Okay, let’s start this out right by noting that the headline is only slight hyperbole. We’ve already talked about the TV networks suing Aereo for letting people connect, via the internet, to a TV antenna that picks up over-the-air (i.e., free) TV programming in NYC. I still can’t quite figure out what the legal argument is here, other than that it upsets their business model. Watching over-the-air TV programming is, obviously, perfectly legal. We’ve yet to see a competent claim that place shifting legal TV is illegal. About the only real complaint is that this has the chance to drive more people to cut the cord, rather than pay ridiculously high cable/satellite TV prices. Of course, the networks these days thrive because of the insanely high carriage fees they get to charge the cable/satellite guys to include their network programming.
But, you know, disrupting the TV networks business model isn’t illegal.
Yet, as with the DISH Networks case, wherein the networks seem to be claiming that skipping commercials is illegal, the networks in the Aereo case don’t seem to have much of an argument other than “this disrupts our business model.”
In a hearing about whether or not the court should issue a preliminary injunction (as has happened in the similar, but different in important ways, ivi and Zediva cases) the judge didn’t just roll over for the networks, and allowed Aereo’s lawyers to grill an exec from CBS, who more or less admitted that they think (1) the DVR is a bigger threat than Aereo and (2) that their main issue is that Aereo may lead to more cord cutting.
But, again, getting more people to cut the cord isn’t illegal. This is, once again, appearing like a “felony interference with a business model” case. The network exec actually tried to make the argument on the stand that the fact that someone might cancel their cable subscription to use Aereo (cord cutting) is a form of “harm” that requires Aereo be shut down by preliminary injunction. Thankfully, the judge wasn’t buying that logic:
The judge also got into the act somewhat, addressing broadcasters’ insistence that any customer who cancels his or her cable service to sign up with Aereo is a problem. How does subtracting one subscriber impact advertising, asked the judge, which caused the CBS executive to admit that it would have to be one Nielsen household that canceled for impact, and later that it would more likely have to be a substantial number of defections.
There was some other damning info that came out in the hearing, including the fact that the TV networks refused to even talk to Aereo, never sent a cease & desist, and only decided to sue once they found out that Barry Diller was backing Aereo. Hopefully, the judge refuses the injunction. At the very least, it’s good that he’s not willing to just roll over and kill innovative startups because they mess with the entertainment industry’s business model.