How Americans view television is what is at stake in a case that goes before the U.S. Supreme Court on Tuesday, and the stakes are so high that the Obama Administration has decided to weigh in on the issue.
The case of involves the Who’s Who of Media giants as petitioners – ABC, Disney Enterprises Inc, CBS, NBC, Universal, Telemundo, Fox, Twentieth Century Fox, Univision and PBS – that are going against a start-up company, Aereo Inc.
Aereo began putting tiny remote antennas designed to capture broadcast TV signals and load them up in the cloud where consumers pay up to $12 a month to watch the recorded programs from major media outlets and public education.
If the U.S. Supreme Court sides with Aereo’s owner Chet Kanojia, it will be a major blow to the media giants who won’t be able to sell lucrative cable bundle packages and cable companies could lose millions of customers.
Revenue to media outlets for being part of the cable package will decrease tremendously.
“It is a crafty workaround to existing regulations, which rides on the Cablevision court ruling in 2008, which held that consumers had the right, through their cable boxes, to record programming. But then, cable companies pay broadcasters billions in so-called retransmission fees while Aereo pays them exactly nothing. (And the case is not just about Aereo — it opens the gate for cable companies or others to build a similar service and skip the billions in payments to the networks.),” writes David Carr of the New York Times.
Last month, the U.S. Solicitor General’s office entered the Aereo legal fray with a thick brief filed at the Supreme Court and on the side of the broadcasters alleging that Aerero is infringing on copyrights.