Suppose I could offer you a choice of two technologies for watching TV online. Behind Door Number One sits a free-to-watch service that uses off-the-shelf technology and that buffers just enough of each show to put the live stream on the Internet. Behind Door Number Two lies a subscription service that requires custom-designed hardware and makes dozens of copies of each show. Which sounds easier to build—and to use? More importantly, which is more likely to be legal?

If you went with Door Number One, then you are a sane person, untainted by the depravity of modern copyright law. But you are also wrong. The company behind Door Number One, iCraveTV, was enjoined out of existence a decade ago. The company behind Door Number Two, Aereo, just survived its first round in court and is still going strong.

And once again, it's a business model that would not exist in a world with copyright policy that was not demonstrably insane. Rapidly spinning optical discs make sense as a distribution technology because they're compact and durable. But they're a hassle and a half for playback, because they scratch, skip, and make random access a pain. If you're going to use the Internet for distribution, better to take the DVDs out of the picture and use them as coasters. But since Cablevision had opened up what seemed like a gap in copyright law, Zediva poured shiny lacquered discs into the breach.

Perhaps we can think about the problem of copyright on the Internet another way. Instead of asking which back-end technologies are legal, it might make more sense to ask what it is legal for users to do with computers on the front end. This approach would let people spend less time worrying about the exact definitions of "reproduction" and "performance" and more time thinking about users' rights, especially under fair use.

Cablevision itself illustrates what might have been. The whole point of the RS-DVR was that it was a perfect substitute for a home DVR. Reasoning by analogy, then, we might say that the two ought to either both be legal or both be illegal. And since home DVRs seem here to stay, it ought to be permissible for Cablevision to offer its customers exactly the same service they could have gotten by buying a gizmo. Call it "noninfringing personal fair use" and we can all go home.

Despite this creative attempt to escape from the express holding of Cablevision, for the reasons discussed below this Court finds itself constrained to reject the approach Plaintiffs urge. Contrary to Plaintiffs' arguments, the copies Aereo's system creates are not materially distinguishable from those in Cablevision, which found that the transmission was made from those copies rather than from the incoming signal. Moreover, Plaintiffs' attempt to distinguish Cablevision based on time-shifting fails when confronted with the reasoning of that case, particularly considering that the Second Circuit's analysis was directly focused on the significance of Cablevision' s copies but did not say one word to suggest that time-shifting played any part in its holding.

• First up, we've got the ivi case, which may seem like the most similar in terms of offerings, but may actually be the least similar in terms of legal issues. ivi also offered (for a subscription fee) access to over the air broadcast channels via the internet. However, the method and legal arguments were somewhat different. ivi tried to mainly rely on Section 111 of Copyright law, which was what established a compulsory licensing system for cable systems to retransmit network television. Thus, it tried to argue that it was the equivalent of a cable system, and could get by with the compulsory rates.
  
  So far, it hasn't fared well in court. While the products are similar to the end consumer here, the method and legal arguments are pretty different. For what it's worth, the lawsuit against Aereo was filed in the same court as the one against ivi.



• The second case is the Zediva case. This one is actually much closer legally to Aereo, even if the products are somewhat different. Zediva worked by having a bunch of network-enabled DVD players in a data center. If you wanted to "rent a movie" online, you could do so, and a physical DVD would be put into a physical DVD player and streamed to you online. Zediva legally purchased the DVDs and argued that this was really no different than having a DVD player next to the TV. It's just that the cable is much longer. The similarities to Aereo are pretty obvious. Both involve a separate physical device at a central location being assigned to an end-user, and then content streaming from that device.
  
  Unfortunately for Aereo, Zediva has also not fared well in court -- a ruling that does not bode well at all for Aereo. The most troubling part of the Zediva ruling was that watching a DVD in your own private home, even if it was solely being streamed to you direct from a DVD player that only you could access for the duration of the movie, was considered a public performance. This seems like a pretty ridiculous reading of the law to some of us, but if the court in the Aereo case reads the law the same way, Aereo is sunk. The only slight ray of hope here may be that the Zediva case was in the Central District of California, rather than the Southern District of NY where the Aereo case is (and the ivi case was as well).



• The other "ray of hope" comes from the Cablevision ruling, which noted that a hosted DVR device could be legal and non-infringing, though it involved a horribly convoluted legal argument for the court to reach the conclusion it wanted, focusing on the legality of fleeting buffer copies. This is a ruling that the industry would love to kill off if it could. The good news here, beyond the nature of the ruling, is that this ruling came in the 2nd Circuit appeals court, which is precedent setting for the Southern District of NY where the Aereo case is taking place. It's not a direct comparison, but this ruling could conceivably help in at least one key part of the case.

Aereo does not believe that the broadcasters’ position has any merit and it very much looks forward to a full and fair airing of the issues.

Consumers are legally entitled to access broadcast television via an antenna and they are entitled to record television content for their personal use. Innovations in technology over time, from digital signals to Digital Video Recorders (“DVRs”), have made access to television easier and better for consumers. Aereo provides technology that enables consumers to use their cloud DVR and their remote antenna to record and watch the broadcast television signal to which they are entitled anywhere they are, whether on a phone, a tablet, a television or a laptop.

