Aereo founder and Chief Executive Chet Kanojia called the Supreme Court's ruling that his company is in violation of the Copyright Act a "massive setback for the American consumer" that send a "chilling message to the technology industry."
Launched in 2012, Aereo records and streams the signals of local broadcasters over the Internet. Subscribers pick up shows via remotely stored antennas, and then watch them on their tablets, computers or televisions.
The service, available in 11 markets including New York and Boston, costs between $8 and $12 a month and includes a cloud-based Digital Video Recorder.
Broadcasters took Aereo to court charging that the service steals their content. Aereo countered that it was nothing more than an advanced television antenna.
"When new technology enables consumers to use a smarter, easier-to-use antenna, consumers and the marketplace win," Kanojia said.
The Supreme Court disagreed, ruling 6-3 that Aereo was not just an antenna service. In its ruling, the court compared Aereo to a pay-TV distributor.
"Aereo is not simply an equipment provider," the ruling said. "Aereo sells a service that allows subscribers to watch television programs, many of which are copyrighted, virtually as they are being broadcast."
In a dissent, Justice Antonin Scalia, joined by Justices Samuel Alito and Clarence Thomas, didn't disagree with the court's "evident feeling that what Aereo is doing (or enabling to be done) to the networks' copyrighted programming ought not to be allowed." But he also thought the court was distorting the Copyright Act to forbid it.
"It is not the role of this Court to identify and plug loop holes. It is the role of good lawyers to identify and exploit them, and the role of Congress to eliminate them if it wishes. Congress can do that, I may add, in a much more targeted, better informed, and less disruptive fashion than the crude "looks-like-cable-TV" solution the Court invents today," Scalia wrote.
Aereo backer Barry Diller said the ruling is a "big loss for consumers" and he saluted Kanojia for "fighting the good fight."
Gene Kimmelman, president and chief executive of media watchdog group Public Interest, said he feared the ruling "leaves consumers beholden to dominant entertainment and cable companies that constantly raise prices and gouge consumers."
As for Aereo's future, Kanojia said, "our work is not done. We will continue to fight for our consumers and fight to create innovative technologies that have a meaningful and positive impact on our world."