In the late 1970s, Sony had brought to the US market the Betamax video-cassette recorder which was the first device that could, for an affordable price, record TV shows. But Walt Disney and Universal City Studios filed suit against Sony citing copyright violation because they feared that consumers would create their own TV content libraries from shows recorded off-air rather than going to the movies.
This case was taken all the way to the Supreme Court who litigated that a technology company wasn’t liable for creating a technology that infringed on copyrights. It underscored the domestic video recorder not just a device for recording TV shows but a tool to “take the content further” such as hiring out videocassettes of the latest movies through the video stores which ended up as the device’s killer application.
Aereo is a cloud-driven TV-streaming / “network DVR” service which has been disrupting the established business models that the US TV networks along with the major sports leagues, especially the NFL, rely on. The TV networks and sports leagues have taken legal action against Aereo but have lost this action to Aereo through every rung of the US legal-appeal ladder. But now it is to face the final test at the US Supreme Court and I see this as being like the Betamax case in some ways especially in relation to innovation.
Australian readers have faced a similar litigation concerning a TV-streaming service offered here due to the main football leagues having an exclusive online partnership with Telstra and both parties fearing that the partnership’s value is diluted due to a TV-streaming service offering the football sportscasts online.
For example, the ability to stream a local broadcast form a known area to wherever you are, a practice undertaken with Internet radio, is being tested. Similarly, the concept of cloud-based DVR services where you can pick shows to record and view wherever you like is also to be tested. It will also be tested in the context of bringing material in to an area that is not meant to be shown in that area, such as a sports broadcast subjected to a “delay to the gate” rule where the sportscast is not shown live in the city it is played in unless a significant percentage of tickets are sold for that game.
Similarly, the concept of pay-TV companies offering IP-based services whether as a subscription option or add-on to a traditional subscription will be tested. This includes a cloud-based DVR service like what Cablevision is currently offering as a value-added service or simply offering the TV Everywhere service to view TV on your smartphone or tablet as what most cable-TV services are offering the US market.
Let’s hope that this case can shape on-line TV services for the good of the consumer rather than studios and sports leagues setting up environments to exploit the viewing public.