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Aereo likely to go belly up if it loses court battle

Published April 2, 2014 3:50 pm

Tech • Television service will go before the U.S. Supreme Court later this month.
This is an archived article that was published on sltrib.com in 2014, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

If Aereo, the Internet-based television streaming service that was temporarily shut down in Utah last month, loses its battle in the U.S. Supreme Court, the company will be "finished," said its lead investor, Barry Diller.

Diller, a media executive and former head of Paramount and Fox, told Bloomberg Television that the upcoming Supreme Court battle will likely determine the fate of the company.

"I believe so. If we lose, we're finished … it's very possible that there's some salvage," he said. "It probably would not be able to continue in business."

Aereo is the controversial service that broadcasts local television feeds to viewers by taking the digital over-the-air feeds and delivering them over the Internet. Users can watch the stations on their computers and mobile devices with a monthly subscription, completely bypassing cable and satellite providers.

The service, which costs $8 or $12 per month, was launched last year in Utah but immediately was the subject of a lawsuit filed by local television stations KTVX Channel 4, KUTV Channel 2, KUCW Channel 30 and KSTU Channel 13, claiming Aereo violates copyright law.

Aereo, however, believes it has found a loophole with its technology, which assigns one small dime-sized antenna to each customer.

Last month, a U.S. District Court Judge in Salt Lake City ruled that the company does in fact violate copyright law and ordered that the service be shut down temporarily in Utah and Denver while the U.S. Supreme Court deliberates on its case. The Supreme Court case involves a lawsuit filed by all the major television networks, including CBS, NBC, ABC and Fox.

If the court rules in favor of the networks, then Aereo would be required to pay them retransmission fees in order to carry their video signals.

"We could probably pay retransmission consent dollars if we could make a deal with broadcasters. We probably could," Diller said. "But the value proposition would go out of the game because Aereo is a low-cost method of receiving over-the-air broadcasting. That's the platform."

vince@sltrib.com

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