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TV Antenna Visionary Aereo Bankrupt

It’s a sad day for cord cutters.  Just weeks after closing its New York and Boston offices, as TV antenna visionary Aereo has filed for chapter 11 Bankruptcy.  Aereo launched its innovative services in 2012, which leased subscribers an individual TV antenna at a remote location.

The individual TV antenna allowed Aereo’s customers to watch live broadcasts over the internet. The service would also record from the TV antenna for later viewing, much like a DVR service.

The company immediately came under legal challenges from major TV networks for retransmitting broadcasts, even though each subscriber was leased and assigned an individual TV antenna.

The company won early cases, but eventually lost its 2 year battle when the U.S. Supreme Court ruled that Aereo’s services were in breach of US copyright laws on June 25th of this year.

The company attempted to overcome the ruling, arguing that they were entitled to a mandatory copyright license, as the Supreme Court indicated they were indistinguishable from a cable company.  (Cable companies are entitled to a copyright license under the 1992 Cable Television Consumer Protection and Competition Act)

The U.S. copyright office disagreed, denying Aereo the license and leaving the company in a limbo status.  There was hope the FCC would change rules allowing Aereo to operate under the same classification as cable systems. However, that decision has been delayed until next year.

The company published the following letter to its consumers on its website.

A little over three years ago, the team at Aereo set out to build a better television experience for the consumer. We began this journey because we were frustrated with a system that we believed was broken and no longer served the consumer. When it came to watching live television, the options were few, the products available were cumbersome and didn’t fit our increasingly mobile lifestyle, and costs were unreasonably high and rising.

With that in mind, we put our collective engineering power to work to create an online technology that was simple, useful, and compelling, and provided consumers with a true alternative to how they watch local live TV. That’s how Aereo came to life.

Our engineering team created the first cloud-based, individual antenna and DVR that enabled you to record and watch live television on the device of your choice, all via the Internet. In less than two years, we went from drawings on a napkin to launching Aereo’s technology in more than a dozen cities across the country.

The enthusiasm we encountered was overwhelming. The sense of frustration consumers expressed reinforced our mission. We knew we had touched a nerve, had created something special, and had a built something meaningful for consumers.

But we encountered significant challenges from the incumbent media companies.

While we had significant victories in the federal district courts in New York and Boston and the Second Circuit Court of Appeals, the reversal of the Second Circuit decision in June by the U.S. Supreme Court has proven difficult to overcome. The U.S. Supreme Court decision effectively changed the laws that had governed Aereo’s technology, creating regulatory and legal uncertainty. And while our team has focused its energies on exploring every path forward available to us, without that clarity, the challenges have proven too difficult to overcome.

Accordingly, today, we filed for Chapter 11 reorganization proceedings. We also appointed Lawton Bloom of Argus to serve as Aereo’s Chief Restructuring Officer during this period.

Chapter 11 will permit Aereo to maximize the value of its business and assets without the extensive cost and distraction of defending drawn out litigation in several courts.

We have traveled a long and challenging road. We stayed true to our mission and we believe that we have played a significant part in pushing the conversation forward, helping force positive change in the industry for consumers.

We feel incredibly lucky to have had the opportunity to build something as meaningful and special as Aereo. With so many shifts and advances in technology, there has never been a more perfect time to take risks, challenge the status quo and build something special.

Thank you for all of your support. Your emails, tweets, Facebook posts and letters have meant the world to us. We are incredibly grateful to have gone on this journey together.

The letter is entitled “The Next Chapter”, which leads us to believe we haven’t heard the last from the people at Aereo. So until that hopeful time: Farewell Aereo, you will be missed.

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