Many technology companies are touted as “disruptive.” But very few find their alleged disruptive cred being assessed by the Supreme Court of the United States.
That’s why Aereo has been all over the headlines this week. The company, and its big-television-network opponents, presented the highest court in the land with arguments that it is either a wildly beneficial innovator — or a shameless thief seeking to profit from the intellectual labors of others. The court’s ruling (which probably won’t arrive until this summer) will supposedly determine the future of television.
Plenty of smart people suspect the networks will prevail, and when I view the case through the cold lens of the law, I will admit that they may be right. But forget predictions. What makes sense in the tech-driven entertainment world we actually inhabit? What should the Supremes conclude? What should you conclude?
The answer is that the court should take Aereo’s side in this argument. And the more I think about it, I’d say even the networks should be pro-Aereo.
Here’s the basic background. (If you already feel confident about that, skip ahead two paragraphs.)
Once upon a time, programming from television (and, before that, radio) networks found its way into American homes by traveling over the airwaves, through a physical antenna, and into TV sets in countless living rooms. Then cable emerged as an alternative means of delivering programming to screens in homes; providers gave us access to lots of new channels but also wanted to keep the traditional broadcast networks on the menu. So they paid those networks a fee in order to do so.
Aereo has set out to offer us — for $8 to $12 a month — another way to access broadcast programming on mobile devices and other screen-centric objects And it is not paying networks for the privilege. To pull this off, it has gone back to the future, with a setup involving many thousands of teeny-tiny antennas that live in a central location. Each links up with a specific customer, via a cloud-style system: Viewers can stream a network show or save it for later.
Company CEO Chet Kanojia speaks about the technology and the company’s legal travails in this interview with Yahoo News’ Katie Couric here. My Yahoo Tech colleague David Pogue reviews the product from a consumer point of view here. Bottom line: He finds it rather impressive — but does not sound optimistic that it will survive its Supreme Court showdown with the big networks.
Aereo CEO Kanojia, holding one of Aereo’s antennas. Image: AP
So what exactly is it that the networks object to about Aereo? The sound-bite version: “We believe that Aereo’s business model,” a typical CBS statement goes, is “built on stealing the creative content of others.” Networks spend a lot of money developing and acquiring shows, and it’s not cool for some third-party leech to come along and build a business around that without giving the networks a dime.
The specific legal argument turns on an idea that to most of us will sound a little esoteric. Aereo claims that it is in essence doing nothing different than, say, selling miniature antennas and wee DVR-equivalents that somehow physically connect to your iPad. But because its process involves distributing content via the Internet, the networks counter, that makes Aereo-viewed content a “public performance,” which prior case law has determined to be a definitive no-no. (Thus some observers fear that a broad anti-Aereo ruling could impact a variety of cloud-content business schemes. Legal geeks seeking a comprehensive backgrounder on the relevant case law and arguments: This SCOTUSBlog piece is for you.)
Aereo has won some lower-court squabbles with the networks, but one dissenting federal judge along the way sneeringly summed up the skeptics’ view: Aereo’s system is “a Rube Goldberg-like contrivance, over-engineered in an attempt to avoid the reach of the Copyright Act and to take advantage of a perceived loophole in the law.”
To which I’d say: Well … yeah. And it’s pretty freaking impressive! That’s why people like it. Besides, isn’t dreaming up new technologies that offer consumers appealing options within the context of existing rules and realities kind of the whole point of innovation?
In the court of public opinion, the networks suggest that Aereo is an existential threat — Americans will “cut the cord” on their cable packages en masse, and the lost licensing fees that result will cripple the networks. This explains the “future of television” hype surrounding the case.
But this scenario is almost certainly overblown. Consider the hypothetical of relying on Netflix and Amazon Prime, ditching cable, and “still spend[ing] a Sunday afternoon watching the NFL and 60 Minutes immediately afterward.” That only works if you don’t happen to want to see an NFL game that’s on, say, ESPN. And if you’re more keen on catching Mad Men live than 60 Minutes, you’re out of luck.
A laptop with the Aereo website loaded. Image: Getty Images
Most cable subscribers don’t think about television in terms of network vs. cable content — it’s all just shows, on channels. Sure, we’re annoyed about paying for bundled-in channels we don’t care about. But Aereo doesn’t solve that problem: In cities where it’s available, it gives you access to five or six stations, and a bunch of add-on content of dubious interest. So hype aside, even an Aereo victory at the court doesn’t mean its business is a slam-dunk winner. In real life, its impact on the slow-moving cord-cutting trend would be marginal.
And remember just a few years ago when the networks were freaking out about TiVo? That was supposed to be an existential threat because it imperiled advertising revenue — still a much bigger deal to networks’ business than cable fees. If anything, Aereo ought to expand the networks’ audiences, by giving consumers new and convenient ways to watch their shows (and see their ads). And, let’s face it, one way or another, the stuff we think of as “TV” has been finding its way to other screens for years, and that’s not going to change.
Lastly, there’s more at stake here than the impact on the networks’ bottom line. Let’s remember that the broadcast networks are beneficiaries of one of the most astonishing deals in the history of business: free access to the airwaves. All they were supposed to do in return for this incredible profit-making opportunity was offer some amount of programming in the public interest — think about that the next time you suffer through a laughable installment of your local news, because that’s how they have fulfilled that obligation.
But let’s get back to the public interest, shall we? I’m tired of hearing what the court’s ruling might mean for this or that major media company. I want to focus on what it might mean for us. I think Aereo is a good thing for the public. And if that means the networks have to adjust their business models, then so be it. I hope the court sees it that way, too.
If you missed the links above:
• Here’s David Pogue’s review of Aereo’s actual product.
• Here is Katie Couric’s interview with Aereo CEO Chet Kanojia.
• Here is Alyssa Bereznak’s guide to watching free and legal TV online.
• And here is Dan Tynan’s guide to cutting the cord.