Broadcasters and Barry Diller are locked in lawsuits over Aereo, a service backed by Diller that lets subscribers watch TV on Apple (s aapl) products like the iPhone or iPad. The two sides appear to have found common ground, however, in their desire to shut down an Aereo competitor.
Diller, who used to run Paramount and Fox, filed a complaint this week against BarryDriller.com, a new service that offers TV-on-the-go to west coast markets. The complaint notes Diller’s fame based on works like Raiders of the Lost Ark and Grease, and accuses BarryDriller of cyber-squatting, trademark infringement and stepping on Diller’s right to publicity. Diller had initially joked about BarryDriller, telling the Wall Street Journal, “I had hoped that if they steal my name they’d do it for something more provocative.”
Diller’s suit comes on the heels of a Fox lawsuit that says BarryDriller infringes the copyright for shows like The Simpsons and Glee. BarryDriller is run by David Alki, who launched the short-lived FilmON, a TV streaming service that the entertainment industry smothered in 2010. He appears to have named the new venture BarryDriller in an effort to generate publicity and, possibly, to stick a finger in the eye of Diller.
While Fox may be on the same side as Diller against BarryDriller, it is also part of a major effort by broadcasters to shut down his Aereo business, which offers TV and DVR services for around $12 per month. Fox and other broadcasters say Aereo, like BarryDriller, infringes copyright though they have failed so far to win an injunction.
Technology advances lead to legal pile-up
New technology and changing notions of TV is what lies at the heart of the legal pile-up. Specifically, Diller’s Aereo has been relying on a legal loophole that says one-to-one transmission is not broadcasting and therefore shouldn’t be considered copyright infringement. To make the argument hold up, Aereo points to a novel technology that gives every subscriber a dime-size antenna. Each antenna relays a personalized stream of over-the-air TV signals to subscribers’ iPhones.
Aereo also says its service is the legal equivalent of remote DVR recording technology, which courts have said doesn’t infringe copyright. But the broadcasters disagree, and claim Aereo is hiding behind a technicality. They says the “one antenna one user” theory doesn’t change the fact that Aereo is retransmitting shows without permission.
The dispute is about law, but also about money of course. The broadcasters recently won a drawn-out battle to force cable companies to pay them for retransmitting their shows and now, one suspects, they want Aereo to pay too. Diller, for now, says Aereo has no obligation to pay. BarryDriller’s Alki, on the other hand, has offered to pay retransmission fees.
If they build it, will anyone watch?
The legal snafus that have greeted new services like Aereo and FilmOn are part of a long-running pattern in which incumbent broadcasting interests want to control platforms against new disrupters.
In this case, however, copyright and copycats like BarryDriller may not be Aereo’s biggest problem. Instead, there is a question of whether the service will be viable from a business perspective. Aereo, which for now is only available in New York, is experimenting with new pricing incentives to get people to try the service but for now its prospects look uncertain at best.
Dan Rayburn, an analyst with Frost & Sullivan, recently told the LA Times that Aereo was “dead in the water for multiple reasons” even if it can win its court challenge.
Part of Aereo’s problem may be that there simply may not be that many situations where people want to pay to watch broadcast TV on a mobile device.
Here’s the legal complaint, which asks the defendant to hand over the BarryDriller.com name and to pay damages to Diller:
(Ed note: an earlier headline suggested it was Aereo who filed the suit. It is Barry Diller who is suing).