Originally posted 2014-10-26 19:37:31. Republished by Blog Post Promoter
Familiarity of the reader with Part One is presumed.
As I read the Second Circuit decision, I was pleasedâ€”for reasons I canâ€™t quite, and wonâ€™t bother trying to, articulateâ€”that the appellate court was affirming the denial of a preliminary injunction in part, at least, because the granting of the injunction would probably have â€œseverely harm[ed] Aereo, likely ending its business.â€
Yet I was at the same time bothered by something I couldnâ€™t quite put my finger on, until I did, and it was nothing other than the acknowledgment by the Second Circuit (immediately preceding the one just quoted) that â€œthe [district] court concluded that the Plaintiffs had demonstrated a likelihood that they would suffer irreparable harm in the absence of a preliminary injunction.â€ Which means, of course, that right nowâ€”and since March 14, 2012, when Aereo began providing its service to subscribers… and through tomorrow, and the day after, and the day after that… until such time as the plaintiffs prevail in the two lawsuits pending in the Southern District of New York (and are awarded a permanent injunction), an eventuality Judge Nathan has deemed unlikely as a matter of law, which ruling the Second Circuit has affirmed… the plaintiffs, every broadcast network in New York City, are being irreparably harmed.
How, exactly? The appellate decision doesnâ€™t discuss the harms to the plaintiffs, because it doesnâ€™t need to. The Second Circuit agreed that the plaintiffs â€œare not likely to prevail on the merits,â€ so its discussion of the harms claimed by each side of the dispute are minimal. â€œPlaintiffs do argue that any harm suffered by Aereo should be disregarded in the balance of hardships analysis because Aereoâ€™s business is illegal,â€ the Second Circuit decision reads, â€œ…[b]ut this argument hinges on the conclusion that Aereoâ€™s business infringes the Plaintiffâ€™s copyrights,â€ which the court concluded it does not, at least â€œon the limited question before us… whether Aereoâ€™s transmission of unique copies of recorded programs to the Aereo users who directed that they be created are public performances.â€ So we must seek our answer elsewhere. Perhaps in the district court opinion.
But before we look there, letâ€™s think about this like regular folks. Regular folks donâ€™t read court opinions. Regular folks ask whether something feels right or wrong. And this feels at once both right and wrong.
Imagine that you live in New York City. As a NYC resident, when youâ€™re not at a Yankees game or ice skating at Rockefeller Center or having lunch with, say, Michael Bloomberg at Rayâ€™s Famous Original Rayâ€™s Pizza, you might watch some broadcast television, which you donâ€™t pay for, since you have an antenna attached to your top-of-the-line widescreen HD set in your 350-square-foot studio apartment that you share with a roommate and a cat. But when you get home from your pizza date your roommate and his girlfriend and her friend are using the TV to play video games (only ironically, though)… but youâ€™re not out of luck, since youâ€™re an Aereo subscriber! So you take your iPad to your freecycled futon in your corner of the room and you log in and request that the new episode of whatever show everybody likes thatâ€™s playing right now be streamed to your Internet-capable device.
Whereâ€™s the harm in that? Youâ€™re merely getting delivered to your tablet the free content that you would have watched on your television. Yes, youâ€™re paying a third party for the convenience, but that convenience is not offered by the network anyway, so youâ€™re not depriving itâ€”or anyoneâ€”of revenue. Youâ€™re paying money you wouldnâ€™t pay if you just watched network television on a television, but that doesnâ€™t mean that you should be paying that money to the network.
But there is other, different harm to be suffered by the plaintiffs, potentially anyway, and the district court indeed acknowledged it, albeit only starting on page 38 of the 52-page decision. “Plaintiffs have indicated that they are likely to seek interlocutory appeal to the Second Circuit,” Judge Nathan wrote (and they sure did). “Accordingly, the Court will set forth its analysis of the remaining factors [considered on a motion for preliminary injunction] to ensure that the record is fully developed.”
The second… factor is whether Plaintiffs will suffer irreparable harm in the absence of an injunction…. The Court may not presume irreparable harm, but rather must consider the injury Plaintiffs will suffer if they lose on the preliminary injunction [motion] but ultimately prevail on the merits.â€ The Plaintiffs, Judge Nathan found, “have identified a number of categories of irreparable harm”:
First, Aereo will damage Plaintiff’s ability to negotiate with advertisers by siphoning viewers from traditional distribution channels, in which viewership is measured by Nielsen ratings, into Aereoâ€™s service which is not measured by Nielsen, artificially lowering these ratings.â€ Huh. That… that actually makes sense. â€œThe record establishes the importance of Nielsen ratings to Plaintiffs’ ability to negotiate with advertisers to monetize their programming, as well as the importance of such advertising revenue.â€ Indeed, in the simplest terms: You don’t pay for broadcast television because advertisers pay to sell you things on broadcast television, which you get for free. So if it appears that you’re not watching broadcast television — even if you are — then advertisers aren’t going to pay to advertise during shows you aren’t watching, even if you are. (Of course, none of this takes into consideration that anyone watching television the old-fashioned way can always get up from the couch during commercials, but that’s never/always been taken into account.)
Second — and, really, this probably should have been first — the evidence shows that by poaching viewers from cable or other companies that license Plaintiff’s content, Aereo’s activities will damage Plaintiffsâ€™ ability to negotiate retransmission agreements, as these companies will demand concessions from Plaintiffs to make up for this decrease in viewership” Indeed, Aereo’s CEO explained to the court that â€œpart of the idea behind Aereo was to allow consumers to bypass cable companies to watch broadcast television/”
That’s a terrific idea, in this writer’s opinion. At my home (outside NYC, but just), we have a basic cable setup, but only because we were getting lousy antenna reception. So the opportunity to ditch our cable service but still get broadcast programmingâ€”and in fact get it on our two MacBooks, two iPads, and two iPhones (most of which we can connect to our widescreen HD television set) is very attractive, and something we might look into before Congress shuts this whole thing down or Fox pulls its own plug.
Harking back to my suggestion that the Plaintiffs must be suffering irreparable harm right now, as I write this, as you read it… well, that’s not entirely true. â€œThe Court does not… believe” Judge Nathan wrote, â€œthat Plaintiffs will suffer the full magnitude of their claimed irreparable harm during the pendency of this litigation.â€ But thatâ€™s okay. Because, after all, the plaintiffs are unlikely to prevail on the merits of their claims anyway.