BETAMAX Case Transported to the 21st Century in Aereo

The name BETAMAX conjures up memories of the 80's, but it should also make you think of Netflix, video rentals, your DVR or TiVo, and cloud storage.  Without the BETAMAX case in the 1980's, no recording devices would have been allowed and viewers would have never have had the opportunity to enjoy time-shifting and watching programs on their own schedule.  Now SCOTUS is considering a case that brings the argument into the 21st Century.

In the 1980's, Sony was sued by Universal and Disney to block production of BETAMAX recording devices.  BETAMAX, for those of you under 30, was a rival technology to the VCR (which eventually became the standard) that allowed users to record shows broadcast on TV or cable or satellite so that users could watch them when they wanted.

Universal and Disney were arguing that copyright protections would be eroded forever and that Fair Use (sampling an 80's song for a new rap song, for example) would be expanded beyond recognition.

The Supreme Court (SCOTUS) ultimately held that people could record portions of a show or the entire show so long as their intent was to watch the program later.  Second, people could even resell or rent recordings of programs to others for profit so long as the recording has a substantial, legitimate use (i.e. was aired on free broadcasting channels, not cable).

We are all used to the first holding, but the second holding might be new to you.  Expect the second part to hit the news as SCOTUS is now considering the Aereo case, the first major case since BETAMAX to examine the boundaries of time-shifting programming.

Aereo has created technology that uses a system of small antennas in an urban area to take live programming offered over the air by local broadcasters and stream it to subscribers who pay Aereo a fee for the service.  Aereo's target customers are those who have cancelled cable and satellite and who use Netflix, Hulu, iTunes, Apple TV, and the other myriad Internet-based programming solutions.  With Aereo, a person could watch live sports (think the Big Game for the NFL or March Madness) without paying for cable or satellite.

Aereo argues that it is simply a super-charged "rabbit ears" (back in the dark ages, people used antennas to watch TV, kids).  Broadcasters are arguing that their creative content (and copyrights) are being infringed upon.  Broadcasters also want use fees from the transmissions like they receive from cable and satellite providers.

If Aereo's argument prevails, broadcasters like FOX & CBS have threatened to move to cable, so this case has far-reaching implications.