Aereo+CloudThe Supreme Court today ruled that Aereo’s video service violates copyright law – a decision that will force Aereo to shut down its innovative offering.

Aereo has offered a remote antenna service that enables consumers to receive broadcast TV channels from their local market over the Internet. The service also includes DVR capability, selling for about $12 a month. The service has been available in some markets for as long as two years. Aereo’s web site shows the service currently available in 27 markets.

Aereo butted heads with broadcasters because the company does not pay the retransmission fees that traditional cable TV providers pay to carry local content. Although Aereo won some early judicial victories, broadcasters took the case to the Supreme Court.

Key Aereo investor Barry Diller reportedly told CNBC that “we did try, but it’s over now.”

Supreme Court Aereo Decision
Previous court decisions have ruled that shared antenna services violated copyright law because such offerings constituted “public” performances. Aereo had argued that by dedicating a dime-sized antenna to every customer its offering did not constitute a public performance.

But in its decision, the Supreme Court ruled that “Aereo performs petitioners’ works publicly. . .  It does not merely supply equipment that allows others to do so.”

Although local broadcasters were Aereo’s most vocal critics, other opponents included large cable companies, who saw Aereo as a threat to their business; and content providers, who were concerned that the Aereo offering would force them to reduce their prices to broadcasters and cable companies.

Aereo supporters included consumer groups as well as small cable companies, who might have been interested in partnering with Aereo as a means of reducing content costs, and the Computer and Communications Industry Association. CCIA members include software and Internet companies such as Google, eBay, Facebook, Microsoft and Yahoo; as well as a variety of service providers such as Sprint, T-Mobile, XO Communications and Dish Network. Some of these companies were concerned about the impact that a decision against Aereo might have on other cloud services.

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