By the Blouin News Technology staff

The fall of Aereo

by in Enterprise Tech.

Aereo CEO Chet Kanojia holds one of the company's small antenna. Lane Turner/The Boston Globe via Getty Images

Aereo CEO Chet Kanojia holds one of the company’s small antenna. Lane Turner/The Boston Globe via Getty Images

It has been one nail after another into the coffin for Aereo, the New York-based startup that took streaming TV by storm last year. The company is now defunct, and has just been allowed to sell its web TV technology to the highest bidder at a forthcoming auction.

Aereo’s business model angered broadcasters enough to take it to the Supreme Court. The company took over-the-air TV programming and streamed it to customers over the internet using individual antennae that customers purchased for $8 a month. Broadcasters claimed that Aereo violated copyright laws, stole their programming, and provided it to customers without paying retransmission fees. Aereo claimed that it was within its rights according to regulations that allow broadcasts to be recorded and reused for personal purposes. The Supreme Court sided with broadcasters in June, and in November Aereo filed for bankruptcy. Reports note that a bankruptcy judge in New York ruled last week that Aereo will be allowed to sell its assets — the technology it developed to stream TV over the internet — and all sales may be approved by the broadcasters that initially took Aereo to court.

The fall of Aereo has been viewed as a big loss for consumers by those in the technology industry (naturally prone to favoring disruptive technologies coming from smaller companies). Aereo’s case resonates not only with proponents of small businesses, but is also at the core of tech startups’ ongoing fight with bigger cable companies, broadcasters, and internet service providers (ISPs). It echoes the grievances voiced by Netflix, which has bashed heads with ISPs like Comcast over the last year. Consumer advocates say the case bodes ill for the development of startup-based technology in the cloud computing and/or streaming TV sectors. Indeed, Aereo’s own CEO Chet Kanojia issued a brief in March stating that — should the Supreme Court side with broadcasters — the decision would negatively impact the cloud computing and cloud storage industry:

Moreover, petitioners’ construction of the statute imperils the cloud computing industry. Their position depends on aggregation of all the individual transmissions and individual performances of a program by consumers using Aereo’s system. That “aggregation” would turn all cloud storage providers into infringers. The government acknowledges the very real threat posed by petitioners’ arguments, but its proffered solution – to examine the lawfulness of the copy from which the performance is made – is highly problematic: it ignores consumers’ long-established right to make personal copies of free, over-the-air broadcast programming and consigns cloud computing companies to the impossible task of discerning which specific content among millions of terabytes of user data was lawfully acquired.

As Aereo dissolves, it remains to be seen who will bid for its technology and how broadcasters will rule over those sales. But its case has certainly been one of the most controversial and disruptive ones in technology in the last several years.