Is Aereo a 21st century Betamax? Maybe

A federal judge in New York handed the entertainment industry a preliminary defeat in an important copyright infringement lawsuit Wednesday, granting more leeway to online services that record and stream broadcast TV at their customers’ behest.

The case pitted broadcasters against Aereo (formerly Bamboom), a start-up that makes local broadcast TV shows available to subscribers online for $12 a month, albeit only in New York City at the moment. Aereo rents out tiny digital antennas hooked to powerful computers that capture and record over-the-air telecasts, then streams them over the Internet. The plaintiffs argued that Aereo was, in effect, a cable-TV service that copied and retransmitted programs without obtaining permission or paying royalties, and they sought an injunction that would stop Aereo in its infancy.

Judge Alison J. Nathan refused to grant an injunction, however, ruling that Aereo was likely to win once the case went to a full-blown trial. That’s because Aereo’s service is covered by the U.S. 2nd Circuit Court of Appeals’ decision in favor of Cablevision and its network-based DVR service, Nathan wrote.

Both of those rules are rooted in the Supreme Court’s 1984 decision in favor of the Sony Betamax, which held that the device was legal because it enabled people to make a fair use of copyrighted TV shows -- to wit, recording them for later viewing (“time shifting”). The 2nd Circuit went one step further in Cablevision, holding in essence that it doesn’t matter where the recording device is located as long as each recording is made at a viewer’s command and isn’t shared. Underlying that ruling is the notion that copyright owners’ exclusive rights to perform a work in public don’t apply to time-shifting technologies, even when the equipment is stored outside the viewer’s home.

Like Cablevision’s racks of DVRs, Aereo’s antennas serve only one customer at a time, its servers make recordings only at the customer’s direction, and each recording can be viewed only by the customer who made it. But Aereo goes one significant step further than Cablevision: It streams shows to users through the Internet to wherever they happen to be, on whatever Internet-connected device they happen to be using.

Nathan notes that the broadcasters didn’t argue that this kind of space-shifting, which has been available for years from Slingbox devices, is illegal. She held that people who use this kind of technology to remotely watch recordings they made for themselves aren’t performing those shows publicly. Otherwise, she wrote, it would be illegal for people to transmit a recording they made in their den to a mobile device in their bedroom.

Copyright lawyers will supply more expert readings on this than I can, but if Nathan’s ruling stands, the trend line seems obvious. The protection that Betamax offered technologies is gradually extending to services that virtualize the features of the VCR and incorporate the capability and flexibility of digital media. As long as the service provider isn’t recording or digitizing content on its own initiative, using the same copy to serve multiple customers or circumventing electronic locks, there seems to be an opening for companies to help people consume media on their own terms -- in the format and at the time and place they choose. And they may be able to do so even if their service competes with the copyright owners’ video-on-demand and pay-per-view offerings.

The precedent that Nathan followed is binding only in the three 2nd Circuit states. The federal courts in California will soon have the chance to explore a similar set of issues in the lawsuits that broadcasters filed against Dish Network, whose Hopper DVRs can automatically record eight days’ worth of the four major broadcast networks’ prime-time programs and skip over the commercials during playback.

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