Supreme Court to Aereo: You’re Out

20120110094716!SCOTUSbuilding_1st_Street_SEEnding months of wondering and worrying, the nation’s major broadcasters dodged a major bullet Wednesday when the U.S. Supreme Court ruled in favor of them in their case against Aereo (ABC v. Aereo), an Internet startup company which took (or some say stole) broadcasters’ signals and allows subscribers to watch on their laptops, smartphones, and other devices – without Aereo paying for the signals. Aereo – much like the cable and satellite companies – now need to pay them if they want to stay in business.

While Aereo CEO Chet Kanojia acknowledged his company would continue to fight on, major investor and former Fox CEO Barry Diller simply said “It’s over”.

Aereo was available in mostly major east coast markets such as New York, Boston, and Atlanta. A planned Aereo launch last fall in Chicago was scrapped due to major tech issues.

Aereo relied on dime-sized antennas to capture signals and relayed them to subscribers. Major broadcasters went to court and used Aereo for copyright infringement, losing each time until the case reached the Supreme Court. Three networks (CBS, Fox, and Univision) even went as far as threatening to remove their over-the-air signals if the court ruled in Aereo’s favor, creating a “doomsday scenario” -a phrase riders of the CTA are all too familiar with.

Broadcasters had heavy artillery in their corner, with Major League Baseball and the NFL filing friend-of-the-court briefs.

The Supreme Court ruled 6-3 against Aereo, but in an interesting twist, three conservatives on the bench (Alito, Scalia, and Thomas) dissented and ruled in favor of Aereo and not the networks, all except PBS, are owned by corporate interests.

Reaction from the ruling varied greatly. Broadcasters, of course, praised the ruling. Also heaping praise were broadcast station groups, including Gannett and Tribune, as both recently made huge station deals.

SAG-AFTRA also praised the ruling, marking the first Hollywood union guild to speak publicity on Aereo. The Writers Guild Of America (the other major Hollywood union guild) declined to comment.

The FCC also declined to comment on the Aereo decision.

On the other hand, many consumers and tech geeks blasted the ruling, saying it stifles innovation.  Major organizations criticizing the ruling varied from the American Cable Association, the Parents Television Council, and the Consumer Electronics Association.

While broadcasters can now savior the victory over Aereo, they’d better not party too hard. The ruling clearly stifles innovation in the television business and Hollywood in general. And stopping Aereo isn’t going to reverse their declining audience shares, which continues to go to cable, satellite, and the Internet – the latter Aereo was using to transmit their signals. While broadcasters clearly dodged a bullet, the next “doomsday scenario” may be just around the corner.

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