Aereo Files for Bankruptcy Protection in Wake of Legal Battles

Aereo’s plan to upend the television industry with an online streaming service has come to an end. Chet Kanojia, Aereo’s chief executive, explained in a blog post Friday that legal and regulatory challenges have become too difficult for the Barry Diller-backed company. As a result, five months after the Supreme Court ruled that the startup had violated copyright laws by capturing broadcast TV via small antennas and retransmitting to subscribers, Aereo has filed for bankruptcy protection.

Aereo_Array1“Aereo had been striving to revolutionize broadcast TV viewing, offering live and recorded programs via the Internet for as little as $8 a month,” reports Bloomberg. “The Internet-TV startup’s failure eliminates an alternative to cable and satellite bundles, which can cost $100 a month and include channels many subscribers don’t watch.”

Since the Supreme Court decision, Aereo has been battling it out in the lower courts, trying to find an approach that would enable its operations to continue. Aereo finally filed for bankruptcy to “maximize the value of its business and assets” without additional costs of litigation.

Kanojia said he had considered selling the company’s intellectual property, but buyers were reportedly concerned about unresolved litigation. However, several reports suggest companies may still be interested in Aereo’s technologies.

“The Chapter 11 restructuring allows the company to put an end to its court battles and salvage what value is left in the business,” note The New York Times. “The company, for instance, could pursue a sale of its cloud-based recording and live streaming technologies.”

“While Aereo was a small service with only tens of thousands of subscribers,” adds NYT, “broadcasters worried that cable and satellite companies could create similar technologies and avoid paying retransmission fees, which total almost $5 billion annually, according to SNL Kagan.”

Since Aereo launched, video providers including Dish, DirecTV, Verizon and Sony have been planning online programming, while HBO and CBS have announced new standalone online streaming services.

“We have traveled a long and challenging road,” Kanojia said on Friday. “We stayed true to our mission and we believe that we have played a significant part in pushing the conversation forward, helping force positive change in the industry for consumers.”