Aereo vs. broadcasters SCOTUS fight set for April 22


Broadcasters (CBS, DIS, CMCSA, FOXA) will get to pitch their case on why they think Aereo is illegal in front of the Supreme Court on April 22.

Media analysts think a SCOTUS ruling could encompass other issues such as DirecTV's (DTV +0.7%) Hopper service and streaming rights in a broad ruling on the new age of the TV industry.

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Comments (29)
  • Non-Plused
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    In writing their opinions the Justices have historically narrowed the focus as much as possible. An expansion of the decision to encompass other issues which is lastly proposed here is both unlikely and improbable.
    11 Feb 2014, 03:17 PM Reply Like
  • Jbgoose
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    From a telecom (B&C w business, PSU) degreed and twenty plus years real world experienced viewpoint; you are right on the money. Anybody who thinks the Supreme Court will 'widen' a judgement based on the series of laws and acts, addendum initiatives over time is very wrong historically. In fact, the court rarely widens much of anything and generally targets very specific topics to expand upon- keeping all comments in an extreme narrow range.
    The best question is: Who will benefit no matter the ruling?
    The best answer is: (IMO) not the cable companies - Areo is simply another way to re-transmit public air. The vast majority of the USA already pays for this, even with the most basic free to 10 buck service one CAN negotiate for the otherwise free digital stations.
    The cable co's will not gain nor lose here- but I am happy to trade others ignorance if they don't study up...
    Innovation wins- social media wins - and I'm not talking twitter, I'm talking social media in the collegiate definition of the genre, think innovations such as the smart home, TV, office inter connectivity. What firms are most impacted from micro cap SVOD start ups to old school MSFT (gaming consoles) win in any decision. My opinion... Very curious as to others views who are educated in these matters as to why one agrees or disagrees?
    12 Feb 2014, 09:52 AM Reply Like
  • frankhkii
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    DirecTV doesn't have the Hopper service, that's Dish...
    11 Feb 2014, 03:20 PM Reply Like
  • 19225541
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    That would be Dish's Hopper, not Directv's.
    11 Feb 2014, 03:40 PM Reply Like
  • willclark
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    hopper is for dish
    11 Feb 2014, 03:40 PM Reply Like
  • JillKennedy
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    It's very simple - Aereo will lose:
    11 Feb 2014, 03:45 PM Reply Like
  • redarrow5150
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    Although I agree that Aereo should lose that's not a forgone conclusion. Also disagree with some of the items the article mentions about just going to cable. You think the networks want to have constant battles with cable providers about carriage? No. The movement for a lot of these networks coverage will be the internet and paying directly to FOX, CBS or Disney. What's going to be interesting is bandwith issues in carrying out these programs via the internet.
    11 Feb 2014, 06:48 PM Reply Like
  • Jbgoose
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    Good call. Broadband is one area that wins, no matter the decision. Bandwidth issues are a problem the industry must agree upon - behind the scenes technical standards must happen so all can make devices communicate seamless. This is very crucial and would need to be worked out regardless of this case. But great call, 4kHD is laughable considering most content bought on modern devices are up converted well enough for most, from SD. Such as a movie may take up 2 mb of a plan in SD, but that 2 turns into 5 if it's HD, at 4k I've seen numbers where one full movie can take about 2 Gigs!! In this example ( I used 2 for simplicity, the math is HD is about 250% more pipe than SD ) All my content bought -from Verizon (VZ) FiOS by the way, who has this technology nailed down and a great sales strategy shaping up from the set top box to online anywhere with recent acquisitions to make it more user friendly and sticky accounts ecosystem that plays nice with Apple and Droid. And your house (they offer smart home everything, far ahead of the pack). Comcast also is starting to ramp it up. The exec in charge was in the local paper talking about it, lives up the street, they rolled out Internet TV in the 1990's here as a test. What is in store for the average consumer is about to reinvent the way consumers think of these firms.... Areo is just a ruling these guys will deal with and we'll see how it is written. Stay focused on the actual business as investors and be rewarded ..
    12 Feb 2014, 10:08 AM Reply Like
  • redarrow5150
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    I actually agree with the Broadcasters in regards to content issues. I mean AEREO is using the argument of government airwaves (which is true) but the content of what is being aired is the primary issue which then becomes copyright infringement. I believe when it's all said and done for AEREO to survive they must negotiate (much like cable companies) rights fees or stations/networks will provide this service on their own.

