MIT Technology Review

Monday, April 01, 2013

A Roller Coaster Day for Copyright Law

A federal appeals court rules for Aereo, the service that could encourage more people to cut the cord on their TV packages.

Two controversial startups I’ve covered, Aereo and ReDigi, had cleverly designed their technology to challenge digital copyright laws. Promptly sued by TV networks and the record industry respectively, both had a day in court this week. One has survived to fight another day. The other may not.

Aereo allows subscribers to stream live broadcast programming on the Internet without paying programmers or networks (see “Watch Out for the Startup Using Tiny Antennas to Show the Oscars on an iPhone”). A federal appeals court today ruled in Aereo’s favor and refused TV networks’ request to shut down the service, which uses thousands of antennas to capture over-the-air broadcast signals and then transmits the content online. The New York City company is now expanding in 22 cities in the U.S.

ReDigi’s technology, on the other hand, is all about the files individuals’ have already purchased. It had created a marketplace where people could re-sell their legally-purchased iTunes files, and was hoping to expand to other media, such as e-books or video (see “A Startup Asks: Why Can’t You Resell Old Digital Songs?”). With protections to attempt to ensure that a digital file wasn’t endlessly copied, ReDigi argued that, legally, its “used” digital music store was no different than a used record store stocked with CDs and tapes.

Today, a federal court disagreed with ReDigi. Its ruling of copyright infringement will likely shut the company down and could dampen apparent interest from Amazon in creating this kind of marketplace. Now, all those dusty music files that I never listen to anymore are definitely almost worthless.

The rulings are unrelated, but together illustrate how quickly media business models will continue to change, especially as more people chose to stream their TV shows, music, and movies online. Both Aereo’s victory and ReDigi’s defeat could accelerate this trend.