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Aereo Survives Third Court Challenge: Appeal to Re-Hear Case in Appellate Court Denied

Phillip Dampier July 16, 2013 Competition, Online Video, Public Policy & Gov't, Video 1 Comment

aereo_logoFor the third time, legal action from the four largest commercial television networks to shut online streaming service Aereo has been denied.

In a 10-2 decision, with one recusal, the 2nd Circuit Court of Appeals denied an attempt to re-hear the case by the full appellate court.

Following disposition of this appeal on April 1, 2013, Plaintiffs-Appellants filed petitions for rehearing in banc. An active judge of the Court requested a poll on whether to rehear the cases in banc. A poll having been conducted and there being no majority favoring in banc review, rehearing in banc is hereby denied.

Circuit Judge Denny Chin strongly dissented from the majority’s decision, joined by Circuit Judge Richard C. Wesley. Chin firmly took the side of the broadcasters, fearing if Aereo was permitted to continue operating, it could quickly mean the end of free over-the-air television. He believes the service exists only because of a precarious loophole:

“The majority’s decision elevates form over substance. It holds that a commercial enterprise that sells subscriptions to paying strangers for a broadcast television retransmission service is not performing those works publicly. It reaches that conclusion by accepting Aereo’s argument that its system of thousands of tiny antennas and unique copies somehow renders these transmissions “private.” In my view, however, the system is a sham, as it was designed solely to avoid the reach of the Copyright Act and to take advantage of a perceived loophole in the law….”

Just about every over-the-air network and major station in the New York City area is opposed to Aereo. Among those filing suit against its continued operation:

  • Networks: ABC, CBS, NBC, FOX, PBS, Univision, and Telemundo
  • Stations: WNET, WPIX, WNJU

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Bloomberg IACs Diller Says Aereo Is Not a Threat to Anyone 7-10-13.flv[/flv]

Barry Diller, the force behind Aereo, tells Bloomberg News he expected to get sued when he provided viewers with an alternate way to watch television. Diller says networks and stations are simply uncomfortable with change and that Aereo poses no threat to them. (3 minutes)

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Bloomberg Aereo Not a Blip on Broadcasters Radar 6-27-13.flv[/flv]

Bloomberg Industries director of North American research Paul Sweeney looks at Aereo’s impact on television broadcasters and how it could eventually threaten their revenue streams. He speaks on Bloomberg Television’s “In The Loop.” (2 minutes)

FilmOn is Back With “AereoKiller” That Lands Company Back in Court

Phillip Dampier May 28, 2013 Competition, Consumer News, FilmOn, HissyFitWatch, Online Video, Public Policy & Gov't, Video Comments Off on FilmOn is Back With “AereoKiller” That Lands Company Back in Court

filmon-smBack in the fall of 2010, British billionaire Alki David fired a salvo against major broadcast networks in the United States and United Kingdom with the introduction of FilmOn, an online cable system offering unlimited viewing of broadcast networks from both countries for around $10 a month. By early 2011, lawsuits from various networks forced the removal of the most-watched channels, and most of the incentive for subscribers to keep paying for the service.

But David has never given up on FilmOn, and borrowing a page from Aereo’s business plan, he has brought back most of the major American networks on his relaunched platform, dubbed AereoKiller.

The company claims it is now using individual over-the-air antennas to receive broadcast stations from the New York or Washington, D.C. area, selling 24/7 streaming access for $9.99 per month or $99 a year. DVR service is sold at prices ranging from $2.95 a month to $190 a year, depending on the number of hours recorded.

Among the stations included:

New York

  • WPIX11.svgWCBS (CBS)
  • WNBC (NBC)
  • WNYW (FOX)
  • WABC (ABC)
  • Bounce TV (via WWOR subchannel)
  • WPIX (CW)
  • WNET (PBS)/WNET-Kids
  • WNJU (Telemundo)

Washington, D.C.

