July 17, 2013
On Tuesday, the U.S. Second Circuit Court of Appeals refused TV broadcasters’ petition to appeal an earlier ruling that Internet-streaming startup Aereo is legal in New York City. The appeal came from Fox, CBS and others. Judges were polled and a majority did not want to rehear the case, although Judge Denny Chin called Aereo a “sham” and harmful to the TV industry. Fox Broadcasting is reviewing its options and may appeal to the U.S. Supreme Court.
“Fox and other broadcasters had sought an injunction to shut down Aereo, which they accuse of copyright infringement for retransmitting their signals to Internet-connected devices without permission,” reports Variety. “Aereo, whose backers include IAC chairman Barry Diller, has defended the service as a legal option for consumers to receive free over-the-air TV.”
“The Second Circuit’s denial of our request for an ‘en banc’ hearing, while disappointing was not unexpected,” Fox said in a statement. “We will now review our options and determine the appropriate course of action, which include seeking a hearing in the U.S. Supreme Court and proceeding to a full trial on the merits of the case.”
Broadcasters fear that Aereo could potentially lead to dramatically altering the retransmission licensing business. U.S. television broadcasters generated $2.36 billion in retransmission fees last year, according to SNL Kagan.
It has also been suggested that if broadcasters lose the revenue stream necessary to support free, over-the-air television, then they may need to consider converting to a subscription-based model.
“Aereo has launched in New York City, Boston and Atlanta and has set plans for a September debut in Chicago,” notes Variety. “The service’s base plan is $8 per month, which includes 20 hours of DVR storage, and a $12 monthly option provides up 60 hours of recording space. The company has not disclosed how many paying subscribers it has signed up.”