     

    If the broadcasters win on all issues this could add revenue to their bottom line. If AEREO wins then it's a MAJOR loss for the local broadcast owners who will find money possibly being dribbled away from cable companies and parent company thinking alternative means of distribution. This is going to be hardest for the networks because they get revenue from the local broadcasters and if they decide to go internet they are cutting off not only money for themselves but distribution of the product.

     

    Take the worse case example of networks moving to internet this would kill local television as they do not have the resources to fill in programming. It's difficult enough to fill redundant local news but content loss from the network would just devastate revenue. I don't think the networks if they would lose would do this but they very may well do a slow bleeding of cutting off the cord of content. I think when it's all said and done AEREO will be treated much like cable companies when it comes to must carry. If not total chaos could very well happen if the courts rule for AEREO and there's no way anyone should be holding these smaller broadcast companies while they decide.
    12 Feb 2014, 12:12 PM Reply Like
  • Jbgoose
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    I respect your well stated thoughts. The key in your argument is the content definitions, I think all agree on must carry and that technology has leapfrogged this concept yet not the spirit. The spirit of must carry - I don't see how AREO must be treated as a cable company - but that's the big ? of the case. The nuclear option already is here, to me, just look at the NFL. Slowly adding technologies to enhance viewing via web or app and then come next round of negotiating they have even more to either monetize themselves or add to the cost which is already getting close to a loss leader of sorts, if I'm correct?

     

