s sharpest legal scholars and practitioners and sipped fine bourbon.

So, what exactly does the opinion say? Since it looks like a duck, swims like a duck and quacks like a duck, it is most definitely a duck.

The opinion cuts through all the high-tech hoo-haw surrounding Aereo and makes the point several times that the online video service is just like a cable system and thus is subject to all the rules and regulations governing cable. They, of course, include the obligation to get the consent of broadcasters before redistributing their signals.

Aereo is “substantially similar” to a cable system, the opinion says. It is “highly similar” to a cable system. It possesses an “overwhelmingly likeness” to a cable system. It is “for all practical purposes a traditional cable system.”

Oh, there are differences in how Aereo works, it concedes, but they are “not adequate” to excuse it from traditional cable regulation.

The mid-week ruling was unqualified good news for broadcasting that provided a welcome distraction from the lackluster upfront selling. Broadcasters no longer have to worry about online video services picking up their signals without permission — that is, without paying for them.

BRAND CONNECTIONS

Wall Street investors, apparently believing Aereo was a mortal threat to broadcasters, reacted by driving up the stock of the big multimedia companies with broadcast networks as well as the pure-play station groups.

When NBC’s Scot Chastain announced the news to a theater full of creative services directors at PromaxBDA, they erupted into applause. (By the way, Chastain cited a TVNewsCheck text alert for getting him the news. Thanks for the plug, Scot.)

Much of the post-ruling analysis I read characterizes it as narrow in scope. But I don’t think it is.

This may be the bourbon talking, but the way I see it, in closing the door on Aereo, the Supreme Court opened wide the door for the video distribution of broadcast signals by settling the question of whether online video distributors are cable systems.

Look at that language from the opinion at the top of this column again. The Supreme Court of United States of America says over and over again that online video services like Aereo are cable systems.

That means not only are they subject to the same obligations of cable systems, but also to the same benefits, chiefly the compulsory copyright license.

So, in effect, an online video distributor that wants to carry a broadcast signal no longer has to worry about clearing copyrights of individual rights holders, including the rapacious sports leagues. It only has to get permission from the broadcasters. That really simplifies matters.

It’s been fun to bash Aereo, but it is (was?) a great service. It put together a nice package of broadcast signals, enhanced it with DVR functionally and sold it at an affordable price. Last year, our tech reporter at the time, Andrew Dodson, signed up and gave it a rave review.

Broadcasters need to be online so that they can reach the young folks on their smartphones and tablets. Now they can, thanks to the six justices and, ironically, Aereo.

Perhaps the vehicle is Aereo. Bill Carter of the New York Times asked CBS’s Les Moonves whether he would consider supplying CBS signals to Aereo if it were prepared to pay. “We would talk to anybody,” Moonves said.

It’s hard to know whether Moonves would seriously consider an Aereo deal. After a two-year legal battle, there may be too much bad blood. Perhaps Aereo could entice CBS and other broadcasters by first promising to cover their legal fees.

But broadcasters don’t need Aereo. There is nothing particularly special about its service, despite all the claims by proponents of how wonderfully innovative it is. The only proprietary aspect of Aereo was its micro-antenna contraption that was designed not to enhance the service, but to circumvent copyrights and retransmission consent. Can something be called “innovative” if it does a job more inefficiently?

Broadcasters don’t have to wait for a third party. They could do it themselves. In fact, Disney-ABC and Dish have already announced that they are putting together an online video service that would be a low-cost facsimile of a cable service. With this week’s ruling, the service could add all the local broadcast signals of every market it enters — with permission, of course.

If nothing else, the high court’s duck-is-a-duck ruling may facilitate the networks’ budding TV Everywhere services, online video services that have been struggling to get going because of hassles with copyright holders. If the NFL makes a fuss, the broadcasters and their cable partners can now point to the compulsory license and say, “Shut the F up.”

I may have this all wrong. I didn’t spend any time with tomes or experts, but the math seems to work. Remember the transitive property of equality. If an online video service equals Aereo and Aereo equals a cable system, then an online video system equals a cable system.

Broadcasters went into court on the defensive. They can come out on the offensive. Being part of an Aereo-like service in every market in America is not an opportunity they should duck.

Harry A. Jessell is editor of TVNewsCheck. He can be contacted at 973-701-1067 or [email protected]. You can read earlier columns here.


Comments (12)

Leave a Reply

Linda Leavell says:

June 27, 2014 at 3:45 pm

Aereo is Shutting down for good!

    Keith ONeal says:

    June 30, 2014 at 4:36 pm

    Not so fast, dantheflash2011! Aereo has temporary shut down while they look FOR other options. They should have THOUGHT to look for other options during all this time that they were in litigation with the courts! A smart business would have had a Plan B (or even a Plan C) for backup, but not Aereo!

Christina Perez says:

June 27, 2014 at 4:27 pm

Harry’s analysis begs the question: Will the Supreme Court Aereo ruling hasten the day when broadcasters cease to be broadcasters, and, with the help of the pay TV lobby, convince Congress to allow them to migrate programming exclusively to pay TV transmission modes? Before the bean counters and greedsters get any ideas, perhaps the industry should gauge the likely public and political uproar that the death of “free TV” surely would bring.

Joli Francis says:

June 27, 2014 at 5:47 pm

Philly, Congress is too wary of their constituencies to abandon the “free main channel” mandate or to allow the iconic college and pro events to go to pay TV. Despite their heavy $$$ and arm twisting, the pay TV lobby and their bean counters/greedsters have never gotten Congress to go there and I doubt that they will be any more successful now.

Warren Harmon says:

June 27, 2014 at 5:58 pm

AEREO=THEFT=DEAD VENTURE, GOOD RIDDINS BARRY DILLER, NOW LETS GET THE OTHER BARRY!

John Pappert says:

June 27, 2014 at 6:48 pm

A Cable System is a Cable system! An online System is on-line! Is this the Emperors New sock,or rather is this too simplistic?

Ellen Samrock says:

June 27, 2014 at 9:26 pm

With Aereo out of the way, Syncbak can really take off. Let’s hope the networks and broadcasters promote this service as well as Aereo promoted its own. Consumer awareness is everything here.

bart meyers says:

June 28, 2014 at 7:31 am

Nice piece, Harry. Maybe I should try bourbon when I write.

Drucilla Neeley says:

July 1, 2014 at 10:12 am

NEXT …..STOP THE AUCTION, I WANT TO GET OFF
WE ARE SELLING OFF OUR FREEDOM OF SPEECH
SO THAT VERIZON, AT&T AND ET ALL CAN CLOSE THE GATE
THE GOVERNMENT CAN COLLECT 20 PERCENT TAX

    Wagner Pereira says:

    July 3, 2014 at 1:26 am

    From the look of your post, you clearly have gotten off, just as you wanted. Not sure where you have gotten off, but it is clearly not the land of those with a High School Diploma or G.E.D.

Shaye Laska says:

July 2, 2014 at 11:20 am

Eventually all broadcast TV stations will be “networks”. Stand by for lift off…

    Keith ONeal says:

    July 3, 2014 at 3:38 pm

    Like in Germany where ARD has ONE Station, and transmitters covering the rest of the country. ZDF in Germany has ONE Station and transmitters covering the rest of the country as well. ARD and ZDF are Broadcasters, whereas ABC, CBS, FOX, NBC, ION, My Network TV, The CW, and PBS are Broadcast Networks.


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