Weekly Update

Will Aereo be the next Slingbox?

Since first emerging from stealth mode last year, under the name Bamboom, even the principals of the company now known as Aereo have wondered how long it would be before it got sued.

The company’s planned business model involves streaming broadcast TV signals over the Internet to both mobile and fixed devices for a price. Previous similar efforts, most notably by Ivi.tv, had attracted litigation for copyright infringement by a host of major broadcasters and were shut down by the courts. As Bamboom founder Chaitanya Kanojia told NewTeeVee’s Stacey Higginbotham in April, part of the company’s pitch to potential investors was that it needed money “for infrastructure and lawsuits.”

Now that Aereo is formally launching in New York, the litigation watch is on again. “We understand there will be challenges,” Kanojia said at a news conference on Tuesday to announce the launch. “We are building a transformative business and there will be challenges.”

Perhaps so. But functionally, the closest analogy to what Aereo is doing may be Slingbox, not Ivi.tv. And despite occasional threats, no broadcaster or content owner has ever sued Sling Media (now owned by EchoStar), a failure that ultimately could weaken any case brought against Aereo.

Launched in beta on Feb. 9, Aereo allows subscribers to receive broadcast TV signals over the Internet on any Internet-capable device via a browser-based player. At launch the service is limited to the New York DMA and offers 12 channels, including the major network affiliates, for $12 a month. Subscribers also get dual-tuner cloud-based DVR service, allowing them to record two programs at once. To be eligible for the service, users must provide a credit card billing address proving they live within the New York DMA.

Unlike Ivi.tv, which used a single “antenna farm” to receive the signals it retransmitted, Aereo has set up several large antenna arrays in Brooklyn, each with thousands of individual, dime-sized receivers capable of capturing over-the-air signals. Each subscriber is assigned a specific mini-antenna (actually two antennas if he is using the DVR service), and each antenna is individually turned on and off by the subscriber.

Whereas Ivi.tv claimed that its service qualified for the same compulsory license to retransmit broadcast signals that applies to cable and satellite TV systems — a position with which the court disagreed — Aereo insists it does not need a license, compulsory or otherwise, because its users are entitled to receive over-the-air signals for free and the company is simply providing the remote antenna by which they each individually receive them. Aereo officials also insist the $12 a month price is really a fee for the use of the antenna and the cloud-DVR system, not a content fee.

It is a similar argument to the one made by Sling Media officials for years. The Slingbox works by retransmitting signals from the user’s cable or satellite service over the Internet for remote viewing. Since users have already paid for access to the content, Sling officials insist, they are within their rights to access it where they choose.

If there is a weakness in that argument it is that Aereo and Slingbox do not merely provide remote access to signals their users are entitled to receive. They re-encode and reformat those signals for transmission over the Internet.

That is precisely the argument Major League Baseball raised against Sling Media in 2007, in fact. As MLB.com president Bob Bowman said at the time, the Slingbox “is not just a place-shifting device, it’s a delivery-shifting device.”

The problem in raising that argument now against Aereo, however, is that neither MLB nor any other content owner ever followed through on their threats to sue Slingbox. Instead, they have for years tolerated the unlicensed capture, re-encoding and retransmission of both broadcast and cable TV signals.

Why exactly no copyright owner or broadcaster has ever sued Slingbox is a mystery that has puzzled many copyright experts for years. Perhaps they feared losing such a case and establishing a precedent legalizing retransmission.

By tolerating it unchallenged for so long, however, they may inadvertently have established such a precedent anyway. If Aereo is ultimately sued, expect its lawyers to throw the plaintiffs’ failure to go after Slingbox back in their faces.

Question of the week

Why do you think no one has ever sued Slingbox over the re-encoding and retransmission of pay-TV signals?