Big-deal legal move for streaming TV

[Bob Of Burleson]

Aereo's Bid for Comeback Hinges on Cable License
Last-Ditch Effort Opens a New Debate About Copyright Law

By Keach Hagey
The Wall Street Journal

Aereo, the online video company that was widely expected to go out of business after losing a high-stakes Supreme Court case in June, signaled Wednesday that it sees a path to survival if it is classified in legal terms as a cable system.

Aereo Inc.'s defiant stance in the wake of an adverse ruling by the Supreme Court last month is setting off debate over a controversial area of the copyright law, with broad implications for the budding online video sector.

The Supreme Court sided with TV broadcasters, which argued that Aereo's streaming-video service infringed on their copyrighted programming. The Court said Aereo was "substantially similar" to a cable system and therefore Aereo needs broadcasters' permission to air their content.

Aereo has suspended its service since the ruling. But rather than slink away defeated, the company is hoping to turn the court's decision to its advantage. If it were classified as a cable company, Aereo argues, it should be able to qualify for a "compulsory license"—meaning it could pay limited royalties for the rights to broadcast content. Aereo made that case earlier this week to a lower court judge.

If Aereo is successful and does manage to qualify for a compulsory copyright license, it would have a profound impact on the way television is distributed online, potentially paving the way for other so-called over-the-top Internet television services from companies like Sony Corp., Dish Network Corp. and Google Inc.

To be sure, Aereo's business model would be altered by having to pay copyright royalties, however small. With that added expense, the company likely would have a difficult time keeping its service at its current cost of $8 a month.

Still, just surviving after the Supreme Court's decision would be a major coup and would give hope to Web entrepreneurs looking to get their own online video ventures off the ground.

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