That would be a problem, the network says in a brief filed today, because “Millions of Americans still rely on free over-the-air broadcasts to receive television programming.” What’s more, “broadcast television not only continues to carry the majority of the country’s most popular shows, …
UPDATE, 5:10 PM: As it has from the beginning back in 2012, the latest legal battle between the broadcasters and Aereo comes down to whether the streaming service is engaging in a private or public performance. Aereo says the former and the broadcasters say the latter, and today a federal judge in Utah agreed with the broadcasters and shut the service down in six states as the two sides prepare to fight it out in front of the Supreme Court in late April. Unsurprisingly, Aereo CEO and founder Chet Kanojia is “disappointed” with today’s developments. Read the statement he provided Deadline here:
We are extremely disappointed that the District Court in Utah has chosen to take a different path than every other Court that has reviewed the Aereo technology. Consumers have a fundamental right to watch over the air broadcast television via an antenna and to record copies for their personal use. The Copyright Act provides no justification to curtail that right simply because the consumer is using modern, remotely located equipment. We are very sorry for the effect on our valued customers in the Tenth Circuit and we will pursue all available remedies to restore their ability to use Aereo.
Shares for the TV station group are down about 6.6% this morning after it missed Q4 earnings estimates, bringing its year-to-date stock performance to -27.2%. But execs urged analysts not to fret about its prospects — including if broadcasters fail to persuade the U.S. Supreme Court that Aereo infringes on their copyrights. For example, networks probably wouldn’t follow through on threats to restrict their prime time shows to pay TV if justices say that the streaming service can pick up local broadcasters’ over-the-air signals without paying a license fee. “The truth of the matter is that the amount of support that we provide as affiliates to the network programming is significant, especially with the amount of local programming that we supply, news production, and syndicated product that we purchase,” Sinclair CEO David Smith says. The variation in network ratings in different markets “demonstrates the importance of local branding to the networks and to their viewing.” Nor is the station group chief fearful that cable and satellite companies might replicate Aereo’s antenna-based technology to avoid paying retransmission consent fees to broadcasters. With all of the laws and regulations that govern pay TV providers’ relationship with TV stations, ”you’re talking years and years before that would get settled.” Smith also shrugged off the latest copyright infringement suit against Aereo in Utah, saying that “any litigation we’ve got going in Salt Lake City could be diluted by what the Supreme Court does.” The high court will hear arguments on April 22.
They have been given a date. The broadcasters and Aereo will argue their case before the Supreme Court on April 22 at 11 AM, the court announced today. SCOTUS agreed on January 10 to hear arguments on the petition that ABC, CBS, Fox, NBC and several other broadcasters submitted in October. The broadcasters want the High Court to review an April 1, 2013 ruling by the U.S. Court of Appeals in New York that confirmed a District Court decision and rejected their request for a preliminary injunction against the Barry Diller-backed streaming service. However, there are still a few more steps before the parties show up in Washington D.C. Briefs are due from the broadcasters on February 24 and March 3. Aereo must submit its response to the petitioner’s brief by March 26 and send in an amicus curiae brief of its own by April 2. Like in the decision by the Court to hear the case in early January, Justice Samuel Alito will be recused from the April arguments because his family owns Disney stock. He’s “considered to be pro-business/conservative, so this could be viewed favorably for Aereo,” says Susquehanna Financial Group’s Thomas Claps. If the remaining eight justices split equally, then the District Court’s pro-Aereo decision would stand.
Fox hopes to “create some precedents” with its digital plans for The Simpsons later this year when the long-running animated series will become “the face” of FXX, COO Chase Carey told analysts this morning in a call to discuss fiscal Q2 earnings. No specifics yet — but the exec says that it’s one of the reasons why Fox decided to keep the re-run rights instead of licensing to someone else. “There are times when our distribution businesses have a unique ability to take advantage of a set of rights. And The Simpsons is a perfect example.” The show will “help brand…and help drive” FXX, Carey adds, but Fox isn’t “turning it into The Simpsons Channel.” Would a similar strategy also make sense for, say, FX’s The Americans? Not necessarily, Carey says. “When you get to a one-size-fits-all [strategy], I don’t think that’s the way to go….What we’re not going to do is undersell the content” when others “see values that exceed what it’s worth to us.”
Wall Street is so driven by groupthink that I have to take my hat off to Bernstein Research’s Todd Juenger for sticking to his guns this morning about CBS. He’s one of the lonely few analysts who’s neutral about the company’s stock; 21 have a “buy” vs five who have a “hold”. That made him the wallflower at the CBS party: Its shares have appreciated 97.5%, well ahead of the benchmark Standard & Poor’s 500′s 32.7% in the period since late February 2012 when Juenger initiated his coverage with a “market perform” recommendation. The analyst says that he feels like someone who looks at the Mona Lisa and says “Eh, that’s a nice painting.” So why doesn’t he join the pack? He believes that “upside operating scenarios for CBS are either exhausted or fully baked into the stock, but downside risk remains.” Take retransmission consent. He underestimated how quickly the company would collect those fees from pay TV distributors. But now the revenues are “solidly built into expectations.” Showtime grew faster than he anticipated, but he wonders: “How much longer can it keep growing at the same pace?” And CBS’ ratings success could become a problem. “As the #1 network, there will always be the risk of ratings decline, no matter how good CBS’ track record. …There is always some chance the U.S. will wake up one day and no longer be interested in NCIS or CSI. We’re not saying that’s likely. But it is always a risk.”
