Big Media companies shouldn’t be able to have a business “selling a 500-channel package to people who don’t want it,” Aereo’s Chet Kanojia told Wall Streeters today at the Citi 2014 Internet, Media and Telecommunications Conference which coincides with the International CES confab in Las Vegas. But the giants have a lot invested in their pay TV bundles and, as a result, are trying “to kill us through a war of attrition” with multiple lawsuits and appeals in different jurisdictions alleging that Aereo infringes on their copyrights when it streams their over-the air signals without payment. (Aereo says it leases the kind of equipment consumers clearly can use to watch broadcast TV for free.) “They’re driven by control,” he says. For example when cable first challenged broadcasters “the same set of issues emerged…Every technological issue starts with ‘the world is ending and we’re going to take our signal away.’ The reality is they prosper.” Kanojia rejects the idea that his service poses a threat to broadcasters’ efforts to secure higher retransmission consent payments from cable and satellite companies. “I actually think there’s going to be no impact on retransmission consent.” The reason: The TV industry is too concentrated. For example, a distributor can’t tell Disney that it wants ESPN but won’t pay for ABC. “You can’t get there from here.”
Year-End: Legal Battles Of 2013 And Beyond – Aereo, ‘Hobbit’ Sequels, ‘Walking Dead’ Vs. Frank Darabont, Prospect Park & ‘Godzilla’
One in a series of Deadline stories that look back on 2013 and ahead to 2014.
It was a year that saw the Weinsteins and Warner Bros clash over the title of The Butler and then get into the ring again for The Hobbitsequels. 2013 also witnessed the first fired Walking Dead showrunner wanting to take a bite out ofAMC for his piece of the cable blockbuster, a Ray Donovan EP nailed by the feds in a big-time gambling scheme right out of the Showtime Hollywood fixer series and a monster of a legal drama in the making as Legendary Pictures tried to swat some seasoned producers off its Godzilla reboot. In the end, with those cases and more, the Hollywood legal landscape of 2013 proved to be a stringent reminder of why they call it show business and not show friends.
With money and rights at the basis of most of the disputes, the complaints and motions were as numerous as locusts and as prevalent as rats, with many of them spilling over into 2014 and perhaps beyond. Just ask Barry Diller and Les Moonves as streaming service Aereo and CBS and other broadcasters suit up for a potential Supreme Court winner-takes-all showdown next year. Or Prospect Park as it fights ABC in a $125 million suit over licensed soaps All My Children and One Life To Live while having to contend with a complaint from co-founder Jeff Kwatinetz seeking a declaratory judgment from the court over non-compete clauses in his contract with the company. Sure, sometimes weapons are lowered like when Paramount and asset management firm Content Partners reached an undisclosed settlement on December 12 in their $45 million film financing slate dust-up after three years going at it in the courts. With a pivotal hearing looming, that was realpolitik in action as the sudden deal allowed the studio to sidestep dragging JPMorgan Chase, which corporate parent Viacom has significant banking dealings with, into the protracted case despite the blessing of the presiding judge. However, with the grinding duration of a lot of the legal disputes in this town, such resolution is rare, even when the end seems in sight.
Look for instance at Warner Bros and the seemingly never-ending Superman heirs’ rights battle. After a string of seemingly conclusive legal wins this year, WB and subsidiary DC Comics now could face more Krypton courtroom drama in 2014. On December 10, the co-creators heirs’ attorneys Marc Toberoff and Keith G. Adams petitioned the 9th Circuit for either a rehearing by the panel that found in the studio’s favor on November 21 or by the full court itself. If that effort fails, they could take the matter to the SCOTUS. Even with all the billings that O’Melveny & Myers get to make to WB after years of litigation, the sharp-elbowed Daniel Petrocelli and Matthew Kline must want to be able to declare a super-lawyer victory and move on – after all, they also have the Trouble With The Curve copyright suit to handle for the studio and a February 24 hearing on a summary judgment motion in that case by plaintiffs Ryan A. Brooks and Gold Glove Productions to fend off.
If you thought the legal battle between Aereo and the broadcasters at the Supreme Court would take a break for the holidays, think again. Today, ABC, CBS, Fox, NBC and several other broadcasters fired back at the …
Deadline Financial Editor David Lieberman and host David Bloom talk about highlights from this week’s big UBS media investor conference, which was dominated by lots and lots of talk about the future of pay television, whether the conversation was about DirecTV dropping channels, Viacom and Sony possibly starting an online service, Aereo’s big talk about partnering with cable companies and challenging broadcasters in the Supreme Court, or rising ad revenues for CBS and other broadcasters in a year plumped up by revenues from the Winter Olympics, mid-term elections and an improving economy.
