Aereo Ruling Opens Big Opportunity For TV

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.

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.