    The smaller broadcast co's have been pinched forever from all sides. They too can broadcast from the web, apps; even PBS is squeezing them these days. PBS is great family SVOD for my family I know, and top notch. Of course publicly funded... Which brings me to one final comment, about why the Court will not expand upon anything in this case- would anyone foresee public broadcasting being brought up by either side? I would think no way... But others might have a view?
    14 Feb 2014, 11:04 AM Reply Like
  • redarrow5150
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    The reason AEREO should is they are rebroadcasting government signals. They themselves are making that argument so if the FCC requires cable to carry local stations why should AEREO be treated any different or have that huge advantage over the others? I liken the situation like a McDonalds franchise. What if you owned a McDonalds and had the rights in the area and all of sudden Corporate McDonald's starts selling franchise rights without providing you the opportunity to build more and just decide to give to someone else? The Courts and the FCC cannot just allow AEREO to come into markets and sell a product to consumers in this way.
    15 Feb 2014, 09:20 AM Reply Like
  • Jbgoose
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    Red, But first you said it was content at heart... So I agree with fifty percent of the argument it seems. But we both agree the court wouldn't expand what's at heart so an update to legislation might be the final answer. Good luck with that happening soon, though DC does move quicker on such big business issues with deeper social implications. And elections. So this case seems to be the trigger decision for long enough to allow an industry to compete a few technological steps ahead of the rules. Could bring innovation. Facebook already has people placing bets on when it goes out of style, Yahoo is the best money machine for white collar industries and content has re monetized many others. The industry is looking stronger the tighter it get in line and rolling ahead. Music should take note. They kept it in reverb too long and seem to have changed. It's a great field...
    15 Feb 2014, 09:47 AM Reply Like
  • redarrow5150
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    Yes but it's what the Broadcasters position is...content. They are argue no would be buying AEREO service because it's the content of why they have people signing up and not to receive the internet signals. Basically the court is going to rule for the FCC who then will expand or set regulation on internet broadcasting. Quite honestly it really doesn't have much do with technology because I'm pretty sure the broadcasters can do this or maybe join together like they did with HULU.
    15 Feb 2014, 02:12 PM Reply Like
  • Jbgoose
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    I agree re work a rounds- and I would think you agree that the nuclear option is rubbish? The problem with content as the issue is content can and is already consumed the way AREO is putting it out there, just not on a massive scale. Are they massive enough? That may be one point they expand upon. Threshold. Like a consumer copying a CD they bought for use in a car vs a bar they own. We'll see. To me AREO is no different than an easier HD antennae for consumers. And all broadcasters generate content signals as is. They have no case. Technology wins. Innovation wins. And we both know numerous ways the content can be monetized and protected- now, as to the big cable companies- can they be protected? That's not for the courts to decide over the AREO case, my opinion.
    16 Feb 2014, 10:17 AM Reply Like
  • redarrow5150
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    That's a very interesting analogy about TV attennas on the houses and not getting paid...hadn't thought of that. The problem though is the broadcasters needed a partner in distributing the signal and they don't with AEREO. Taking it a step further what's to stop AEREO from providing CBC from Canada or any other country. You see that's the slippery slope with AEREO. If Technology wins then why does MSFT have a stranglehold on windows and no company can just go in and make it a similar or better product. If AEREO wins this case it will be a disaster for consumers as broadcasters are basically going to be very difficult and will build up walls with their content.
    16 Feb 2014, 11:17 AM Reply Like
  • Jbgoose
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    Thanks, my degree must have paid off in theory. Technology has already leapfrogged even AREO. The case is rubbish from the start IMO other than new language it will provide academia. Its only being heard because of the big names behind it, really. Broadcasters have a partner, and regulator; and it is the gov't. The gov't is the entity that digitized TV broadcasting OTA and also is who would mandate OTA 4k HD (They will not b/c of bandwidth issues and such. And no content, plus they just rolled out the digital, HD over the air). Re MSFT, well, ask the shareholders who have hung in over the years. But honestly, Windows is so very tied into the infrastructure of global business who have invested billions, maybe trillions, is my serious answer; so it would take a leapfrog and massive technological standardized (accepted) change at all companies, all at once, to dent the well adopted and global agreed upon standards long set. I don't see that happening soon at all. The consumer is already in a 'disaster' of sorts. To watch content on Amazon Prime I must use 4 remotes... whomever makes it one button, one box, one screen .... well, that's a company I would invest in. As the leading edge boomers become more ancy and impatient with age, snippy as I call it, this will be demanded as a standard for content consumption. Kids laugh at the thought of paying 5 parties for scattered rotating content. One week FiOS has my Disney shows, the next month I have to go to Apple TV, then HULU, then.. you get the picture. One never knows what is where and when. And no matter, the same big 4 get the broadband monthly money. Thus the market will work itself out. Which goes back to where we are now, AREO or not. If they can do it, anyone can. They are not breaking the law. Telecom is a great field, too bad not one telecom company looked at my resume post college, other than for answering a phone, but it all works out. Now we are in a new age, the one studied in the 1990's is finally here....
    16 Feb 2014, 02:34 PM Reply Like
  • redarrow5150
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    Well that's where we differ...IMO they are breaking the law by selling content for $9.99 a month. Nobody buys the product without the content so I don't buy (no pun) the argument of just distributing the signal because without the content you won't have a customer. I really don't know if AEREO has any patent rights with internet broadcast so perhaps that's the business to business they need to be in versus the viewers.
    16 Feb 2014, 02:50 PM Reply Like
  • Jbgoose
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    I think you are right about the narrowed focus- selling the content. But if they offer a value prop of making it easier to watch free TV, can't they charge for making it easier and not the content? Not my best argument at the moment, but one response. So back to the music analogy- artists get no royalty from you tube yet they allow full rebroadcasts of concerts, songs and events. Should You Tube pay?
    17 Feb 2014, 10:01 AM Reply Like
  • redarrow5150
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    Napster.
    17 Feb 2014, 11:05 AM Reply Like
  • Beckstle
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    Aereo and Dish's Hopper are not the same for the simple fact that Aereo only records broadcast stations and does not require a person to have cable. Cable blocks a person from receiving a normal TV signal via antenna, so it's fair that cable has to pay to rebroadcast fees. Aereo is a DVR service recording what comes in as a free signal to a person's home so they can watch it when they want. To kick it old school, Aereo is the equivalent of paying your neighbor to record a show for you on their VCR because you forget to set yours up, then picking up the tape to watch whenever you want.
    The networks are being stupid here, because they should be thinking about ways to make it easier to watch their shows, not harder - especially with the cord-cutting trend rising. Tying accessing their shows to having cable and making it difficult to record their shows without it is going to make them even less relevant than they are now.
    11 Feb 2014, 07:51 PM Reply Like
  • Jbgoose
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    Right- so focus on the firms that accomplish what you say and realize the Areo ruling is simply a trade one can make with so much foolish money taking position from people who don't understand this industry nor it's history.

     

