Aereo ruling could impact Pandora

If the courts keep ruling that Aereo doesn’t violate copyright laws, it could affect other services that stream content, and might prompt Congress to step in

The recent court rulings in favor of Aereo, the company that captures and streams free over-the-air TV broadcasts to paying customers, is already poised to have a potentially big effect on television broadcasters. Fox, for example, has threatened to pull their broadcast content from the airways and move it to cable or satellite TV if Aereo ultimately wins the battle and is allowed to continue. However, it’s not just broadcast TV that could be affected should Aereo-type services be deemed to be in compliance with copyright laws after all the legal wrangling is said and done.

aereo_antenna_array1-150x113_2.jpgImage credit: Aereo
Aereo antennas

As a quick recap, current copyright laws give copyright owners the rights to “public performances” of their content, that is the transmission of the performance to multiple people. In the Aereo case, the United States Court of Appeals for the Second Circuit ruled that, since Aereo creates separate copies of content for each viewer to be streamed to them at their discretion, there is no public performance. Hence, Aereo is not violating copyright laws even though it does not pay any royalties or licensing fees to the copyright holders of the content.

However, broadcast and copyright law expert David Oxenford wrote recently that Aereo is still, essentially, retransmitting content to multiple people. The key is that Aereo was able to convince the Second Circuit court that it is not a public performance because each consumer receives a distinct copy of the content and it is the viewer who ultimately controls what content is transmitted, not Aereo. Thus, Oxenford wrote, the court has, in effect, redefined the definition of a public performance and that could have wide-ranging impact, and not just on broadcasters.

“ can imagine many other systems, not involving broadcast signals, where the transmission of content on demand to individual users is not seen as a public performance but instead as a private one – in attempts to avoid paying public performance royalties or licensing obligations.”

For example, what’s to stop cable TV companies from setting up a similar technical infrastructure to Aereo to create individual content streams for each customer? Could they then stop paying licensing fees for content? If they could and did, that might, one would imagine, have an effect on content producers (e.g., they may no longer find it worthwhile to produce content).

The folks at RAIN have taken this argument a step further and applied it to audio streaming. Pandora, for example, currently creates unique streams for each listener, so they can support limited customization such as song skipping. Does that mean they can stop paying royalties that currently consume more than half their revenues

As I wrote recently, this whole thing just highlights how our copyright laws need to be updated to reflect changes in technology and content distribution. Even though the Second Circuit court’s ruling was a big win for Aereo, the lawsuits brought against them by broadcasters are not dead yet and similar services have lost in other courts, so there’s still a ways to go before we’ll know if their business model will ultimately survive. But, if it does, Congress, as Oxenford writes, may need to step in “just as it did when cable first came on the scene, by passing legislation to redefine a public performance.“

What could go wrong with that?

Read more of Phil Johnson's #Tech blog and follow the latest IT news at ITworld. Follow Phil on Twitter at @itwphiljohnson. For the latest IT news, analysis and how-tos, follow ITworld on Twitter and Facebook.

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