Aereo Settles for $950K Broadcaster Payout on $99M Damages Claim
Another milestone in the sad tale of Aereo: The failed startup has agreed to pay CBS, NBC, ABC, Fox, Telemundo. and other broadcasters less than $1 million in damages. While the broadcasters had asked for $99 million, they settled for $950,000. This leaves Aereo with $811,000, which it will use to pay non-broadcaster creditors and legal fees.
Back when it was in business, Aereo streamed local broadcast channels to subscribers, capturing that content with small personal antennas. After a handful of legal victories, the Supreme Court handed Aereo a defeat in June, 2014. Aereo filed for bankruptcy in November 2014, and its assets raised a scant $2 million at auction in February.
This payout agreement will settle all litigation between Aereo and the broadcasters that brought it down. Aereo had filed a lawsuit accusing the broadcasters of intentionally damaging its asset auction, but that will be dismissed as part of this settlement.
A hearing before a U.S. bankruptcy judge, scheduled for May 7, will approve the settlement.
TiVo purchased the Aereo trademark and customer list at the asset auction, and it recently put the list to use. A few days ago it mailed a special offer to Aereo customers offering them a deal on a four-tuner Roamio OTA DVR.
A loophole in copyright law says that nonprofits can retransmit broadcast content without a license, so this startup is a nonprofit.
Noting how disruptive the ruling would be to the broadcast industry, the judge put the ruling on hold pending an appeal.
The startup's creditors and investors can't be happy: Aereo's bankruptcy auction pulls in far less that the $4 million it was hoping for.
The Barry Diller-backed startup is being sold for parts, with its streaming video technology going to the highest bidders.
The streaming service looks to the courts to help it move past lawsuits and debts, and focus on a new strategy.