The US Supreme Court has ruled that Aereo, a US-based service that provided broadcast television through online streaming, offers an illegal product.
The company’s investors include internet media company IAC, which first invested in Aereo’s $20.5m series A round in 2012, as well as Himalaya Capital Ventures, FirstMark Capital, Highland Capital Partners, First Round, High Line Venture Partners and SV Angel.
To date, Aereo has raised $97m across four rounds.
By setting up antennas in warehouses to receive TV signals and then streaming it to consumers via the internet for $8 a month, Aereo’s product appealed to cord cutters seeking an alternative to expensive cable TV. It was considered highly disruptive to the TV industry.
The company hoped that setting up one antenna per customer, meaning no two subscribers would watch the same signal, would circumvent copyright issues but the court did not agree.
Broadcasters ABC, NBC and CBS successfully argued that the company was unlawfully exploiting their copyrighted works without permission or payment, and the court sided six to three with the television industry.
The broadcasters’ shares soared on announcement of the verdict. Aereo stated that it does not have a plan B and is now evaluating its options.
The ruling provides clarity for the TV industry, but muddies things for the cloud computing sector as Dropbox, and Apple’s iCloud also allow consumers to access copyrighted content online.
The justices were careful to state that the ruling against Aereo was limited. But some onlookers believe the assessment offers no meaningful guidance on the subject.