Internet TV startup Aereo files for Chapter 11 banktuptcy

Following an unfavorable U.S. Supreme Court ruling that sided with TV networks, startup Internet company Aereo said Friday it has filed for Chapter 11 bankruptcy.

“The U.S. Supreme Court decision effectively changed the laws that had governed Aereo’s technology, creating regulatory and legal uncertainty,” CEO Chet Kanojia said in a statement on the company’s homepage. “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.”

Nearly five months ago, the justices ruled that the online streaming service, which enabled users to watch live broadcast television programming through portable devices, such as tablets, laptops and smartphones, violated copyright law. The ruling required Aereo to pay licensing fees for transmitting programming from broadcast networks, including ABC, NBC and Fox.

Kanojia had told Bloomberg that Aereo didn’t have a contingency plan should the Supreme Court side with broadcasters. The bankruptcy, Kanojia said recently, would allow the company to maximize the value of its business “without the extensive cost and distraction of defending drawn-out litigation in several courts.”

When it launched in 2012, Aereo offered an alternative for cord cutters who didn’t own a TV or pay for cable:

“Aereo represented a future where we can divorce ourselves from the cable TV model that forces us to pay for a bunch of stuff we don’t want to watch,” Business Insider said. “Instead, the long-term promise of Aereo was a system where TV networks could unbundle themselves from cable and let you subscribe to what you want individually.”

Although Aereo is no longer a threat to the traditional broadcast model, a tide has turned in the entertainment world. In October, HBO and CBS announced similar cord-cutting options that would make previously subscription-only content available on stand-alone online streaming services in 2015.