Aereo Inc. has decided to shut down its business or “press pause,” as CEO Chet Kanojia wrote to Aereo customers, after a 6-3 Supreme Court decision issued on June 25, 2014.  The Supreme Court held that the startup violated the copyrights of the major television networks by retransmitting their broadcasts to Aereo customers for a small fee. The Supreme Court decision overturned a divided Second Circuit decision according to which Aereo did not violate any copyrights.

The basic division in reasoning is based on the classification of Aereo’s service and whether it is more comparable to a DVR or VCR home recording of a program which does not infringe copyrights, or to a retransmission of copyrighted broadcast programs which is unauthorized.  The Majority, led by Justice Stephen Breyer found the later.  Despite Aereo’s argument that the performance they transmit is actually the individuals own private recording created by the user and is thus private rather than public.  Aereo’s argument that the service is more like a DVR private recording stems from the technology behind the streaming service. Each user when they decide to watch a particular program is assigned an individual antenna that only they can use at that time.  When the subscriber chooses to save a program for later, the program is copied and placed in the individuals’ private directory, and when more than one user wants to view the same program a separate copy is created for each individual.  The Majority found that these technical differences were not enough to distinguish Aereo’s commercial objective from cable companies and were, thus, not relevant in determining the applicability of congressional regulation.  The Court determined that Aereo “was publicly performing the networks programs” and consequently violating the exclusive rights of the broadcast companies under the Federal Copyright Act.

The dissent led by Justice Antonin Scalia wrote that Aereo did not “perform” the programs because the subscribers chose the content.  Justice Scalia also criticized the majority for “disregarding widely accepted rules for service-provider liability and adopting in their place an improvised standard, ‘looks-like-cable-TV,’ that will sow confusion for years to come.”

Although this case is regarded as one of the most important copyright cases to reach the Supreme Court in the last decade there are, a multitude of factors could potentially reduce the impact of this decision.  For instance, Aereo is one of many companies that are part of a digital and technological landscape and taking down just one of them does not necessarily mean great strides for copyright law.  Where one service is disbanded, ten more come in its place and those are just the ones that charge fees; there are thousands of sites where users can stream television programing for free.  In addition to the breadth of other availability, the number of households in the United States subscribing to traditional television services has fallen in recent years.  According to research firm SNL Kagan, “about 101 million households in the United States subscribe to pay TV, down 7 percent from 2013, while the total number of households that use the Internet or other streaming services instead of traditional TV has climbed to 7.6 million, up about 30 percent from 5.8 million in 2013.”  Companies similar to Aereo, like Mohu and Simple.TV, sparred no time in taking advantage of the Supreme Court decision poaching customers with pitches like “Former Aereo customer?  Join the Simple.TV Family.”  Mohu founder Mark Buff was thankful for Aereo and the publicity of the decision stating: “Aereo made people aware that they can get high-definition broadcast television for free without paying for cable.”  The main difference between these companies and Aereo is that customers own the antennas and capture the programming in their own homes rather than renting a remote antenna.  These companies believe that where the signal is captured makes all the difference and these services will satisfy copyright requirements.  Justice Breyer’s opinion leaves it to be seen whether these companies are as safe as they believe they are, and whether they will be the next target of the multi-billion dollar television industries copyright battles.