Aereo Ends Its Fight to Change TV Ecosystem

Company Files For Chapter 11 Bankruptcy

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Aereo CEO Chet Kanojia leaves the Supreme Court following oral arguments earlier this year.
Aereo CEO Chet Kanojia leaves the Supreme Court following oral arguments earlier this year. Credit: Andrew Harrer/Bloomberg

Aereo was introduced in 2012 as an attempt to blow up the TV industry, or at least the traditional pay-TV package. But on Friday, the service, which allowed users stream and record broadcast TV sans a cable or satellite subscription, filed for bankruptcy protection.

"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," Aereo CEO Chet Kanojia wrote in a blog post on the company's website Friday morning.

While Aereo, which was backed by IAC Chairman Barry Diller, didn't succeed in changing the TV ecosystem, Mr. Kanoji said, "we believe that we have played a significant part in pushing the conversation forward, helping force positive change in the industry for consumers."

The suggestion is that Aereo helped build momentum behind recent efforts to build TV-over-the-web services such as that planned by Dish, which will offer small packages than traditional services at lower prices, or CBS's new streaming service for subscribers who don't have cable or satellite.

But networks went to war against Aereo for taking their signals without permission or compensation, seeking injunctions to shut it down while its legality could be ascertained. Although they lost their initial court battles, their appeals eventually reached the Supreme Court. Aereo turned off its service in June, when the Court ruled that the service infringed on networks' copyright, rejecting the company's argument that the individual, remote antennas it rented each subscriber were equivalent to antennas consumers legally bought and used at home.

Aereo looked for other ways to position its business, such as becoming a more traditional pay-TV company, one that negotiated for the right to networks' programming. But it was unable to get the license needed to transmit programs under copyright law.

Last month the Federal Communications Commission circulated a proposed rule change that would allow online video providers such as Aereo to distribute TV like cable services, helping consumers circumvent large packages of channels.

Mr. Kanojia called the action by FCC Chairman Tom Wheeler "an important step."

But any rule change was not coming soon enough. Earlier in the month, Aereo laid off a majority of its employees and shuttered its offices in New York and Boston.

"We feel incredibly lucky to have had the opportunity to build something as meaningful and special as Aereo," Mr. Kanojia wrote Friday. "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."

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