Just more than two months to the day after broadcasters petitioned the Supreme Court to overturn a denied injunction against the Barry Diller-backed streaming service, Aereo today responded with an unexpected battle cry of “bring it on”. “We have decided to not oppose the broadcasters’ petition for certiorari before the United States Supreme Court. While the law is clear and the Second Circuit Court of Appeals and two different federal courts have ruled in favor of Aereo, broadcasters appear determined to keep litigating the same issues against Aereo in every jurisdiction that we enter”, said Aereo CEO Chet Kanojia today as the company filed a brief (read it here) with the Court. “We want this resolved on the merits rather than through a wasteful war of attrition”. Since Aereo’s 2011 launch, broadcasters have insisted in various jurisdictions and legal actions that the company is breaking the law by transmitting their shows to its Internet subscribers without paying a license fee. Today’s 31-page response and lack of objection to the broadcaster’s petition now raises the stakes to a winner-take-all proposition.
Just over two months to the day that Hearst-owned WCVB-TV was denied its preliminary injunction motion against the Barry Diller-backed streaming service, the Boston ABC affiliate has began its predictable appeal. “Simply put, this case affects the very future of over-the-air broadcasting as we know it,” says the distinctly not understated 160-page appeal made Monday to the First Circuit (read it here). As others have argued about Aereo in other cases, part of their latest copyright argument against the service is that Massachusetts-based federal District Judge Nathaniel Gorton didn’t know what he was talking about in his October 8 order. “In denying WCVB’s public performance argument, the district court failed to engage in any independent analysis and appears to have relied exclusively on the reasoning of a Second Circuit case, which has been harshly criticized by copyright scholars and had not been followed by any other court outside that circuit,” asserts the filing. This week’s latest Aereo legal action comes as Disney, CBS, NBCUniversal, WNET, Fox, and Univision await to learn if the Supreme Court will hear their potentially game changing October 11 submitted petition to review a 2012 ruling not to shut Aereo down pending a trial. It also comes as Aereo announced plans to expand to new markets the likes of Detroit and Denver and has been slapped with a second injunction motion in Utah.
A combo deal offering consumers an Aereo subscription with broadband service “makes a ton of sense,” Aereo CEO Chet Kanojia said today at the UBS Global Media and Communications Conference. That would help the fledgling, Barry Diller-backed operation which offers its subscribers streams of local broadcasters’ free, over-the-air signals. It also could help cable companies that have said they’d consider launching their own version of Aereo if broadcasters continue to demand big price increases for retransmission consent rights. Aereo would be difficult to mimic because there’s a “broad portfolio [of patents] that we’re pursuing,” Kanojia says. His process of using micro antennas tuned to different frequencies “has never been done before.” Aereo also enjoys marketing advantages by being first out with the product. Nothing is likely to happen until the courts decide what to do with broadcasters’ charge that Aereo infringes on their copyrights by transmitting their signals without their permission. (Aereo says that it simply leases versions of the kinds of equipment consumers already use to watch free TV.) But Kanojia says he doesn’t worry that, if he wins in court, broadcasters will make good on their threats to take their signals off the airwaves. “I have the deep conviction that Congress will protect free broadcast.”
A federal judge today found the Alki David-run free-TV-over-the-Internet company in contempt of court for violating a nearly nationwide ban. Hoping to avoid Judge Rosemary Collyer’s wrath, FilmOn X claimed in late October that it was system error that led to copyrighted programming from Fox, NBC and ABC being played on the service in the Boston area in September. Despite her order on September 5 for FilmOn X to go dark everywhere but in New York, Connecticut and Vermont, the DC-based judge did not impose a fine on the company for its one-day indiscretion. Collyer did say in a hearing Monday that she would fine FilmOn X $20,000 a day if there was a repeat of the mistake — intentionally or not.
Don’t include Charlie Ergen among the small but growing group of industry watchers who believe cable and satellite companies could soon face competition from a company that offers a similar bundle of channels via the web. “It’s going to happen at some point in time,” the Dish Network chairman told analysts today. “But most programmers have been hesitant to embrace that kind of dramatic change. In the short term, it’s unclear that that’s going to happen.” Intel is one of the companies that wanted to become an online power — but now hopes to sell its venture, called On Cue. Verizon and Liberty Media are said to be interested. Dish isn’t. “We’re not in any discussions with Intel about their over-the-top product,” Ergen says. Still, he evangelized about the value of keeping one’s options open. Although “we’re not trying to drive over-the-top,” he says that “if things are going to change, then we want to be involved with it.”
