August 8th, 2014
It’s becoming more and more likely that totally customer- and consumer-driven TV is not going to take over the media market anytime soon — no matter how successful Netflix is.
Aereoâ€™sÂ last-ditch gambit last weekÂ — to accelerate an appeal in U.S. district court — showed just how desperate the startup is to preserve its remaining cash, but also how distant the notion idea of Web-delivered TV remains.
Last week,Â Aereo askedÂ a U.S. District Court judge to accelerate its appeal of a Supreme Court decision that effectively shut down the Web-TV service June 28. The Supreme court ruling, while decisive, gave Aereo a little wiggle room. Specifically, whether Aereo should be classified as a cable company for copyright purposes. As Justice Sandra Sotomayor said, â€œtheyâ€™re a cable company, they get a compulsory license.â€
A cable company. Aereo, a two-year-old startup that attempted to re-map the TV ecosystem by leasing tiny antennas to users who pay $8 a month for over-the-air broadcasts on their computers, is now using those words as a last-ditch lifeline. Aereo now seeks to prove its the equivalent of a cable company in order to win a â€œcompulsory licenseâ€ for content, which means the TV companies that fought Aereo can’t deny it their signal.
Itâ€™s a longshot, in nearly everyoneâ€™s estimation, mostly because the courts have repeatedly said, rightly or wrongly, that over-the-Web transmission isn’t broadcast for copyright purposes and therefore not the equivalent of cable TV. “They had a viable loophole the first time around,” Brent Skorup, a telecom policy scholar at George Mason University’s Mercatus Center, said. “Now they are trying to thread a much thinner needle.”
Aereo, whichÂ raised nearly $100 million, has enough cash to make its argument but not much more. In a filing, CEO Chet Kanojia said the company has enough capital to last another six or seven months. The final hearing on a potential injunction is scheduled for Sept. 5. In the meantime, Aereo is bleeding users and employees while it suspends service. Aereo didn’t respond to a request for comment.
But even if Aereo were allowed to continue operating as a cable company, the question is how long that would last. Some of the biggest tech companies on earth have attempted to take on Comcast, DirecTV and Time Warner only to find that the cost of content, access to bandwidth and in some cases set-top hardware make the cable business just too expensive. At the end of the day, youâ€™re still paying for content, and then paying the companies youâ€™re trying to disrupt — cable and telcos — for broadband access to the home.
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