Policy

Free TV: Aereo’s New Legal Move

8/06/2012 12:01 AM Eastern

Aereo, the over-the-top TV startup giving broadcasters a case of heartburn, is
aiming to bulk up its legal defense by giving away an hour of TV per day to any
New Yorker who wants it.

The company last week began offering free access to live or recorded content from
28 channels in the Big Apple for a continuous one-hour period every day. Aereo, whose
backers include IAC chairman Barry Diller, also introduced new pricing plans, ranging
from $1 per day for three hours of DVR storage to $80 annually for 40 hours of storage.

Aereo’s “Try for Free” and expanded pricing options comes three weeks after a federal
district court judge denied a request by a group of 17 broadcasters to shut down the
company for copyright infringement (see “Why Some Cable Ops Are Cheering Aereo’s
Legal Win,” July 16).

By offering consumers access to free TV, Aereo is trying to show it’s serving the public
interest, according to BTIG Research senior analyst Rich Greenfield. “[W]e suspect
its ongoing court case will be strengthened by helping consumers access public broadcasting
signals at no cost and with no credit card required,” he wrote in a blog.

That was a key point in the U.S. District Court for the Southern District of New
York’s July 11 ruling, which noted, “Aereo is a business and does not provide ‘free’ access
to broadcast television.” The decision relied on a previous appeals court ruling
that Cablevision Systems’ Remote Storage-DVR service did not violate copyright laws.
Aereo allocates tiny antennas to individual users, the same way the RS-DVR dedicates
storage to specifi c subscribers, the court found.

Aereo — which markets itself as an alternative to pay TV — claimed it was “enhancing
and supporting public access” to local TV with the limited free service. “In times
of emergencies and breaking news, access to timely, live information is crucial,” the
company said.

September