Aereo tells customers it has filed for Chapter 11 reorganization
Decision comes months after Supreme Court ruling against the company’s right to lease antennas to customers in order to time shift television broadcasts
The television company Aereo today posted a letter to its customers telling them that the company has filed for Chapter 11 reorganization proceedings. The move follows a damaging Supreme Court decision which effectively cut off their business model at the knees.
Aereo’s business is to lease their customers an individual remote antenna, which allows subscribers to view live broadcast television programming and to record the broadcasts for later viewing. The major networks, which broadcast their programming over the air for free to anyone with an antenna, nonetheless get a major share of their revenue from rebroadcast rights from cable companies. This networks saw Boston-based Aereo as a threat to this revenue stream, as did the cable companies that essentially have a monopoly on the programming.
“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,” Chaitanya Kanojia, Aereo’s CEO wrote online. “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.”
“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,” Kanojia wrote.
“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.”