When the case of American Broadcasting Cos. v. Aereo comes before the Supreme Court in April, it will feature two American archetypes in a battle that could upend the television industry.
In one corner will be broadcast networks like ABC, NBC and CBS, powerful companies that have been fixtures in American living rooms for decades, and the conduit for collective national experiences like presidential elections, walks on the moon and the Super Bowl.
In the other corner is Chet Kanojia, a 43-year old immigrant from India, who as an outsider saw a system that most took for granted and who knew he could build a better mousetrap, or at least a different one. Aereo, Kanojia’s 2-year-old company, has figured out how to grab over-the-air television signals and stream them to subscribers on the Internet. It is an invention that could topple titans.
The titans know it. Intent on maintaining a system that provides billions in revenue annually, the networks have been fighting Aereo in court almost since its inception, claiming the service was stealing their content. This month, the Supreme Court agreed to hear the case.
Its decision will have far-reaching implications for a television industry already in upheaval, facing challenges from online streaming, Internet-enabled TVs, ad-skipping devices and, now, the tiny antennas that Aereo uses to capture broadcast signals.
The man at the centre of this movement is Kanojia, a self-described “back bencher” in his youth, who spent too much time smoking and drinking and too little time studying in his hometown Bhopal. Now he has transformed himself into a long-distance runner and workaholic pursuing what he describes as a simple ambition: improving the world through technology.
He says he is positive the Supreme Court will rule in his favor.
“I can’t imagine they won’t be on the side of innovation,” he says, “cloud-based innovation in particular because it is so consumer-friendly.”
Kanojia does not fit the profile of a poor immigrant boot-strapper. He grew up in an upper-middle-class household in Bhopal where his parents were so conscious of his future that they largely spoke English instead of the native Urdu. After earning an undergraduate degree in mechanical engineering in India, he came to the United States and earned a master’s in computer systems engineering from Northeastern University.
He counts among his favourite music Fleetwood Mac and “angsty indie pop from the 1980s” like the Cure, and has integrated so seamlessly into life here that his American-born wife jokes “you were never Indian.”
Yet he says that when it comes to embracing American values like freedom of expression, he is perhaps “way more American than most Americans.”
His aspirations are idealistic and democratic, as well. Aereo, he says, is not so much about making money – after all he made plenty after he sold his first company, Navic Systems, which made software that helped cable companies interact with their customers, to Microsoft in 2008 for a reported $250 million.
“This is the first battle ground for the next 50 years of how copyright is going to extend or apply to the Internet and the cloud,” he said in a recent interview at Aereo’s cramped headquarters in New York.
The implication for consumers and for control of content has companies across Silicon Valley lining up to file amicus briefs for his side, he said.
Content companies have a decidedly different perspective, of course. For a monthly subscription that starts at $8, Aereo allows subscribers to watch or record broadcast television through the Internet on any device, small or large, no wires or cable boxes required. It does this by assigning each consumer a remote antenna and a DVR.
To entertainment companies, this is cheating. Copyright law lets individuals watch anything they pick up by antennas as long as it is for their private use, but the broadcasters say Aereo’s transmissions constitute a “public performance” that requires Aereo to pay for retransmitting them. Aereo, they claim, is violating copyright and stealing their content.
The networks’ concern goes beyond Aereo. If the streaming service wins in court, networks fear that the cable and satellite companies that currently pay them huge retransmission fees might follow Aereo’s lead, a situation broadcasters say would destroy their bottom line.
Kanojia says that threat is overblown. He says he thinks long-established retransmission fees will not disappear any time soon. After all, some 57 million Americans still get television by antennas, and that has not hurt the networks’ contracts with cable companies. The big content providers will do just fine in the new world, he says; the casualties will be the hundreds of channels that are barely watched but which consumers still have to pay for in their bundle.
“When was the last time anyone watched VH1 Classic?” Kanojia asked. “I can’t even watch them on JetBlue. Yet they get paid a fee every month.”
Kanojia does have a competitive side, which comes out when he discusses the initial idea for Aereo. His years at Navic revealed to him that cable companies were cutting to the bone budgets for technology research and development. It left “a flank wide open,” he said.
He started Aereo with the help of some powerful backers, including the media mogul Barry Diller.
It is completely in character, his friends say, for Kanojia to play down his hand. Ask, for instance, about the Union Carbide chemical leak in 1984 that killed thousands in Bhopal, and he will casually mention that he was lucky to have lived upwind. Press harder and it emerges that as a teenager living in the spill’s aftermath, he was responsible for changing oxygen tanks for the dying and would routinely discover dead bodies.
But if it left a dark impression, it does not show. Resilience is a trademark, friends say, as is willpower.
His wife and two children have remained at their home in Newton, Mass. He returns there on weekends to watch hockey games and supervise the engineering aspects of the company, which are still based there. But while in New York for the week, Kanojia sleeps only about four hours a night and rises at dawn to run along the West Side Highway to keep his weight down.
His friends are amused to hear how Kanojia refers to his lackadaisical youth.
“No one who has achieved as much as he has is a slacker,” said Shana Fisher, whose firm High Line Venture Partners was an early investor in Aereo. “He is tremendously understated. That’s his comfort zone.”
They point to the turnaround in his lifestyle and commitment to work, especially Aereo, which he is attacking as if he were not already a millionaire from the first go around.
“He only sleeps two to four hours a night because he feels what’s happening so deeply,” Fisher said. “And he doesn’t ever release that. That is what it takes to build a company, and he has it.”