The broadcast networks scored a big victory over Barry Diller-backed streaming video start-up Aereo- squashing the new technology in a landmark Supreme Court case. Bobbi Rebell reports.
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A big win for broadcasters against Aereo- the startup that was offering broadcast signals to mobile devices for a small monthly fee. The Supreme Court ruled against it- saying it was violating copyright law by using tiny antennas to broadcast TV content to paying customers- without paying the broadcasters.
Horizon Media's Brad Adgate:
SOUNDBITE: BRAD ADGATE, SENIOR VICE PRESIDENT, RESEARCH, HORIZON MEDIA (ENGLISH) SAYING:
"It's really a slam dunk for broadcasters. You know, I mean Les Moonves said right now that Aereo was kind of like a pimple on the face. But if this, you know, if the courts favored Aereo, I think they would have rolled out their service throughout the country. And not only that, but I think the cable operators would have done the same thing. I mean there is nothing to stop a Cox or a Charter or some other big cable operator to create the same model Aereo did, and they would also be bypassing the re-transmission fees."
Chet Konojia, Aereo's CEO called the decision a massive setback for American consumers, adding "our work is not done."
The case puts Aereo in a precarious position at best:
Penn Law Professor Shyam Balganesh
SOUNDBITE: SHYAMKRISHNA BALGANESH, ASSISTANT PROFESSOR OF LAW, UNIVERSITY OF PENNSYLVANIA LAW SCHOOL (ENGLISH) SAYING:
"Aereo can sit down with the broadcasters to start talking about a licensing mode. Of course with a decision in their favor, the broadcasters are going to have a significantly stronger position at the table and of course Aereo can lobby Congress to get a specific exception or some kind of compulsory license or a negotiated bargain introduced by way of an amendment to the copyright act."
Aereo backer Barry Diller, who heads IAC/Interactive said "It's not a big (financial) loss for us, but I do believe blocking this technology is a big loss for consumers."
Gary Shapiro, President and CEO, of the Consumer Electronics Association warns this decision won't save the broadcasters.
SOUNDBITE: GARY SHAPIRO, PRESIDENT AND CEO, CONSUMER ELECTRONICS ASSOCIATION (ENGLISH) SAYING:
"If broadcasters choose to beat up on Aereo rather than embrace it, they make come to rue that day. They are making a lot of money of retransmission consent. It's approaching $4 billion a year and growing. And at some point the cable industry will say you know we don't need that local news, we have another alternative, we have other ways of doing it, and consumers don't really care."
The court made it clear this decision applied only to Aereo- and not to cloud-based services where content is stored on the Internet on servers from companies like Google, Microsoft and Dropbox.
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