What Was The Aereo TV Viewing Service?

Watching Over-the-Air TV Online - The Aereo Controversy

Official Aereo Logo and Antenna Array
Official Aereo Logo and Antenna Array. Images provided by Aereo  

NOTE: Aereo suspended operations on 06/28/14, in the aftermath of a U.S. Supreme Court Ruling declaring Aereo as being in violation of U.S. Copyright Laws. In addition, on 11/22/14, Aereo filed for Chapter 11 bankruptcy protection. The following overview of the Aereo TV Streaming Service is being preserved for historical reference.

TV Viewing Options

There are a lot of options available for accessing TV programs. Cable and satellite are the most common ways, followed by using an indoor or outdoor antenna (referred to as OTA or Over-the-Air). However, the method that is growing by leaps and bounds is watching TV programs by streaming them from the internet, either on a PC, phone, tablet, Smart TV or Blu-ray Disc player. However, the downside of watching TV over the internet is that, except for rare instances, you may have to wait anywhere from a day to two, to weeks, or months before your favorite program is available through your favorite internet streaming service.

Enter Aereo

In an effort to provide consumers with the convenience of watching OTA broadcast TV online, a new service, Aereo, appeared on the scene in 2013 and got off to a fast start, with service available in the New York City Metropolitan Area beginning in Aril of that year and rapidly expanding into Boston and Atlanta by that Summer. Plans were to expand to 20 metropolitan areas as quickly as possible.

How Aereo Worked

What made Aereo unique is that it employed technology that enabled the manufacturing of incredibly small antennas (we are talking not much larger than a fingertip) that were very sensitive. Hundreds of thousands of the small antennas would then be combined into an array and placed inside of central data center, along with supporting internet connectivity and DVR storage.

Aereo could then stream any local TV signals it received via its antenna array(s), over the internet, to any number of subscribers that have the Aereo software installed on compatible PCs, portable devices, and media streamers.

As an added bonus, all the signals were recorded, which enabled subscribers to also view any program at a later, more convenient time of their choosing, without having to own their own DVR.

Also, depending on the wired (Ethernet, MHL) and wireless (WiFi, Bluetooth, Miracast) connectivity options available between your internet devices and your TV and home theater system, your programming could be viewed on many TVs or other compatible video display device.

It is important to point out that Aereo only provided access to OTA broadcast TV channels and Bloomberg Television. It did not provide access to cable-only channels, or additional internet streaming services that provided archives of some past and recent broadcasts or cable shows, such as Netflix and Hulu.

Aereo Controversy

On the surface, Aereo sounds like one of those "why didn't I think of that" practical ideas that provided an convenient way to bring over-the-air local TV (including network affiliated programming), in high definition, to consumers on platforms not usually accessible for live TV reception.

However, this new service generated heated objections from several TV broadcast networks, most notably FOX and CBS. In fact, CBS did not allow its tech news arm, CNET, to review Aereo.

At the crux of their objections was that unlike cable and satellite services, Aereo does not pay any re-transmission fees to broadcasters, even though it charged a subscription fee to its users, similar to a cable, satellite, or streaming service, and also provided additional DVR-type services, which added further value to the service that the broadcasters are not getting a share of.

To counter the broadcasters, Aereo claimed that its subscribers were receiving unscrambled network programming over-the-air via an antenna, just like any consumer does when they have an antenna connected directly to a TV, but in this case, Aereo has centralized the antenna reception locations and merely supplies the received signal to their subscribers.

According to Aereo, the number of antennas equaled the number of subscribers, which means that "technically", each subscriber had their own antenna. In other words: What was the difference if the TV viewer has his/her TV antenna in the house or located in a more advantageous location?

As a result of Aereo's new expansion of the definition of OTA TV reception, as more subscribers chose to receive and watch TV programming using the Aereo system (either live or via the DVR options), TV stations (both network and independents) claimed that they would lose retransmission fee bargaining power with cable and satellite providers, thus decreasing one their legally-entitled revenue sources.

TV Broadcasters argued that Aereo was in violation of U.S. Copyright Law with regards to public performance and re-transmission agreements, and should be treated no differently than a satellite or cable TV provider that receives network and local TV broadcast content and is required to pay (at the discretion of the aforementioned TV broadcasters) a retransmission fee for the privilege, as the way cable and satellite services re-distribute content is considered a public performance.

Aereo vs The U.S. Supreme Court

After months of legal maneuvering, where both Aereo and the Broadcasters saw victories and defeat, everything came to a head in June of 2014 when the U.S. Supreme Court issued a ruling against Aereo. Here is the summary:

In sum, having considered the details of Aereo’s practices, we find them highly similar to those of the CATV systems in Fortnightly and Teleprompter. And those are activities that the 1976 amendments sought to bring within the scope of the Copyright Act. Insofar as there are differ­ences, those differences concern not the nature of the service that Aereo provides so much as the technological manner in which it provides the service. We conclude that those differences are not adequate to place Aereo’s activi­ties outside the scope of the Act. For these reasons, we conclude that Aereo “perform[s]” petitioners’ copyrighted works “publicly,” as those terms are defined by the Transmit Clause. We, therefore, reverse the contrary judgment of the Court of Appeals, and we remand the case for further proceedings consistent with this opinion. It is so ordered.

Justices in the majority: Breyer, Ginsburg, Kagan, Kennedy, Roberts, and Sotomayor.

Justices in the minority: Scalia, Thomas, and Alito

For more details, including the dissenting opinion written by Justice Scalia on behalf of the minority,  read full text of U.S. Supreme Court Opinion

Here are some of the reactions of the key players involved in the Aereo Controversy:

Disclaimer: Aereo was backed, in part, by IAC, which is the Parent Company of DotDash.com and Lifewire. However, IAC had no editorial input into the content contained in this article.