Supreme Court Aereo

Aereo pulls the plug & gives money back but is still wondering if there's a way ahead


By Noel Young, Correspondent

June 30, 2014 | 4 min read

Aereo, the startup firm that threatened to upend America's television industry, hit the pause button at the weekend - but is still figuring out if there is a way ahead

Kanojia: Money back letter goes out

Three days after the Supreme Court ruled that Aereo had violated copyright laws by capturing broadcast signals on miniature antennas and transmitting them to subscribers for a fee, the company suspended its service.

“We have decided to pause our operations temporarily as we consult with the court and map out our next steps,” Chet Kanojia, Aereo’s chief executive, said in a letter to customers sent Saturday morning under the heading “Standing Together for Innovation, Progress and Technology.”

Aereo said the service would not be available after 11:30 am Saturday and it would give users a refund for their last paid month, the New York Times reported .

One surprise: Despite all the fuss, the company had fewer than 500,000 subscribers in about a dozen metropolitan areas.

Aereo’s technology was developed in Boston by Kanojia. Though the company is based in New York, most employees are in a large engineering office in Boston’s Innovation District. Its service is available in most of Eastern and Central Massachusetts and in Southern New Hampshire.

Installed in fixtures on the tops of buildings, each tiny Aereo antenna was dedicated to an individual customer. Starting at $8 a month, the service allows customers to watch shows on their own schedules, not those of the cable service or network station.

In a six-to-three decision last Wednesday, the Supreme Court sided with broadcasters. The ruling which has taken Aereo off the air comes as the foundation of the media business undergoes vast change reflecting a rush of new technologies and a rising number of consumers who are abandoning traditional pay-television subscriptions.

Aereo challenged the economics of the television business. Broadcasters worried that had the startup triumphed, it would have threatened the billions of dollars they received from cable and satellite companies in retransmission fees.

Broadcasters argued that Aereo’s business model violated copyright laws and was a high-tech way to steal their programs.

Aereo countered that its service was a digital-age solution for watching free over-the-air broadcasting.

The case was sent back to a lower court. Analysts said it would be nearly impossible for Aereo to continue with its current business model.

Before the decision, Aereo, which was founded in 2012, said that it had “no Plan B” if it lost in court.

But at the weekend , Kanojia said Aereo’s journey was “far from done.” A spokeswoman underscored that the company was not shutting down, merely temporarily stopping its service.

“The spectrum that the broadcasters use to transmit over-the-air programming belongs to the American public, and we believe you should have a right to access that live programming whether your antenna sits on the roof of your home, on top of your television or in the cloud,” Kanojia said in his letter to Aereo users.

Kanojia quoted Charles F. Kettering, an American engineer whose inventions were essential to the creation of the modern automobile: “The world hates change, yet it is the only thing that has brought progress.”

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