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Therefore, the major threat to SVoD providers, and their more traditional video distributors, lies elsewhere. The culprits: illegal video streaming programs and providers While the illegal downloading of music has declined compared to previous measurements (about a quarter of people who use music streaming services still download music illegally, compared to 32 percent in September 2014), 35 percent of people who use SVoD services are still downloading movies and TV series illegally. This is according to the study Trends in Digital Entertainment, from January 2015, which is generated by GfK and appears once per quarter. Some illegal SVoD providers are alive and kicking such as Time4popcorn. They offer SVoD services to members of the public, on the internet, without having paid proper and agreed licensing royalties to the owners of the rights in the video content which is being streamed on their channels.
One of these illegal SVoD providers was Aereo.com, which filed for Chapter 11 reorganization proceedings in November 2014. In June 2014, the US Federal Supreme Court handed down a decision in ABC v Aereo.
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Aereo, a TV-over-the-internet service, had introduced a disruptive business model, using thousands of very small antennas stored in a warehouse, to live stream broadcast signals which they had encoded into packets, directly into the home of users. It was sued by the broadcasters (originally including 21st Century Fox, CBS, NBC and ABC) for infringement of their copyright in public performance. Aereo defended its actions claiming that all it did was to provide a device to watch a program that was already available. The Supreme Court decided in favor of the broadcasters, ruling that Aereo and its cloud-based technology was too similar to a traditional cable company to say that its service did not infringe.
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The failed watch-TV-on-the-Internet startup Aereo.com may come back though, since TiVo bought its trademarks, domain names and customer list at auction, for the bargain price of USD1 million in March 2015. TiVo could be looking into offering an Aereo-like service but one that is licensed by TV networks [5]. During the AIPPI Congress in September 2014, Elizabeth Valentina, Vice President Content Protection for Fox Entertainment Group, (speaking on her own behalf as Fox was still litigating the case), pointed out that Aereo's business model involved the streaming of broadcast content obtained without permission , authorization or license, and for which service Aereo were charging their subscribers. This business model was harmful that of the broadcasters and content owners, by devaluing their content, interfering with exclusive transactions for content to be delivered over the internet and to mobile devices, as well as diverting eyeballs from TV advertising revenue.
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It was a harm clearly recognized by Judge Nathan at first instance, in the broadcasters' motion for a preliminary injunction. During the same congress, Sanna Wolk (Associate Professor at University of Uppsala, Sweden and co-chair of AIPPI's copyright committee) compared the US position with that adopted in the EU where the CJEU in March 2013 ruled that online near-live streaming by the UK Company, TV Catchup, was an unauthorized "communication to the public" within the meaning of Article 3 (1) of Directive 2001/29 (InfoSoc Directive) and therefore an actionable infringement of copyright. The CJEU concluded that as TV Catchup was making the works in the original "terrestrial" TV broadcast available over the internet, and since using different technical means to retransmit the broadcast, this retransmission was a "communication" within the meaning of the Article 3 ( 1). Furthermore in the circumstances the court did not have to consider whether communication was to a " public", as the transmission required an individual and separate authorization from the copyright owners.
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