Aereo is one of the first streaming video companies and has announced that it filed for bankruptcy after being forced to do so by the Supreme Court.
Aereo was launched more than two years ago and it delivered channels to computers and tablets for $8 and $12 per month. The company was backed by Barry Diller, who is co-founder and creator of Fox Broadcasting and it let users store programs on its DVRs that were cloud based. The Aereo service was delivered in 11 American cities.
Aereo’s argument was that every subscriber that has an antenna represents individual viwings of contents was supported by the lower courts, but the Supreme Court ruled the argument 6 to 3, saying that Aereo must pay the broadcasters for the content it was showing.
The CEO of Aereo and co-founded, Chet Kanojia explained in a blog post today the reasons behind his company’s file for bankruptcy:
“The U.S. Supreme Court decision effectively changed the laws that had governed Aereo’s technology, creating regulatory and legal uncertainty. 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.”
Aereo announced earlier this month that it will reduce its staff to a dozen of executive, laying off most of its employees from New York and Boston.
By filing for bankruptcy, also known as the Chapter 11, Aereo CEO said that this way they can:
“maximize the value of its business and assets without the extensive cost and distraction of defending drawn out litigation in several courts.”
Kanojia further explained that his company did everything it could to stay afloat but things didn’t work out as he had planned:
“We believe that we have played a significant part in pushing the conversation forward, helping force positive change in the industry for consumers. We feel incredibly lucky to have had the opportunity to build something as meaningful and special as Aereo. With so many shifts and advances in technology, there has never been a more perfect time to take risks, challenge the status quo and build something special.”