    My main thesis for investing is following legislation and regulation where one can identify the basket of stocks most impacted by proposed regs or court cases. This way, one can cherry pick from the best cherries as the trade has been narrowed down to a small basket of thousands of stocks. Examples would be niche issues within FDA (pain management) DOL and IRS (401k laws), banking, agribusiness, water and environmental. Now add telecom.
    12 Feb 2014, 10:18 AM Reply Like
  • Squabkiller
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    The key to winning will be controling the patents for the transmission of the programming, broadcasters will lose and in SCOTUS and then have to control the patents for the method of transmission of the programing with advertising. JMHO.
    11 Feb 2014, 08:18 PM Reply Like
  • Jbgoose
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    Take it a step further- the big broadband providers allow You Tube to broadcast live and recorded music - no royalty - should the big four pay?
    17 Feb 2014, 10:04 AM Reply Like
  • redarrow5150
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    You Tube doesn't charge.
    17 Feb 2014, 11:08 AM Reply Like
  • Jbgoose
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    That's right. And they should.... In my opinion and interpretation of copyright as advised to me by most attorneys ( I am no legal expert to that extent ). Artists do get publicity, but have lost livelihood. That's actionable. So I'm told. That's a case we need to get a decision on that could change it all. It clearly states on most tickets about recording and pictures and copy law. You Tube knowingly allows this and some artists as well... But this is technology being many steps ahead, and years ahead of ... All rulings. So it goes on, and the industry now has found ways to reinvent and is in the midst of a massive comeback- all with no congressional intervention and the creators of Napster got their dough as well. It was industry who foolishly cracked down vs worked with them in my opinion. For years, suing college kids and all of that older news. Now, with production bursting and artists perpetually on the road to make a living, a new form of social media and related firms have innovated, hired thousands, and is blossoming. The technology is also being spread to the medical field and retail. Amazing what happens when innovation is allowed?
    17 Feb 2014, 11:26 AM Reply Like
  • redarrow5150
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    Yes but Napster had to pay royalties to the artists. Don't hold me to this but courts have ruled in favor of You Tube because it's the consumers who are posting and are not getting paid. I believed they ruled in way that artists could not prove airing content on You Tube was impacting income...don't really recall that well about what was decided. Even consumers who post concerts on You Tube are not getting paid for doing so.
    17 Feb 2014, 11:59 AM Reply Like
  • Jbgoose
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    I was talking to a successful touring artist, and in reality the people who post the most clicked on videos and such make a lot of money via advertising revenues regardless of any rules. In fact, if the poster doesn't get paid then You Tube collects. Why or how? Sample would be look up Rolling Stone's take on Neil Youngs amazing performance at Carnegie Hall (it was widely believed to be one of his best in many years). Rumors flew, why people asked? He is showing passion and sure is rocking like a twenty something for some reason... Why all the emotion was the buzz. Rolling Stone sent out the daily email with links to the posters, who despite the rules against it, taped various qualities (some rather pro) of the performance and Rolling Stone posted the links to all. Who got paid?
    It is use of social media like this Neil Young himself is about to innovate upon- for all of the up and coming artists, to help music survive, musicians fed, and royalties to be fairly paid. I am very much awaiting the launch of his new endeavor.... So people DO make money for their YT posts. Nobody is attempting to stop this trend but the community is innovations around it. This is one reason I would never dabble in (P) stock Pandora. Sirius makes you pay the royalty fee upfront, if you have sat radio which I do (it was my thesis for graduation, before the Gemeni Project). How does this relate to AREO? It's an example of technological and business innovation the courts can never keep up with. Now, Sirius can offer DVR services, increase programming styles, penetrate the house and office. They are now innovating with internet services and TV. This post is somewhat scattered so please excuse that, I think you follow. It's enjoyable to debate these issues with educated people, I don't know it all, nor does anyone. So I agree with much of your thoughts but am definitely on the pro business anti regulation side as the squeeze forced an industry to reinvent itself, and now, re monetize the entire library of existing content, providing a whirlwind of money and start ups. I like what one person said about the old school calling your neighbor to VCR a show.... That's back when all one needed for cable was to climb in the pole and unplug the cheap filter from the wires- oh how times have changed!
    18 Feb 2014, 09:59 AM Reply Like
  • redarrow5150
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    Sorry but the Supreme Court isn't looking or going to rule on technology but patented content rights.
    18 Feb 2014, 10:11 AM Reply Like
  • Jbgoose
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    Right. Thus No real changes outside those involved at AREO, overall, considering they (court, FCC) have yet to even address broadband issues in concrete yet- the most important rules that exist were written pre broadband let alone broadband is dominant changes.

     

    From an investing view, good for all here I think, it provides traders plenty of triggers in a basket of stocks not too large, and could provide nice opportunity. But clarity is always best. That's my investing strategy, so this all fits well for my overall take. The comcast warner spin offs and such will also provide for some surprise action. At some point the consumer can or will only pay so much for all of the splintered services and VOD streams, passwords and remotes. The industry is sure to test that threshold well before the rules catch up and technology will leapfrog even those rules. There is a new wave coming to connect the dots, all via wifi at home then NFC and Blutooth. RFID. That's a lot of dough in the bank and growth.
    18 Feb 2014, 12:07 PM Reply Like
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