What Aereo Did Wrong
Disclaimer: I am using the word wrong in the sense of detrimental to their business, not immoral or illegal.
With that said, I believe Aereo's business model was (and still is) sound, and the copyright lawyers have overstepped their reach.
Following is the text of the case ruling.
Holding: Aereo publicly performs copyrighted works, in violation of the Copyright Act's Transmit Clause, when it sells its subscribers a technologically complex service that allows them to watch television programs over the Internet at about the same time as the programs are broadcast over the air.
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Essentially, Aereo's model was this: Lease/rent an antenna to subscribers, pipe the output of that to their browser. Each customer is assigned their own antenna; they and only they are allowed to receive the stream of data from it.
If we are to believe that adding the phrase over the internet to a previously legal concept makes all existing copyright law fall over, then this is truly a sad day for technical innovation everywhere. Copyright reform needs to happen.
I believe the supreme court was confused by all of the "technologically complex" parts of it. If we strip the service down to the core, it is simply a place-shifting system analogous to slingbox et al[1]. The key here is that it is a one-to-one system. Aereo has (had?) a single antenna for each of its subscribers. This is not a public display, it is a single individual viewing a signal relayed to them in a novel fashion.
All Aereo is, is a really long antenna cable. Exactly what the cable companies did in the 60s. This was challenged, and ruled as legal by the supreme court then. Why was this precedent ignored in Aereo's case? Why does the supreme court suddenly think that an internet connection is any different than a cable connection -- especially when they are one in the same in many instances‽
Time-shifting has been challenged in the courts and upheld. Time-shifting and DVRs are arguably costing the networks orders of magnitude more in advertising commissions than place-shifting ever could. In addition, place-shifting does not create a copy of the content. It simply relays it. Time-shifting creates a copy which users may keep watching.
This begs the question: why did the networks go after such a low impact to their bottom line? If the streams are already available OTA, what is the harm in allowing MORE access to them at nearly the same time?
According to theverge, the networks are paranoid that the cable operators will use it as leverage to stop paying for each of the subscribers[2]. Aereo was shut down for rebroadcasting (whether true or not); the cable companies could simply put an Aereo-type TV antenna in each of its receivers, therefore cutting the cost of re-transmitting all OTA networks. I propose the cable/satellite companies do exactly that. This method would not be place-shifting and therefore would not be vulnerable to the court's decision. Networks still get the shaft, and cable companies can -- for once in their existence -- reduce costs to consumers[3]. Hopefully someone high up at Cox, Comcast, Dish, DirecTV, etc is considering this.
So here's what Aereo did wrong:
They attacked the revenue stream of a very large company with very powerful lawyers. They underestimated the neo-luddism of the Supreme Court justices. And they did all of this without considering -- and planning for -- what might go wrong if they did.
Here's where my opinions on the case stop, and my opinions on copyright law in general start
Copyright law aside, de-duplication of content simply makes sense. Why have two identical copies of the same data, just to satisfy some paranoid law written before the concept of data had even come into existence? The fact that Aereo has a single antenna for each user is their way of getting around that backwards law (or is it just a precedent?). If two users are tuning to the same channel, by all means should Aereo be allowed to switch the stream over to a single antenna. In fact, Aereo should be allowed to have one antenna for each channel, given that the streams are all already broadcast for free, over the terrestrial airwaves. Repeating and amplifying a public signal should be fair use, whether paid-for or not.
The most relevant copyright infringement case in recent history is UMG v. MP3.com. The crux of the case was that MP3.com was copying the media to their servers from copies held at MP3.com, rather than from consumers. This has caused cloud service providers to seek licensing agreements with record labels before it will allow users to use the service to stream their own music!
In addition, it seems that cloud service providers must store multiple copies of the same content rather than one canonical copy which all users can access (of course, after they upload their own copy to prove they have a license -- the model of mp3.com). Storing multiple copies of data is extremely wasteful. It would take a relatively simple database to keep track of which user has uploaded what songs, and there already exists spectral analysis software which can determine the fingerprint of a song. If a song is uploaded to the server and it does not find a match, it should prompt the user for metadata (or just read it from the IDv3 tags or filename). If it finds a match, it should simply seek a confirmation from the user regarding the artist and song title.
There does exist some examples of fair use and copyright law being applied correctly in the courts. One such case: Google was sued for their storage of public websites in their caches; Google prevailed.
Footnotes:
1. ^ variety.com -- the slingbox paradox
2. ^ theverge.com -- Aereo under fire
3. ^ HAHAHAHA like that will EVER happen!