Diller Funds Aereo With Supreme Court Review Looming

NEW YORK —Aereo announced Monday that closed a $34 million Series C round of financing. On Friday, the Supreme Court is set to deliberate broadcasters’ request for review of their case against Aereo. The temporal proximity was noted by Twittarians.

“Aereo raises $34 million in financing with Supreme Court due to decide on Friday whether to hear lawsuit filed by broadcasters wanting to close it,” Horizon Media’s Brad Adgate tweeted.

TechCrunch: “What Legal Battles? Video Upstart Aereo Lands $34M In New Funding, Plans Big U.S. Expansion.”

VentureBeat: “ Aereo TV-anywhere startup gets $34M despite litigious fight with broadcasters.”

Aereo is retransmitting broadcast television signals to mobile devices for a fee without an agreement with the stations. Those stations and their groups are suing Aereo for copyright violation—the premise that underlies retransmission consent law. Two federal courts and an appeals court have denied the plaintiffs’ request for an injunction against Aereo. The plaintiffs subsequently filed a cert petition with the Supreme Court Oct. 11, 2013, asking for a review. The issue is on the court’s docket for Jan. 10.

Aereo stated publicly in mid-December that it would not oppose the petition.

“While the law is clear and the Second Circuit Court of Appeals and two different federal courts have ruled in favor of Aereo, broadcasters appear determined to keep litigating the same issues against Aereo in every jurisdiction that we enter. We want this resolved on the merits rather than through a wasteful war of attrition.” Aereo CEO Chet Kanojila said.

There is no guarantee that the justices will grant the petition, nor is there a way to know which justices will review it, Harry Cole of Fletcher, Heald & Hildreth noted in CommLawBlog. However, he said, “it doesn’t hurt the chances” of review that eight organizations filed amicus briefs supporting the case. Especially considering those include the National Football League, Major League Baseball, Viacom, Time Warner and Warner Bros., among others.

Meanwhile, Aereo marches on with service in New York, Boston, Atlanta, Miami, Salt Lake City, Houston, Dallas, Denver, Detroit and Baltimore. (Kanojila said five more markets would be added by the end of the current quarter.) Two levels of service—$8 and $12—get the subscriber app-based access to a server fed presumably by individual antennas assigned to said subscriber.

The antennas are arranged to pick up over-the-air signals in Aereo’s respective markets. In this way, Aereo says it is not violating copyright law because it is enabling an private, rather than a public, performance. Copyright now governing TV content is predicated on the definition of public performance. User access to remotely stored content was deemed a private performance under Cablevision, a case won by the cable operator to provide server-based remote DVR service to subscribers.

This week’s investment round was led by IAC, Barry Diller’s Internet empire. Gordon Crawford and Himalaya Capital Management, as well as existing investors Highland Capital Partners, FirstMark Capital and others joined.