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No rational CEO chooses to take a company’s business model before the Supreme Court just for the publicity. But for Aereo, which gives the TV-less access to broadcast channels for $8-12 each month, making the legal case for the company’s business model has been a bonanza of earned media.
The case itself, argued Tuesday before the Supreme Court, pits the two-year-old company against big broadcasters (CBS, NBC, ABC, Fox) that think Aereo is using its technology–tiny, remote antennas, one per customer, that capture TV broadcasts and stream them to individual users–to, essentially, steal copyrighted content. Because the legal issues at stake here are rooted in technical bits of copyright law, covering public and private transmission of broadcast content, much of the coverage has focused on Aereo itself. Chet Kanojia, the company’s charming CEO has given interview after interview (enough to make this Tech Crunch boast of exclusivity seem particularly sad), and most of the storylines that have emerged–the tech story, the business story, and the political story– break to Aereo’s advantage.
The legal story may be the only exception.
The tech story
Big Content isn’t a fan of the tech press, and this is a good example why. No one’s celebrating broadcasters–in Ars Technica’s words, “the stodgy industry that once declared the VCR the enemy.” But tech journalists have taken this opportunity to laud the service Aereo provides. At Yahoo, the always exuberant David Pogue enthuses: “It all works incredibly well. It’s a joy to use, and everything works exactly the way you’d hope.” Gizmodo calls the technology “the most important ingredient in the cord cutter’s cocktail, giving you access to live, appointment television–the Oscars, say, or major sporting events carried by the networks–along with DVR powers, all for far less than your cable bill demands.” I’ve known about Aereo for awhile, and stories like these made me wonder why in the world I hadn’t signed up for it already.
The spurt of technology coverage, though, also meant a few examples of a story I’ve been looking out for: a close look at what the technology actually entails. Up until now, most coverage of the company has relied on the Aereo’s own description of its technology. But in the past few weeks, Bloomberg TV visited the company’s manufacturing facility, CNN visited one of its antenna farms, and CNET not only visited but wrote a thorough break-down how the technology works. These stories require the company to make its operations that much more transparent–but they still give the company’s innovations positive coverage.
The business story
At base, Aereo’s is a story about a company that’s challenging the current economics of TV, by threatening to steal away subscribers from cable companies, which pay broadcasters transmission fees. The broadcast industry doesn’t come particularly well here, either. It does a pretty good job of acting the part of, well, “the stodgy industry that once declared the VCR the enemy.” In Inc.’s coverage, it’s “the establishment,” kicking up a fit because it could lose income. In Bloomberg Businessweek, Kanojia gets to say that “he spent seven or eight months trying to interest media companies in working together” to no avail, and Barry Diller, the media modul and Aereo backer, gets to say that he’s just trying to make it so “consumers can buy programming they want, rather than the packages offered through cable and satellite.”
Not all of the business coverage gets into the long-term consequences of that. David Carr’s New York Times story probably does the best job, and points out that broadcasters aren’t just big business: “There are over 200 local broadcast affiliates, all of which depend on networks for a share of revenue and much of their programming,” he writes. “Local news, which is part of their mandate as public broadcasters, might wither.”
Aereo doesn’t come off as a totally virtuous David to the broadcasters’ Goliath, either. The company has a lot at stake in this court case: it’s hard to imagine it will survive if the decision goes against it. But it’s not clear that it’ll survive anyway, and as Recode points out, Aereo won’t share numbers on how many current subscribers it has. Still, the overall picture is of a scrappy upstart taking on a huge industry, in a way that, at least at first, could benefit the average Joe who spends too much on cable.
The political story
The politics of this case are not particularly complicated. The Obama administration’s Justice Department took the side of the broadcasters, and siding with big business never looks good. It doesn’t take a huge logical leap to agree with Diller’s analysis in The Hill: “I believe the only reason — the only reason — they have supported this is because of the broadcasting lobby.”
The legal story
In the lead-up to Tuesday’s oral arguments, few outlets actually tackled the legal issues the court would be assessing. You wouldn’t know it from the many, many optimistic quotes Chet Kanojia gave to the tech and business press, but Aereo does not clearly have the law on its side. Current copyright law requires that anyone who’s transmitting copyrighted content for a “public performance” pay a fee to the copyright holder; Aereo argues, essentially, that each of its mini-antennas is transmitting a “private performance” to a particular user.
Of the pieces that did take on the legal questions, Michelle Dean’s explanation at Gawker is probably the clearest and most engaging. Vox’s Timothy B. Lee has a stack of cards that does a solid job of giving the legal history of public vs. private performance and how it applies to this case. The Verge actually tackles “the transmit cause”–the bit of law that broadcasters think Aereo is breaking. Ars makes a very smart comparison between the broadcast industry’s argument in the 1984 Sony Betamax case–an important precedent–and the one broadcasters are making now.
According to the reports coming out of the Tuesday hearing, the Supreme Court justices were not as sold on Aereo as some of the press. Some of them, including Chief Justice John Roberts, indicated that they were sympathetic to the broadcasters’ argument that Aereo’s technology was intended specifically to circumvent the law–not a good sign for Aereo. But the court was also concerned that ruling against Aereo would mean ruling against a broader group of cloud-based services. Reporters and policy wonks who’ve been following the case closely came away with opposite views about which side had the advantage.
If Aereo survives this case–the ruling’s not expected until the end of June–it’ll have benefitted hugely from the boost of positive coverage that its legal troubles generated. Plenty of people are hearing of the service for the first time and thinking–Hey, I want that. But it’s not entirely clear that’s how the story will end.
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