Two recent legal cases are creating problems for broadcasters. A federal appeals court refused to rehear a case in which broadcasters attempted to shut down Aereo, a company that allows users to record broadcast TV online, and another appeals court declined a case to prevent Dish Network from selling its Hopper service, which allows viewers to bypass TV commercials. How broadcasters ultimately respond to the disrupters could have a major impact on television.
“The cases are far from settled, but the stakes could not be bigger. Broadcast television as we know it now stands on two legs: advertising and retransmission fees from cable providers,” reports The New York Times. “With Hopper skipping ads and Aereo allowing for distribution over the Internet without payment, profits might go dark.”
Early legal fights involving broadcast television began with the case of Sony Betamax in the 1970s, where networks and program producers did not want consumers copying movies and TV. The Supreme Court settled the case in 1984, allowing that home video recording was attributed to “legitimate fair-use.”
The Betamax case continues to influence today. Courts have maintained that consumers have the right to record content even if done through a third party.
Another important case involved Cablevision in 2007, where the Second Court of Appeals ruled that people could record TV. It also determined that Cablevision offering its customers a remote hard drive storage service to record TV was legal.
“We are in a transition period, migrating toward a world where you are going to get the content you want without commercials,” said Jonathan Band, a lawyer and advocate for consumer choice. “But the truth of the matter is that you are still going to have to pay. The only thing really being argued is who gets the money.”
Last Wednesday, the Ninth Circuit Court of Appeals refused Fox’s appeal against Hopper. The court ruled that Fox could not make claims on TV commercials which it did not own, so skipping them was not illegal.
Currently, there is a legal fight between CBS and Time Warner Cable over retransmission fees. The cable company has even suggested its customers use Aereo in the event of a blackout.
As a last measure alternative, Fox can change its business and close its broadcasting, leaving Aereo with nothing to stream, and disrupting business with Dish, a company with much in common.
Why Aereo’s Free Ride Will Ultimately Crash, Variety, 7/26/13
Apple TV, Google Chromecast and Aereo Put Broadcast Television on Death Watch, Forbes, 7/29/13