Supreme Court Deathmatch: Aereo vs. The Entire Broadcast Network Industry

Aereo-Logo-2013For the last six months, a friend of mine has relentlessly tried to get me to ditch my Xfinity hookup and replace it with Aereo, an online TV subscription service. To hear him tell it, it’s the greatest thing ever invented - immediate and live access to broadcast news, sports, and TV shows from the big 10 networks such as NBC, CBS, ABC, FOX, PBS (no cable channels though), all for a measly $8 a month. I think I’ll wait though. I’m happy with my yesteryear technology and I derive a certain amount of comfort from mindlessly flipping through hundreds of channels I’ll never watch. More importantly, Aereo may not even exist in six months. That’s because tomorrow the Supreme Court will hear oral arguments in the case of American Broadcasting Companies, Inc. v. Aereo, Inc. And if Aereo loses, according to its own CEO, the company is kaput.

For those who don’t know, Aereo is a startup that takes television broadcasts from networks and retransmits them to you live via the internet. You can also store these broadcasts in a cloud-based DVR, all for the cost of two cups of coffee. As it turns out, even though you’re paying Aereo, Aereo is not paying the networks; it's just ripping these broadcast signals out of the air and streaming them to you. That didn’t make the networks too happy, so they banded together and sued Aereo for copyright infringement.

This isn’t an easy case and I don’t envy the justices the amount of work they'll have to even understand the technology at play (read this article if you want to know how behind-the-times the SCOTUS really is). Ultimately, this case turns on whether Aereo’s retransmission of broadcast television constitutes a “public or private performance” of copyrighted works. Private performance is perfectly legal, like when you buy a DVD and show it in your home. Even if you invite 100 friends over to watch, you’re safe. But let’s say you rent a theater and charge for admission - that would make the performance public, and that becomes copyright infringement.

In this case, the networks argue that Aereo’s actions constitute public performance because:

  1. Aereo streams “live TV” to a wide variety of subscribers;
  2. Aereo charges fees for its services;
  3. Unlike other retransmitters, Aereo doesn’t pay licensing fees to the networks for permission to broadcast their content.

In opposition, Aereo argues that it does not transmit “to the public.” It transmits only to its paying user base. Furthermore, the choice about what gets retransmitted at any given time is made by the subscriber, not Aereo. Some lower courts have already sided with Aereo, but if I’m being totally honest, I empathize with the networks, even though siding with a corporate copyright holder gives me the willies. Creating and broadcasting content is back-breakingly hard and terrifically expensive. Even some of those low-budget reality shows for third-rate cable channels that look like they were shot on iPhones… oftentimes they have budgets in the tens of thousands of dollars per  episode. And there are lots of working-class content creators behind those shows. Remember, most people in the entertainment industry aren’t millionaires; they’re regular people working paycheck to paycheck, relying on a steady stream of work from networks and studios to pay their bills. It’s easy to think of the producers and directors and say “who cares?” But the people who get hurt first and hardest are the below-the-line talent: the grips, boom operators, location managers, scouts, production assistants, etc. What will happen to those jobs if the networks believe that pouring money into original content is no longer a profitable business model? And if you’re one of the networks, do you want to continue operating in an industry where it’s permissible for competitors to poach your signal and rebroadcast your content without owing you a fee for your trouble?

I don't know what's going to happen, but in a corporate-friendly court like this one, I can see the Supreme Court buying an argument that Aereo’s continued existence will irreparably harm the bottom lines of not just the networks, but the big telecoms like Comcast and Time Warner (soon to be a single world-killing behemoth). I don’t want to see Aereo go down because the use of technology to better peoples' lives is an intrinsic part of the American ethos. But I also don’t want to see a wholesale dismantling of the entire entertainment industry (alarmist I know, but still possible).

I’ll update this post with some thoughts after Tuesday’s oral arguments. In the meantime, I’m going to stick with my cable hook up, and I’ll tell my friend to  start budgeting for cable again if Aereo goes down the poop chute.

Protecting The Brand: Katherine Heigl Sues Duane Reade To Protect Her Publicity Rights

Katherine Heigl has never been a lovable celebrity. Throughout her career, she's bad-mouthed her projects and coworkers to such a degree that Hollywood and the public have largely turned on her. Some have even dubbed her "Hollywood's Most Hated Actress." Lately, it appears she's taken a page out of Sheryl Sandberg's playbook and is leaning in to that title; last week she sued NY-based drugstore chain Duane Reade for $6 million after they tweeted a picture of her leaving one of their stores after shopping there. If she wins, she plans to donate that money to charity... her own charity.

To be sure, this lawsuit isn't going to win her any fans. But then it's not really designed to; it's designed to protect her publicity rights. And using that as a guidepost, Ms. Heigl may actually have a point. Here's the tweet in question:

Heigl Tweet

Heigl's complaint alleges violations of the Lanham Act (the law governing trademarks) as well as New York Civil Rights Laws Sections 50 and 51 (which govern privacy). I'm not going to address the trademark issue here because she would have to prove that Duane Reade's use of her picture would likely confuse the public into assuming she was affiliated with Duane Reade. I just don't think the facts are compelling enough to make that claim (the average person will not conflate shopping at a store with endorsement of it). As I see it, this case is more likely to turn on the privacy issue anyhow.

Section 50 of the NY Civil Statutes says that:

A person, firm or corporation that uses for advertising purposes, or for the purposes of trade, the name, portrait or picture of any living person without having first obtained the written consent of such person, or if a minor of his or her parent or guardian, is guilty of a misdemeanor.

That kind of says it all, doesn't it? The image of a person (famous or not) cannot be used in advertising without their consent - which Ms. Heigl obviously did not give. In common law, this would be referred to as "appropriation of likeness" which is considered one of four privacy rights. So does the tweet count as advertising? Based on the nature of the tweet and the wording, I think a convincing argument can be made. After all, why would Duane Reade tweet that picture if there wasn't a business motive behind it? It's not like the picture was taken by an awe-struck fan... the picture was taken by a paparazzo which was then used by a corporation whose message on Twitter and Facebook was clearly that "Ms. Heigl is a patron of our stores."

Even still, this infraction seems relatively harmless... certainly not worthy of $6 million of Heigl's wrath. And it does raise some questions about the nature of publicity rights as used by celebrities. On the one hand, social media has made it difficult for people to know where the line is between advertising and simply pointing out "here's a celebrity!" While I think the tweet counts as advertising, I could be convinced otherwise with some clever lawyering. There are also First Amendment questions at stake - can a corporation never tweet a picture of a famous patron? Is such a tweet automatically advertising by its nature? And would banning those types of tweets violate the right to free speech? On the other hand, celebrities rely on their images to get work, and having that image appropriated for a use they never approved could result in a loss of work or even ruin business relationships (e.g. what if Ms. Heigl just worked out a deal to be a spokesperson for CVS? The tweet of her shopping at a competing drugstore could destroy that deal).

I know, I know. It's hard to care about how Duane Reade's tweet may negatively impact Ms. Heigl. That's the level of damage she's done to her personal brand. And this lawsuit, however justified, doesn't do anything to help her image. For her sake, I hope she realizes that legal protection of a brand is not the same thing as public protection. The former is fine, but if she wants to continue acting, it will be crucial for her to work on the latter.