In a 6-3 ruling, the Supreme Court has ruled that Aereo is in violation of copyright law when it streams over-the-air TV channels to consumers.
The ruling is a major victory for broadcasters, who have demanded that Aereo pay them a fee for carrying TV content. Writing for the Court, Justice Stephen Breyer said Aereo is no different from other video providers because the content it sends to viewers constitutes a "public performance." That's despite the fact Aereo gives each of its subscribers their own TV antennas in a deliberate attempt to circumvent that legal issue.
"These behind-the-scenes technological differences do not distinguish Aereo's system from cable systems, which do perform publicly," the Court's opinion reads.
This means that like cable companies, Aereo must pay for "retransmission" of broadcast content. Aereo had argued that its service was merely an extension of traditional cloud-based DVR services. Aereo defenders claimed during oral arguments that a negative outcome for the company would result in unintended consequences for the broader cloud computing industry. But the Court doesn't seem to agree, asserting simply that it doesn't expect its narrow ruling on Aereo to hamper innovation, as some fear it will.
"Given the limited nature of this holding, the Court does not believe its decision will discourage the emergence or use of different kinds of technologies," according to the opinion.
The high court's sweeping decision means little will change for consumers who had looked to Aereo as a way to drop their cable subscriptions. Consumers have been increasingly clammering for live television--particularly sports--conveniently streamed over a device of one's choice without having to pay for an entire cable bundle--a service that Aereo offered.
But the court left little hope for Aereo to maintain its business without paying the licensing fees cable companies do to retransmit broadcast program. The decision will fortify the businesses of broadcast networks, which fiercely fought Aereo in several courts over the past two years for what they said amounted to theft of their shows.
Three conservative justices dissented: Antonin Scalia, Clarence Thomas and Samuel Alito. Comparing Aereo to a "copy shop that provides its patrons with a library card," Scalia argued that Aereo didn't transmit anything at all — its customers play the content to themselves, and so couldn't have violated copyright law.
While Aereo will likely live on in some form over the near term, its entire business model was predicated on avoiding paying retransmission fees.
Had the Court ruled the other way, the decision would have likely upended the entire television industry. Here's the decision in full: