Jeff Yang and Andrew Hawn of The Futures Company have been looking at the recent US Supreme Court decision which ruled that the Aereo “cloud DVR” service was illegal. The decision will probably kill off the high-profile startup, and potentially, throws a large shadow over the future of cloud TV in particular, and advanced cloud services in general.
“Although Aereo’s business model was literally designed to conform to the prevailing legal precedent, the 2008 Second Circuit Appeals Court decision that allowed Cablevision to introduce a product it called the “remote storage DVR” (e.g. a DVR that was physically located in Cablevision’s data centers, but which could be controlled by users in their homes), the Supreme Court did not believe Aereo’s version of the system properly conformed to the Cablevision ruling, in large part because Aereo was offering its end users new, unlicensed content, while Cablevision, like other cable companies, pays over-the-air broadcasters a negotiated retransmission license for the right to deliver their content through their pipes.
But the content providers now celebrating this short-term victory should consider whether they’ll ultimately find themselves on the wrong side of history. The now seven-decade-old media structures and business models that define television as we know it are becoming increasingly antiquated in a digital world of near-effortless piracy. While Aereo refused to license content for its streaming play, the fact is that the content providers and cable operators who control TV do not currently have the ability to offer a low-cost, single-source “cloud television” system of their own — in the face of obvious demand for the same.”