  • WRC-TVWRC (NBC)
  • WTTG (FOX)
  • WJLA (ABC)
  • WUSA (CBS)

There seem to be no geographic restrictions to prevent out of area viewers from subscribing, and FilmOn offers viewing on the desktop, as well as through iOS and Android apps.

David

David

FilmOn may have avoided streaming west coast stations because a California court found in favor of broadcasters who sued to shut down the operation three years earlier. But it ultimately will not keep David’s upstart service out of the courts in the east.

Last week, three major television networks and Washington, D.C. station owner Allbritton Communications filed suit against FilmOn for streaming signals from the nation’s capital without permission.

Based on the track record of earlier ventures, customers may want to avoid subscribing at the annual package price. Historically, broadcasters have fought and won temporary restraining orders that block the streaming services until the case makes its way through legal proceedings. Aereo, which streams New York area television stations exclusively to New York City customers has proven the exception and continues to run, at least for now.

Broadcasters consider stopping “dime-sized” antenna farm streaming services like Aereo and AereoKiller a top priority, because networks and local stations earn lucrative retransmission consent rights fees from cable, satellite, and telco-TV providers used by at least 90 percent of the viewing audience. Should these alternative technologies be found legal and not in violation of copyright, pay television providers could potentially license and incorporate similar technology into their respective set-top boxes and avoid paying license fees to station and network owners.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/FilmOn Introduction 5-13.mp4[/flv]

FilmOn’s introductory promotional video features some boastful claims from founder Alki David that are perhaps more wishful thinking than reality, but PlayOn has persisted despite broadcaster lawsuits by creating and distributing original live and recorded programming.  (8 minutes)

Hardball: Comcast-NBC Use Nightly News Report to Bash Online Competitor Aereo

Aereo plans to expand to nearly two dozen cities in the coming year.

Aereo plans to expand to nearly two dozen cities in the coming year.

Viewers of NBC’s Nightly News with Brian Williams learned an upstart online streaming video competitor seeking to help Americans control their cable bills is probably an illegal pirate operation that doesn’t pay for the programming that parent company Comcast-NBC pays hundreds of millions to produce.

On Tuesday Aereo bypassed the network television gatekeepers suing to shut the service down and bought a full-page ad in the New York Times to remind the country it is winning its case in court:

“The broadcast networks have been granted free and valuable broadcast spectrum worth billions of dollars in exchange for their commitment to act in the public interest. It’s a sweet deal… Along the way, cable and satellite providers entered the picture.

In addition to free spectrum and advertising revenues, the networks got very lucrative retransmission fees from these providers. And so, for many, broadcast television is now offered in expensive fixed bundles or packages. Yet many millions of Americans continue to use antennas to get broadcast TV.”

Despite the corporate media firewall that keeps positive reports about the competition off the nightly news, the little streaming company that could is having an impact.

In the last two weeks, virtual hysteria has broken out among major network officials who are threatening to pull the plug on free over the air TV if their multi-billion dollar operations are not granted immediate protection from a startup that rents out dime-sized antennas in New York City to stream local television stations.

Chase Carey from Fox said he’ll put the Fox Network behind a pay wall if Aereo keeps it up.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Bloomberg Leo Hindery Calls Aereo Pissant 4-12-13.flv[/flv]

Leo Hindery who oversees a private equity firm and has a history with both cable and broadcast networks called Aereo tawdry and a “pissant little company” run by a man who helped launch the Fox Network and now threatens to ruin the broadcast television business model for everyone else. (Bloomberg News) (5 minutes)

The consolidation of corporate media may now be influencing what gets reported on the evening news.

Is media consolidation influencing the evening news?

A combination of networks and other big media interests are now preparing to take their battle to Congress, warning lawmakers the very concept of free over the air television is in peril if companies like Aereo are allowed to operate.

Why are they so threatened? Aereo effectively bypasses the “retransmission consent fees” that broadcasters now charge pay television providers for permission to carry their channels and networks. As advertising revenue declines from reduced viewing numbers and equipment that offers viewers a fast forward through ads, the broadcasters have found gold charging monthly fees to cable, satellite, and telephone company TV systems for each subscriber. Ultimately, consumers pay these fees through higher cable and satellite bills.

