ABC v. Aereo—Implications for the Future

The writing is on the wall.  The future of television and media consumption is moving away from network channels and physical sales to an “On-Demand Internet” streaming model.  This trend has already begun with millennials.  Millennials, as a group, do not subscribe to cable television or purchase music. Instead, services like Netflix, Hulu, and SoundCloud provide Millennials with On-Demand access to television shows, movies, and music. Television networks and traditional media companies must adjust to this new trend. This issue recently came to a head in the Supreme Court’s decision in ABC v. Aereo. The Court’s decision, while resolving the immediate issue in the case, has caused a problem in the larger scheme of things. The decision has put a new spin on how the Court applies the Transmit Clause of the Copyright Act of 1976. If you provide digital media content through Internet streaming or access content through the cloud, then the Aereo decision could affect you.

What Was the Issue In ABC v. Aereo?

Aereo is a company that provides a small device that a user can connect to a computer for a monthly fee. The device allows the user to pick up network television broadcast signals and stream them directly to the user’s computer.  ABC and other network broadcasters sued Aereo for copyright infringement. The issue in the case was whether Aereo’s device fits under the definitions of performance and public transmission within the Transmit Clause of the Copyright Act of 1976.  The Transmit Clause describes the exclusive right to “transmit or otherwise communicate a performance . . . of the [copyrighted] work . . . to the public by means of a device or process . . .”  The Court held that Aereo did transmit ABC’s performance and that the transmission was to the public.  Therefore, Aereo infringed upon ABC’s copyrights.

How Did the Supreme Court’s Decision Affect the Transmit Clause?

The problem that has arisen out of the case is not the ultimate decision, but instead, the rationale the Court utilized to get to that decision. The Court looked at the issue in an antiquated perspective. The Court asked whether the Aereo device is an antenna or a cable system.  The Court decided that Aereo was not a cable system, but that it was like a cable system. The problem is that Aereo does not act like a cable system.  A cable system grabs a channel’s feed and then transmits that feed to its customers simultaneously. Aereo, on the other hand, utilizes a system in which each subscriber decides to what feed the Aereo device will tune. Each user tunes the Aereo device to the desired channel instead of Aereo broadcasting constantly to all of its subscribers. This model is inherently unlike a cable system. In fact, the Aereo device represents the new kinds of media consumption that do not fit neatly into current copyright laws. If Aereo’s device is transmitting a performance to the public, then is the average user doing the same when streaming media from the Internet or accessing media from the cloud? The Aereo decision has changed the way companies and average users must understand the Transmit Clause. What we once considered private transmissions could now be considered public and an infringement of copyright law.

You may contact us to speak to an attorney about how your streaming practices and/or media consumption are affected by this decision.