Roosevelt Institute | Cornell University

The End of Television as We Know it?

By Lucas BergerPublished April 26, 2014

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A Supreme Court Case that is expected to be ruled on sometime this summer could mark the end of major network televisions we know it.
They way people watch television is continually evolving. Long gone are the days of having to tune in to a certain channel at a certain time in order to watch your favorite shows. Slowly but surely users have been gaining more and more access to the content they want to watch. These changes have ranged from the advent of DVR companies such as TIVO, which make it possible to record programs for later viewing, to online distributors, such as Hulu and Netflix, which provide even more flexibility for viewers. On top of the threat these legitimate challengers pose to traditional cable companies, such as CBS, ABC and FOX, the growing reality remains that younger viewers are turning to illegal streaming sites that yield little to no revenue for providers.

            Starting on Tuesday April 22nd, the Supreme Court will hear yet another case about copyright infringement and how it pertains to accessing content that broadcasters project over public airways. The company in question is Aereo, which was launched in 2012. Interestingly, Aereo’s claim to legitimacy and its business model revolve around a technology that has seemingly become obsolete in the modern day: antennas. In the early days of television, each user would have a set of “bunny ear” antennas that they would place and top of their TV and be able to watch shows for free. Aereo takes this idea to the next level. Their headquarters in Brooklyn, New York contains an “antenna farm.” Subscribers, who pay eight dollars a month, go online and request to either watch a show live or record it for later. When they do this they temporarily gain access to one of the antennas which in turn accesses the public airwaves and streams the content using the Internet or stores the program in the cloud.

            As of now, Aereo is only able to provide this streaming service for local channels in  thirteen markets, so it may seem like an insignificant threat when matched up against the traditional giants of broadcasting, but this is not the case. A decision in favor of Aereo from the Supreme Court is being framed as a potential death blow to free local programming. Broadcasters argue that Aereo is not different from a cable company in that it retransmits their content from the public domain to the greater public. Cable providers are allowed to do this because they pay enormous fees to the major broadcasters. As advertising revenues have decreased with the rise of computer viewing, these fees have become crucial to the survival of major networks. If Aereo were allowed to provide the same content to users without paying. then why should cable companies continue to spend millions for the same privilege?  They probably shouldn't. Networks are wary of such a mentality coming to fruition. To combat these claims, Aereo states that its service is nothing more then a way to help people use legal antenna technology. If what they are doing is illegal, then every person who owns an antenna (estimated to be about 60 million) could be breaking the law every time they turn on their set.

            One of the reasons this case is so interesting is that both sides have relatively strong arguments for why the ruling should be in their favor. For the broadcasters, this could be a last stand in the fight to preserve a dying industry. What Aereo is doing is extremely similar to what cable companies do, so why shouldn't they be treated the same way? However, people have been using antennas to get free television for years, and Aereo argues it should not be punished for finding a better way to do it.

            Up until this point, lower courts have ruled against the plaintiff networks, but with the Obama administration coming out in support of their argument, there is a fair amount of momentum building for the broadcasters. The Supreme Court justices seemingly hold little to no opinion on copyright laws, so it is possible that this pro-network sentiment building up in Washington could sway their judgement. Ultimately, however, this ruling will likely not have the profound effects that some people are predicting. There is a small chance SCOTUS could choose to lump Aereo in with all companies that operate through online streaming and cloud technology, thus rendering them all as also illegal, which would be absolutely devastating for the entire Internet economy, but that does not seem like a direction the Court, President, or Congress interested in heading. If anything Obama has indicated that if it were up to him the scale of the court's decision would be very limited. Thus Aereo will most likely be declared illegal and forced to disband, but that’s about where the repercussions will end. If that is the case the ruling would be just. Aero may be using a perfectly legal technology as the basis of its company, but in reality they have simply found a loophole in the market and the courts should probably set things straight. Broadcasting networks will live to fight another day, but without major reforms in their favor it won't be long until a new technology arises that threatens their way of life.