The U.S. Supreme Court will decide the fate of Aereo.
The high court said on Friday that it will hear arguments from the major broadcast networks that Aereo, a start-up that allows people to stream local television stations, violates copyright law and should be shut down.
Launched in 2012 and backed by media mogul Barry Diller, Aereo is available in 10 cities, including New York. It distributes broadcast signals via a tiny antenna and offers customers access to a cloud-based digital video recorder that holds up to 60 hours of content. The service costs $8 to $12 a month.
Broadcasters CBS, NBC, ABC and Fox asked the Supreme Court in October to overturn an earlier decision by the U.S. Court of Appeals for the Second Circuit in New York, which said that Aereo’s transmissions and recordings are not “public performances” of copyrighted material.
Broadcasters fear that Aereo, which does not pay them for their content, could grow in popularity and threaten distribution fees it gets from pay-TV distributors including cable and satellite companies.
“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,” said CBS Corp. in a statement on Friday. “We are pleased that our case will be heard and we look forward to having our day in court.”
Aereo’s Chief Executive and founder Chet Kanojia said in a statement that if the court rules against the company, it will have a negative effect on consumers and the cloud computing industry.
“We believe that consumers have a right to use an antenna to access over-the-air television and to make personal recordings of those broadcasts,” Kanojia said. "The broadcasters are asking the Court to deny consumers the ability to use the cloud to access a more modern-day television antenna and DVR.”
Kanojia reiterated previous statements that the company hoped the case would be “decided on the merits and not through a wasteful war of attrition.”
The company said earlier this week that it has raised $34 million in a new round of financing that it will use to expand its service.
Supreme Court arguments are expected to take place in April, followed by a decision in June.
Follow on Twitter: @rfaughnder