Aereo finally agrees it's a cable company in a last-ditch effort to survive
In June, the Supreme Court ruled that Aereo must acquire licenses for the television shows it recorded from over-the-air broadcasts and made available to consumers because it was effectively operating as a cable company. Now Aereo is attempting to use that ruling, which was seen by many as a death sentence for the company, to continue operating.
Aereo is now arguing that the Supreme Court's opinion should grant it access to compulsory licenses to the content. It has sent a letter to a district judge that embraces its newfound status as a glorified cable company with applications instead of a set-top box.
The Wall Street Journal explains the benefit of receiving compulsory licenses, which has been widely regarded as a last-ditch effort to avoid destruction:
Cable systems are able to get compulsory copyright licenses for the broadcast channels they rebroadcast, meaning they don't have to seek individual permission for every copyrighted piece of content. Compulsory license fees are paid to the Copyright Office and are generally considered inexpensive, according to media lawyers. Cable systems then typically pay broadcasters for the right to broadcast their feeds through negotiated retransmission consent agreements.This arrangement could allow Aereo to continue operating without having to receive licenses for every show it offers to consumers -- licenses it's unlikely to receive, considering all the work cable companies have put into killing the company. Those same companies argue that Aereo's new stance is ludicrous, given its attempts to prove it's not a cable system to the courts, so it's clear that the industry isn't going to accept the company into the fold any time soon.
Re/code notes that Aereo's attempt to receive compulsory licenses isn't anything new. It might be the first startup able to receive them, but it's hardly the first startup to seek access to them:
Four years ago, a lower court rejected a similar argument from a video streaming startup, Ivi, which wanted to be considered a cable system under the Copyright Act. Aereo argued Wednesday that the Supreme Court’s decision overruled that lower court decision and means it should be allowed to restart its operations as a cable company.
Several industry observers, including BTIG Research’s Richard Greenfield made a similar point a few weeks ago, suggesting that the high court had possibly opened the door for this sort of argument from online video streaming companies. So Aereo might be able to continue operating, and it might just establish a precedent for other companies hoping to receive compulsory licenses instead of having to beg cable companies for access to their shows. In doing so, the company will prove that the Supreme Court was right to think there's little difference between it and the cable companies it has fought for years. I can't say that I'm surprised, since I agreed with the Supreme Court in my report on the ruling:
In its decision the Supreme Court decided that Aereo was, for all intents and purposes, acting like a cable company. If you ignore the slight differences between the startup company and its legacy predecessors — using applications instead of television channels and antennas instead of cable boxes — you’re left with a company that took free broadcasts and charged people for the right to view them. That’s a cable company.Now it seems that Aereo agrees, too.