The U.S. Court of Appeals for the Second Circuit in New York ruled Aereo, which lifts the over-the-air signals of local television stations and streams them to phones and tablets of paying subscribers, is not infringing any of the network’s copyrighted material.
The ruling sparked outrage from some executives. During NAB in Vegas earlier this week, News Corp President Chase Carey said Fox may have to pull its content off broadcast airwaves and take it to a pay only cable subscriber if the legal system doesn’t force Aereo and other similar live streaming services to pay the network to broadcast its signal.
Haim Saban, Chairman of Univision, agreed with Fox. He called Aereo a pirate and defended his position saying, “we need to protect our product and revenue streams and therefore we, too, are considering all of our options — including converting to pay TV.”
Several networks, including Fox, CBS, NBC, ABC first sued Aereo last year, claiming the service engaged in copyright theft. So far, Aereo has withstood legal challenges to its business.
At issue are the retransmission fees. Cable and satellite operators have to pay the networks to transmit their signal. But Aereo is offering the TV streaming service without paying those fees to the networks.
To put it in perspective, according to the New York Times, SNL Kagan estimates station owners made $2.36 billion in retransmission fees from subscribers in 2012.
The question is whether Fox and Univision are really serious with their threats, which could bring about a whole series of other problems for local TV stations.
For example, as the Los Angeles Times points out, “If Fox were to pull its network programming off the air, the local stations would have to fill 15 hours of prime time a week.”
Aereo is currently only available in the New York City market, but plans to expand to 22 other U.S. cities later this year.