Aereo receives over the air signals from individual antennas and makes that programming available for online streaming. No retransmission consent fees are required, Aereo argues, because they are just serving as an antenna farm. Only one stream per antenna is allowed, they note, so the company is not mass-distributing programming.

The battle between broadcasters and Aereo is now turning up in news reports that have tried to walk a fine line between the positions of the executives at the networks suing Aereo and the streaming service itself. Not every news outlet is managing the balancing act successfully.

[flv width=”596″ height=”356″]http://www.phillipdampier.com/video/NBC News Aereo vs Broadcasters 4-9-13.flv[/flv]

NBC News aired this incomplete report about Aereo on its evening newscast on April 9th. What is missing? The fact courts have so far sided with Aereo and against the broadcasters’ claims the service is pirating content.  (3 minutes)

The Verge points out NBC News did not make it far before they fell solidly in line behind their corporate owners:

In its piece on Aereo, NBC News included a lengthy explanation of what TV has meant to Americans through the decades. Aereo’s CEO Chet Kanojia is quoted, but only about how the service functions, and there’s nothing from him about the controversy. In contrast, NBC’s story includes a quote from Carey calling Aereo “piracy.” The network news group also tossed in this line: “Aereo doesn’t pay networks for the content they spend hundreds of millions of dollars to produce.”

What NBC didn’t say was that, according to two separate federal courts, Aereo’s service is legal. The ruling by the appeals court upheld a district judge’s decision and was not insignificant. The court allowed Aereo and Kanojia (photographed at right) to continue operating until the lawsuit with the broadcasters is resolved, which could take years. “We were disappointed that NBC News didn’t include a mention about the court decisions,” Virginia Lam, an Aereo spokesperson, told The Verge. “All we ask are that the facts be reported.”

A spokesperson for NBC News disagreed. “The report was a fair and straightforward telling of how the service operates in the changing media environment. It fully explained why Aereo argues that the service is legal, and included an interview with Kanojia. In the interest of full disclosure, it also noted that NBCUniversal, the parent company of NBC News, has filed suit against the service.”

 [flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Bloomberg Broadcasters vs Aereo 4-15-13.flv[/flv]

Robert Prather, president of local station owner Gray Television, tells Bloomberg News station owners are still trying to figure out what Aereo means for their business models. (3 minutes)

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Bloomberg Aereo CEO Responds to Fox Threats 4-17-13.flv[/flv]

Aereo’s CEO responded today to threats from Fox to turn its network into a pay cable service, suggesting that if Fox wanted to abandon over the air service, someone else might make use of that spectrum.  (3 minutes)

Second TV Network Threatening to Sign Off Free Airwaves if Aereo Lives

univisionUnivision is joining Fox Television warning that if an upstart online video streaming service is allowed to stay in business, it will seriously consider turning off its free to watch over-the-air programming and go pay cable only.

Univision chairman Haim Saban says if Aereo continues to sell online streaming of its over the air stations, it could be forced to turn off more than 50 local broadcast affiliates, forcing viewers to cable, satellite, or telco pay television to keep watching.

Univision is no longer a small player in American broadcasting. The Spanish language network is now more popular than NBC in the ratings.

Saban says its local affiliates could find themselves off the air if the network abandons them — Univision’s network programming occupies most of the broadcast day, with most local stations airing only local news and a small selection of syndicated programming and program length commercials.

“To serve our community, we need to protect our product and revenue streams and therefore we too are considering all of our options — including converting to pay TV,” Saban said. “With Hispanics watching over-the-air news and entertainment at twice the rate of non-Hispanics, being forced to convert to cable would significantly impact this community.”

FOX-TV-logoThe real threat, according to industry analysts, is Aereo’s business model could offer an end run around lucrative retransmission consent fees now demanded by broadcast networks and local television stations. If the cable, satellite, and telco TV industry were to license Aereo’s technology, it could carry broadcast stations for free without paying broadcasters for permission to put their stations on the lineup.

