As the Supreme Court hears oral arguments in the case that will determine the fate of his streaming video service, Aereo founder and CEO Chet Kanojia sat down for a wide-ranging interview with Yahoo Global News Anchor Katie Couric.
The New York-based startup — backed by billionaire investor Barry Diller, among others — is at the center of a legal battle that has been raging since the company's inception in 2012. Aereo currently operates in 13 cities.
The heart of the case involves Aereo's practice of assigning subscribers mini remote antennas so that they can stream over-the-air broadcast signals directly to their tablets and other mobile devices. The antennas function in the same manner as old-fashioned "bunny ears." Aereo also uses cloud technology, which lets subscribers watch the programming live or store it for a later time.
WHAT IS AEREO?
Broadcasters say Aereo’s service amounts to theft.
"They don't talk to me. They only talk through lawyers," Kanojia told Couric, when asked how the network honchos who are suing him feel about the whole idea.
News Corp. COO Chase Carey has said, "We need to be able to be fairly compensated for our content. We can't sit idly by and let an entity steal our signal."
Kanojia maintains that media companies are fairly compensated through advertising, and scoffs at the notion that using an antenna to access over-the-air TV is in any way illegal.
"Many federal courts have found that Aereo is, in fact, not infringing on their copyrights or anything along those lines. I just don't find that rhetoric has any credibility," asserts Kanojia.
The Justice Department disagrees and has thrown its support behind the broadcasters, claiming that Aereo is "clearly infringing" on the copyrights of broadcasters.
Kanojia vehemently disagrees, calling the Justice Department's position "incorrect and misguided." He maintains that Aereo is selling technology, not content. A key distinction for the company's case.
Aereo bills its $8-a-month subscription service as a great alternative to more expensive cable bundles, despite the fact that it only provides broadcast channels such as PBS, NBC, CBS and Fox.
Kanojia claims his customers can easily watch additional programming with digital companion services that cost considerably less than cable.
"It's all becoming available online," Kanojia says. "If you go to Netflix, they have great shows, 'Breaking Bad,' and, you know, obviously 'House of Cards.' You can rent movies from iTunes."
Some customers have also raised questions about how well Aereo works. A subscriber in Atlanta complained on pcmag.com about streaming video during prime-time hours, while another customer in New York wrote on the-gadgeteer.com that they couldn't watch the Academy Awards due to picture quality, and fears Aereo will struggle to showcase big events.
Kanojia readily admits the company has had its share of struggles.
"We've run out of capacity, we've had a couple of outages, so yes, there are issues." Many of those issues have been caused by the Internet, according to Kanojia. "If you have a very poor Internet provider, it's congested."
The case against Aereo is about far more than the future of just one company with about 100 employees. The Supreme Court's decision will have lasting implications for the broadcast and cloud storing industries.
WHAT IF YOU LOSE?
Kanojia is prepared for the outcome of the court's decision to go either way, but is confident in his case. "I don't know what's going to happen or won't happen. This is the Supreme Court, but I do like my facts."
Kanojia and his backers have invested around $100 million in Aereo. Losing the Supreme Court case could cripple the company, according to the Kanojia.
"If there's no viable business, then we'll probably go out of business. I do know the technology we've built is tremendously valuable to a lot of people."
And while he hasn't ruled out an acquisition of the company, he says it's not something he's rooting for.
"It's a very depressing thing when you're acquired. The moment you realize you are no longer doing what you really love to do and you have to go sit in a meeting with some suit or who's going to tell you how it's going to be and make your life miserable, it's just depressing, so I hope not."
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