Snuffing the hopes and dreams of cord-cutters everywhere, the Supreme Court effectively killed Internet television service Aereo yesterday. In a 6-3 decision, the Court ruled that Aereo's business of providing broadcast TV to subscribers via the Internet for $8 a month was skirting network retransmission fees. As a result of the ruling, the small number of Aereo users who were managing to avoid average cable bills of over $80 a month in order to watch television broadcast over the air are largely out of luck.
The decision was obviously a triumph for un-diversified broadcast companies. Shares of Sinclair Broadcasting shot up 15% and CBS tacked on 6%. Though Aereo was cagey about providing financial data, their revenues were far less than the $3 billion in market cap added by those two companies alone. At least in Wall Street's eyes, the Supreme Court ruling means less money for you and bigger profits for Sinclair, CBS and other Big Business concerns.
It's easy to vilify execs like CBS CEO Les Moonves, who saw his net worth climb more than $15 million yesterday as he chortled over his victory, but the broadcasting dream team wasn't just traditional big business. Big Bird, the Count and the rest of the gang at PBS were also part of the mass execution of Aereo and consumer choice yesterday.
That's right: The non-profit, tax-payer- and Elmo-toy-funded Public Broadcasting Service contributed to the death of entrepreneurial dreams in favor of broadcasting profits. Why? Probably because they were afraid of CBS and the gang's threat to exercise their nuclear option of going to a full cable TV model. PBS has cable properties as well, and it counts profits and revenues generated there to make cash.
Don't believe what you're reading about this being a long-term victory for consumers. Yesterday was a loss for Internet freedom, start-up companies and just a little chunk of the American dream. Were PBS actually committed to educating your children, the next episode of Sesame Street would be brought to you by the dollar sign and concept of Oligopolistic pricing power.