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Streaming service Aereo files for bankruptcy

Streaming service Aereo said bankruptcy protection will give it a chance to revise its business model without the cost of litigation.

By Frances Burns
The United States Supreme Court is seen from the roof of the Capitol Building in Washington, D.C. on November 18, 2014. UPI/Kevin Dietsch
The United States Supreme Court is seen from the roof of the Capitol Building in Washington, D.C. on November 18, 2014. UPI/Kevin Dietsch | License Photo

BOSTON, Nov. 21 (UPI) -- The streaming service Aereo filed for bankruptcy Friday, following a U.S. Supreme Court decision that it was violating copyright on network TV shows.

Chet Kanojia, Aereo's founder and chief executive officer, said in a statement that the court's decision in June, reversing a ruling by a federal appeals court, had made Aereo's business model difficult to sustain. Aereo allowed subscribers to view over-the-air television broadcasts via the Internet and using a variety of devices.

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"The U.S. Supreme Court decision effectively changed the laws that had governed Aereo's technology, creating regulatory and legal uncertainty," he said. "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."

Kanojia said Chapter 11 protection would give the company time to reorganize its business "without the extensive cost and distraction of defending drawn out litigation in several courts."

Aereo, founded in Boston, shut down its service immediately after the Supreme Court ruling and gave its subscribers refunds. Earlier this month, it cut 43 employees from the payroll.

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"It may be that Aereo is hoping to somehow go through the bankruptcy process and emerge on the other end free of any liabilities to the broadcasters. Whether or not that is possible is unknowable at this point," Bruce Ewing, a New York bankruptcy lawyer, told the Boston Globe.

Kanojia spoke proudly of Aereo's achievements.

"Our engineering team created the first cloud-based, individual antenna and DVR that enabled you to record and watch live television on the device of your choice, all via the Internet. In less than two years, we went from drawings on a napkin to launching Aereo's technology in more than a dozen cities across the country," he said.

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