The No. 1 satellite company warns broadcasters that their rush to raise retransmission consent fees could backfire. DirecTV‘s outlays to broadcast stations are up 50% this year, and that’s “not sustainable,” CEO Mike White told analysts today …
Long Island City, New York (October 29, 2013) – Aereo, Inc., today announced plans to launch its groundbreaking online television technology in the Denver metropolitan region on November 4. The Denver metro area includes 67 counties across Colorado, Nebraska and Wyoming and more than 3.4 million consumers. Aereo’s announcement follows its expansion earlier this year to the Boston, Atlanta, Miami, Salt Lake City, Houston, Dallas and Detroit metropolitan areas. Aereo plans to announce additional launch dates for its expansion cities throughout the remainder of the year.
Seems they’re considering just that — with Time Warner Cable weighing the possibility of buying the Barry Diller-backed streaming video company — Bloomberg reports today, citing unnamed sources. Aereo uses thousands of tiny antennas to pick up local TV signals that it streams to its subscribers without paying broadcasters a dime. If the cable and satellite companies followed through, it could create a nightmare for broadcasters. TV station owners likely will collect $3B this year from cable and satellite company retransmission consent payments, and the amount is expected to double during the next five years. By 2015 the payments could account for 24% of CBS’ cash flow, 11% of Fox’s, and 3% of Disney’s, Guggenheim Partners’ Michael Morris predicted this week. Much of that revenue could evaporate if cable and satellite companies replicated Aereo’s model. No wonder the major TV station owners have asked several courts, including the U.S. Supreme Court, to rule that the service infringes on their copyrights. (Aereo says it merely leases consumers the kind of equipment they could use to watch and stream TV at home for free.)
As broadcasters and Aereo wait to see if the Supreme Court will agree to the former’s recent petition to hear the case against the latter, the Barry Diller-backed streaming service has been sued …
On day of the deadline set by a federal judge last week to explain why she shouldn’t hold FilmOn X in contempt of court for violating a nearly nationwide ban, the Alki David-run free-TV-over-the-Internet company basically said “Oops.” Calling the looming contempt “a drastic remedy,” FilmOn X on Monday said it was simply a mistake that it had copyrighted programming from Fox Broadcasting, ABC and NBC playing in the Boston area after DC-based Judge Rosemary Collyer’s order on September 5 to pull the plug everywhere but in New York, Connecticut and Vermont. “At worst, FilmOn X’s testing of its software inadvertently allowed a limit number of users in the First Circuit to access copyrighted programming for a brief period of time after the Hearst decision. Upon discovering that this error had occurred, FilmOn X immediately and voluntarily took corrective action before Plaintiffs brought this issue to this Court’s attention,” said the 15-page response filing from the company (read it here).
This should interest Motor City lawyers, as well as viewers there who want to stream programming from local TV stations without a cable/satellite subscription or an antenna. Seems that every time Aereo enters a market, it faces a …
Now it really doesn’t look like the streaming service will get to grill the CBS Corp boss. Less than a week after broadcasters petitioned the Supreme Court over Aereo, a NY-based federal judge today denied the Barry Diller-backed company’s second attempt at winning permission to depose Les Moonves. Aereo wanted restrictions that Magistrate Judge Henry Pitman put on the scope of its discovery in the 18-month-old copyright infringement case lifted, including access to a wide range of documents. It also wants to park the rarely reticent Moonves in front of its lawyers because he “has made public statements regarding the claims in this case, including comments that contradict sworn CBS testimony,” according to its filing earlier this year. Reaffirming Pitman’s ruling of June 4, District Judge Alison Nathan today said no way. “Nothing in the record suggests that the rulings were clearly erroneous or contrary to law, or that the substantial deference due to the resolution of discovery disputes by a magistrate judge should not be accorded in the instant matter,” she said in her order (read it here).
The IAC chief provided the only hint of drama today at the Library of American Broadcasting’s “Giants of Broadcasting” awards luncheon in NYC. Everyone wondered how Barry Diller — one of today’s 11 honorees — would deal with the fact that he supports Aereo. Most in the audience consider the streaming service to be illegal, and a threat. The IAC chief didn’t flinch: “It’s especially nice that I get this honor when many people in this room are suing me,” he said. He added, in jest, that “after you’re accused of stealing a few times, you get a little sensitive.” The former ABC exec, and creator of Fox Broadcasting, gently chided broadcasters as they demand rising fees from cable and satellite companies that retransmit their signals — and threaten to pull their best shows from the airwaves if courts support Aereo, which streams their programming without their permission. “I always believed broadcasters should have a second revenue stream” in addition to advertising, Diller said. But they need to be sensitive to the fact that “there are people who can’t afford cable or satellite.” He added that he’s glad he became a broadcaster years ago when it was clear that the industry should support the public interest — “values that were separate from competition, separate from business.” Still, he says, local broadcasting will endure and TV stations are “one of the great buys.”