19 Comments

Summary:

Sports leagues filed a petition in support of broadcasters’ request to shut down Aereo at the Supreme Court. The filing shows how Aereo has become a high-stakes threat, and provides a window into the evolving economics of digital TV.

nfl sunday ticket

In the latest sign of how Aereo has become a strategic threat to the TV industry, the National Football League and Major League Baseball have joined the four major broadcasters in asking the Supreme Court to stop the upstart service, which lets subscribers stream over-the-air TV to laptops and mobile devices for $8/month.

The sports leagues argue that Aereo is undercutting the value of the deals they sign with TV companies, and that they will have to respond by moving all of their games to cable stations like ESPN and NFL Network. Currently, the NFL distributes 90% of its games via the broadcasters — CBS, NBC, ABC and FOX — while MLB shows 400 games a year and the World Series this way.

In a friend-of-the-court brief, reported by Variety and embedded below, the leagues warn that Aereo: “adversely impacts the more than eleven million households in the United States that do not subscribe to cable or satellite and thus do not receive non-broadcast cable networks.”

The leagues and the broadcasters are asking the Supreme Court to step in and overrule a finding by an influential New York appeals courts’ repeated findings that Aereo, which relies on tiny antennas to deliver a personal TV stream, does not violate copyright law.

It’s uncertain, however, if the Supreme Court will hear the case in the current term which ends in June, or if the Justices will wait until the 2014-15 term. Court watchers note that there is a current split in the law between the east and west coasts, but that an appeals court in California (where Aereo-like services are now illegal) has yet to rule — meaning the case may be premature.

The NFL and MLB brief is also significant because it provides a window into the evolving economics of TV in the digital era. It notes, for instance, that cable and satellite systems like Time Warner or Dish now pay $300 million a year for “retransmission rights” from the broadcasters, and that the sports leagues get $100 million of that.

The leagues also regard Aereo as a threat to their strategy of slicing up online sports rights into smaller and smaller pies — through products like NFL Sunday Ticket (which allows Direc-TV subscribers to watch out-of-market Sunday games) and NFL Mobile, which saw Verizon pay $1 billion for the rights to stream some games to cellphones but not tablets.

In the view of the leagues, the Supreme Court should overrule the New York decision because it “unravels the foundation of this business model by giving broadcast retransmission rights to unlicensed commercial strangers.”

Aereo, meanwhile, has been on a roll of late, winning the rights to stream its service in Boston while going live in many more markets like Detroit and Miami. Aereo CEO, Chet Kanojia, has vowed to crush the current “bundle” model of TV which forces consumers to buy dozens of channels they don’t want in order to watch the channels they do.

Here’s the NFL and MLB brief. I’ve underlined some of the key parts:

NLB MLB Amicus brief in Aereo case

  1. Being a Seahawks fan that just moved to New Jersey for work reasons, I’ve become incensed at the way the NFL forces consumers to watch things we don’t want (Philly and Giants games…ugh!). Long story short, go Aereo, some of these biz models do need disrupting because the NFL in particular is abusing its monopoly.

    Share
  2. Aereo, meanwhile, has been on a role of late . . .role or roll?

    Share
    1. yup, “roll”.. thanks for flagging.. that’s fixed

      Share
  3. If broadcasters are going to use public airwaves for their product, Aereo is fine. If these same broadcasters would like to move to cable/satellite model pay model, then return the broadcast spectrum so that it can be repurposed for other uses; Aereo is out of business.

    You shouldn’t be able to have it both ways.

    Share
    1. It’s not the broadcasters threatening to do this, it’s the leagues (NFL and MLB). Don’t punish the broadcasters because the Leagues are acting like titty-babies.

      Share
      1. But the broadcasters HAVE been threatening to do this. They started this whining party.

        Share
  4. As one of those eleven million households it sickens me that the NFL and MLB are threatening to shoot the hostages if the Supreme Court doesn’t stop Aero. Furthermore, I thought ‘felony interference with a business model’ was a tounge in cheek mock of these sort of competition by litigation strategies yet they seem to be using it as their literal argument. Maybe no one told them how ludicrous it sounds to claim something should be illegal simply because they’d make more money that way…

    Share
  5. Agree with Rock Science . . .we have the Big Ten adding teams like Penn State to give the conference broader geographic coverage. Meanwhile, cable and satellite TV providers aren’t allowed to offer unbundled programming.

    For example, Packers fans living in Illinois without top tier cable/satellite packages couldn’t watch the first Packers vs. Bears matchup of the 2012-13 season. Why? Because the Thursday night game was broadcast only on the NFL Network.

    The NFL (and MLB, NBA, etc.) needs to wake up and begin offering more unbundled choice. Live TV streaming will be mainstream very soon, and Aereo is currently the best way for them to monetize their audience. The alternative, for students of history, is the next Napster.

    Share
  6. Boohoo.I only wish I could view Boston Aereo outside of my market area. Like I do now with Slingbox.

    Share
  7. It is absolutely ridiculous that we have to pay for cable or TV at all and then be forced to watch commercials. NFL needs to wake up and enable online streaming via their website just like MLS and others do.

    Share
  8. What’s the difference between me TiVo’ing a game OTA with an antenna in my house vs. TiVo’ing a game OTA with an antenna I rent from someone else?

    Share
  9. Aereo is on a roll because this is settled law. The U.S. Supreme Court decided this 45 years ago in the case of “Fortnightly Corp. v. United Artists Television, Inc., 392 U.S. 390 (1968)”.

    Aereo is an antenna service, not a broadcaster. They provide broadcaster content, commercials included, to people who might otherwise getting the signal, were it not for some natural obstacle.

    Cheers,

    New Metro

    Share
    1. Nice find on that case! Here’s a link, if anyone is interested in reading the details. You can read more details by clicking on “case” under the title: http://supreme.justia.com/cases/federal/us/392/390/

      Share
    2. Wow, I’m actually reading the details of the case, and that thing is like a torpedo to the broadcasters’ arguments. Just substitute “Aereo” in for “CATV”, and it basically reads like what Aereo is doing, except that the CATV systems didn’t even need to have individual antennas for each user to justify their existence, just a single one.

      Now, the question is whether this has been superceded by other laws that congress has enacted since 1968. I would not be surprised if the copyright lobby got to them and fixed this hole really quick.

      Share
  10. You know it’s right when big money hungry entities are getting scared and running to the government to tell mommy. Streaming is the future, it is now. Either make subscriptions that are sensible and accessible to everyone or someone else will do it.

    Share

Comments have been disabled for this post