"We are disappointed in the outcome, but our work is not done."
On Wednesday morning, Aereo provided the aforementioned CNBC statement in the wake of the Supreme Court’s ruling that the Boston-based company was guilty of copyrighting content from TV broadcasters like CBS, NBC, FOX and Disney.
Aereo claimed it was supplying the technology via tiny antennas, which its subscribers could then rent and use to watch and record various TV shows from top cable networks in the cloud. In other words, the company tried to saddle consumers with the responsibility of streaming the shows.
That positioning was the basis of Aereo’s business. Founder and CEO Chet Kanojia has gone on record multiple times since the company’s founding in 2012, stating they didn’t have an explicit back up plan.
Now, the startup either faces a major pivot, or the perhaps more imposing challenge of finding a way to both rehab rapports with broadcasters and pay their fees, and spin a new value proposition to consumers.
“We've said all along that we worked diligently to create a technology that complies with the law, but today's decision clearly states that how the technology works does not matter,” continued the company. “This sends a chilling message to the technology industry.”
The company spoke with accuracy; many members of the industry in Boston expressed dismay over the Court’s decision.
Not only did the Court deliver a blow to Aereo, but it also slapped the hands of the startups and hurt the Boston tech ecosystem. To many, the ruling is another example of the government not understanding how “innovation” works. The honeymoon period from earlier this month when the Court voted to limit flimsy software patents is over; startups are back to being the misunderstood children of the economy. And it’s not only the companies, but also the consumers that feel the loss.
Locally, it’s hard to see one of the few (albeit growing) Boston-area’s consumer tech companies fall to the wayside, just as it seemed like it was gaining some serious traction. Though headquartered in New York City, Aereo has 75 of its 110 employees based in an office in Boston. The company raised $97 million in funding from New York City’s FirstMark Capital, Cambridge-based Highland Capital Partners, media mogul Barry Diller, among others.
And in the face of controversy, Kanojia had strong allies on Aereo's side.
"We came in with our eyes wide open," Highland Capital's Dan Nova told BostInno in a previous interview. But even he admitted, "We never imagined it would ever go to the Supreme Court."
Diller, founder and CEO of IAC, similarly voiced his support in a statement. “I do believe blocking this technology is a big loss for consumers, and beyond that I only salute Chet Kanojia and his band of Aereo'lers for fighting the good fight,” he said.
But Aereo’s loss could take a toll on relationships between tech companies, too. With many people believing that Aereo’s run is over, other startups are swooping in to try and hire their talent. The company doesn’t yet have a plan for a pivot, but it could, and aggressively moving in to pick from Aereo’s team is poor form.
But I’m only one opinion. Take a look at some others below.
Image via Associated Press: Bebeto Matthews
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