On Thursday, attorneys for the movie studio asked Judge Walter to consider publishing his injunction order in the Federal Register so that other judges around the nation currently overseeing Internet copyright cases would have the benefit of seeing what they believe to be an astute analysis of the "transmit" clause in the Copyright Act and what it means for Internet streaming transmissions to be "to the public" under the clause. The plaintiffs also say they would be more than happy to submit the judge's opinion on his behalf to the Westlaw database.

[6] Each store contains a small showroom area in the front of the store, and a "showcase" or exhibition area in the rear. The front showroom contains video equipment and materials for sale or rent, as well as dispensing machines for popcorn and carbonated beverages. Movie posters are also displayed in this front area. In the rear "showcase" area, patrons may view any of an assortment of video cassettes in small, private booths with space for two to four people. There are a total of eighty-five booths in the two stores. Each booth or room is approximately four feet by six feet and is carpeted on the floor and walls. In the front there is a nineteen inch color television and an upholstered bench in the back.

[7] The procedure followed by a patron wishing to utilize one of the viewing booths or rooms is the same at both facilities. The customer selects a film from a catalogue which contains the titles of available films. The fee charged by Maxwell's depends on the number of people in the viewing room, and the time of day. The price is $5.00 for one or two people before 6 p.m., and $6.00 for two people after 6 p.m. There is at all times a $1.00 surcharge for the third and fourth person. The fee also entitles patrons to help themselves to popcorn and soft drinks before entering their assigned rooms. Closing the door of the viewing room activates a signal in the counter area at the front of the store. An employee of Maxwell's then places the cassette of the motion picture chosen by the viewer into one of the video cassette machines in the front of the store and the picture is transmitted to the patron's viewing room. The viewer may adjust the light in the room, as well as the volume, brightness, and color levels on the television set.

[8] Access to each room is limited to the individuals who rent it as a group. Although no restriction is placed on the composition of a group, strangers are not grouped in order to fill a particular room to capacity. Maxwell's is open to any member of the public who wishes to utilize its facilities or services.

"a performance made available by transmission to the public at large is `public' even though the recipients are not gathered in a single place. . . . The same principles apply whenever the potential recipients of the transmission represent a limited segment of the public, such as the occupants of hotel rooms . . . ." House Report, supra, at 64-65, U.S.Code Cong. & Admin.News, p. 5678. Thus, the transmission of a performance to members of the public, even in private settings such as hotel rooms or Maxwell's viewing rooms, constitutes a public performance. As the statutory language and legislative history clearly indicate, the fact that members of the public view the performance at different times does not alter this legal consequence.

In essence, the defendants' "first sale" argument is merely another aspect of their argument that their activities are not public performances. For the defendants' argument to succeed, we would have to adopt their characterization of the "showcasing" transaction or activity as an "in-store rental." The facts do not permit such a finding or conclusion. The record clearly demonstrates that showcasing a video cassette at Maxwell's is a significantly different transaction than leasing a tape for home use. Maxwell's never disposed of the tapes in its showcasing operations, nor did the tapes ever leave the store. At all times, Maxwell's maintained physical dominion and control over the tapes. Its employees actually played the cassettes on its machines. The charges or fees received for viewing the cassettes at Maxwell's facilities are analytically indistinguishable from admission fees paid by patrons to gain admission to any public theater. Plainly, in their showcasing operation, the appellants do not sell, rent, or otherwise dispose of the video cassette. On the facts presented, Maxwell's "showcasing" operation is a public performance, which, as a matter of law, constitutes a copyright infringement.

Customers watching one of Plaintiffs’ Copyrighted Works on their computer through Zediva’s system are not necessarily watching it in a “public place,” but those customers are nonetheless members of “the public.” .... The non-public nature of the place of the performance has no bearing on whether or not those who enjoy the performance constitute “the public” under the transmit clause.

Under the facts of that case, the Second Circuit found that the transmissions were not “to the public” because “each RS-DVR playback transmission is made to a single subscriber using a single unique copy produced by that subscriber.” Id. at 138. (“Given that each RS-DVR transmission is made to a given subscriber using a copy made by that subscriber, we conclude that such a transmission is not ‘to the public.’”). In this case, unlike Cablevision, Defendants’ customers do not produce their own unique copy of Plaintiffs’ Copyrighted Works. Instead, like On Command and Red Horne, the same DVD is used over and over again to transmit performances of Plaintiffs’ Copyrighted Works. As the Second Circuit held in Cablevision, while “neither the Red Horne court nor Prof. Nimmer explicitly explains why the use of a distinct copy affects the transmit clause inquiry,” its “independent analysis confirms the soundness of their intuition: the use of a unique copy may limit the potential audience of a transmission and is therefore relevant to whether that transmission is made ‘to the public.’”

So while the system to get round the usual studio imposed release window nonsense is quite clever, it is also ridiculously old fashioned. It's 2011 and we’re relying on physical DVDs and DVD players? Getting messages that someone else has rented the movie needed already?

These problems were largely solved a decade ago and any torrent, streaming, or decent file-hosting site today can provide a better service than this in the blink of an eye.

Except Hollywood won't let them, legally at least.