If Aereo’s legal battles with the broadcasters were left up to Sundance Film Festival attendees, the streaming service would win in a landslide. “We’ve been sued by 17 media companies,” said Aereo CEO Chet Kanojia today on a Sundance panel on the subject of on creativity and change. The words were barely out of Kanojia’s mouth before the packed room broke out in cheers and applause. “You just won the Oscar, my friend!” bellowed moderator and former MySpace president Jason Hirschhorn as the more than 150 people in the Filmmaker’s Lounge continued clapping. “I don’t mean that as a trophy but as a fact,” the clearly surprised Kanojia added.
Related: Fleming Forecast On Sundance 2014
Just over a week after the Supreme Court decided to hear the industry’s claim that Aereo infringes on broadcasters’ copyrights, the CEO was joined on the panel by actor-director Joseph Gordon-Levitt, Twitter’s head of music Bob Moczydlowsky, and Atavist co-founder/editor Evan Ratliff. “We’ve always said HITRECORD is a production company not a platform,” Gordon-Levitt said of his collaborative hub website. “One thing about HITRECORD is that every time we do it, it’s different.” HITRECORD ON TV is set to debut tomorrow with back-to-back episodes on the Participant Media-owned cable channel Pivot. Six more episodes are to follow. For Kanojia, platforms were the key. “Given where the Internet is today, there is an opportunity to create new platforms for creators,” he said.
Aereo‘s new market announcements have served two purposes thus far. They’ve told consumers when they’ll be able to subscribe to the streaming video service. And they’ve put local lawyers and judges on notice that broadcasters might swoop in to raise their …
That’s still a big question for broadcast TV investors today following the U.S. Supreme Court’s decision on Friday to hear the industry’s claim that Aereo infringes on their copyrights with it streams their over-the-air programming without permission. Most broadcast company stocks including Sinclair, Gannett, and Gray Television are down today, slightly more than the overall market. But Wall Street analysts — who typically like to encourage people to buy stocks — mostly urge investors to relax. The most prevalent concern is that broadcasters, if they lose at the Supreme Court, might make good on their threats to only offer their hit shows on pay TV. That could sting as they “lose reach, ratings from broadcast-only homes, and reverse network [compensation]” from affiliates, says Janney Capital’s Tony Wible. Pivotal Research’s Brian Wieser also fears that if broadcasters scale back their over-the-air shows then “the political ill-will that would follow… would be a major negative.” And political leverage is broadcasters’ ace in the hole. If they lose at the Supreme Court then “we expect they would pursue legislation and involve Congress” to change the law against Aereo, Credit Suisse’s Michael Senno says. The industry has one of the most powerful lobby groups in Washington. Even if lawmakers are unmoved, he says not to worry: Aereo doesn’t have a compelling service, he says, and cable or satellite companies that might want to create a copycat service to avoid paying retransmission consent fees face “a number of hurdles” before they could “leverage this technology, if ever.” Wells Fargo’s Marci Ryvicker also tells investors to chill.
UPDATED WITH REACTIONS: The broadcasters and Aereo are getting their day in the top court in the land after all. The Supreme Court agreed today to hear arguments on the petition that ABC, CBS, Fox, NBC and several other broadcasters submitted on October 11. “The petition for a writ of certiorari is granted. Justice Alito took no part in the consideration or decision of this petition,” said the Court in its order today. No word yet on when SCOTUS will hear oral arguments in the case — with the Court’s already full schedule, at this point it could only come during the two weeks they hear arguments in April or next term. “We look forward to presenting our case to the Supreme Court and we have every confidence that the Court will validate and preserve a consumer’s right to access local over-the-air television with an individual antenna, make a personal recording with a DVR, and watch that recording on a device of their choice,” Aereo CEO Chet Kanojia said after the order was revealed. The petitioning broadcasters also responded. “We are pleased the Court has agreed to hear this important case. We are confident the Court will recognize that this has never been about stifling new video distribution technologies, but has always been about stopping a copyright violator who redistributes television programming without permission or compensation,” said Fox, Univision and PBS in a joint statement. Added CBS: “We believe that Aereo’s business model, and similar offerings that operate on the same principle, are built on stealing the creative content of others. We are pleased that our case will be heard and we look forward to having our day in court.” Said ABC and NBC together: “We are gratified that the Supreme Court has granted our petition to review issues that both sides recognize as significant, and we look forward to making our case to the Court.”
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.