The collateral damage could be felt by more than 13 million American households that have either abandoned pay television, can’t afford the asking price, or don’t have access for other reasons. If the networks make good on their threats, viewers would no longer have access to network programming for free.

Industry observers suggest Fox and Univision are engaged in saber-rattling for the benefit of Washington lawmakers that might be asked to choose sides in the dispute.

Aereo has responded to the industry’s line in the sand by reminding the networks they are violating a long-standing deal they made with Congress in return for access to the public airwaves.

“It’s disappointing to hear that Fox believes that consumers should not be permitted to use an antenna to access free-to-air broadcast television [after promising] that they would broadcast in the public interest and convenience, and that they would remain free-to-air.”

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/Bloomberg RBCs Bank on Aereo Fox Broadcast Dispute 4-8-13.mp4[/flv]

Bloomberg News reports on the conflict between Aereo and over the air broadcasters and how far both sides are really willing to go.  (5 minutes)

[flv]http://www.phillipdampier.com/video/CNBC Aereo Broadcaster Battle 4-8-13.mp4[/flv]

CNBC’s Julia Boorstein reports on Fox’s assertion Aereo is “pirating their signal” and notes the network may be preparing to convert its over the air free service into a pay channel.  (2 minutes)

[flv]http://www.phillipdampier.com/video/CNBC Why News Corp Is Trying to Outfox a Start-Up 4-13.mp4[/flv]

CNBC talks with Aereo founder Chet Kanojia about the court decision to allow Aereo to keep operating. Kanojia also explains how Aereo works for consumers who don’t want to pay for a big cable TV package.  (6 minutes)

HissyFitWatch: Fox TV Threatens Nuclear Option: “Subscription TV” if Aereo Decision Stands

Phillip Dampier April 8, 2013 Consumer News, HissyFitWatch, Online Video, Video 13 Comments

aereo_logoFox Television’s over the air signal may be scrambled and available “only by subscription” if the courts do not reverse their decision to allow an upstart television streaming service to continue operations while a broadcaster-backed lawsuit works through the legal system.

Aereo has been streaming New York City local stations to area residents that lease a tiny dime-sized antenna and receive the stations via the Internet. Broadcasters consider Aereo an end run around copyright law and retransmission consent fees paid by cable, satellite, and telco-TV operators. With millions in licensing fees at stake, several networks immediately filed suit to force the service to suspend operations.

But the 2nd Circuit Court of Appeals ruled in a 2-1 decision last month that Aereo’s streaming service did not represent a “public performance,” meaning the company was not infringing on the copyrights of broadcasters. Until a final court ruling is made, Aereo can continue operating, the judges ruled.

That decision prompted a hissy fit by News Corporation’s president and chief operating officer, who declared he is considering turning the Fox television network into a subscription-only service, potentially meaning the service would be scrambled and unavailable for free over-the-air in the future.

“Aereo is stealing our signal,” Chase Carey said at the opening of the National Association of Broadcasters’ convention is Las Vegas last night. “If we can’t have our rights properly protected through legal and governmental solutions, we will pursue business solution. One solution would be to take the network and make it a subscription service. We’re not going to sit idly by and let people steal our content.”

[flv width=”640″ height=”380”]http://www.phillipdampier.com/video/Bloomberg News Corp to Take Fox Off Air If Courts Back Aereo 4-8-13.flv[/flv]

Bloomberg Television explores Fox’s “nuclear option” of scrambling its broadcast outlets and forcing all Americans to pay for its content. (2 minutes)

[flv width=”384″ height=”236″]http://www.phillipdampier.com/video/CNN Money Aereo TV 3-13.flv[/flv]

CNN Money explains Aereo and its threat to the traditional broadcast retransmission consent fee system that has made over-the-air networks highly profitable with subscriber fees paid by your cable, satellite, or telco-TV provider and passed on to you in the form of higher cable or satellite bills.  (2 minutes)

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