Roger Yu and Mike Snider, USA TODAY 3:20 p.m. EDT June 25, 2014



Aereo CEO Chet Kanojia(Photo: Alex Wong, Getty Images)


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Fans of streaming prime-time network TV live will have to wait a bit longer.

In a 6-3 decision, the U.S. Supreme Court ruled Wednesday that Aereo, a start-up backed by media mogul Barry Diller, violated the copyrighted work of major TV networks by streaming their content to paid subscribers.

Each subscriber leases a small Aereo antenna that's stored in the company's warehouse, a point that Aereo emphasizes in differentiating its service from other streaming companies. The service has been available in 11 markets.

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The antenna receives the TV signal and transforms it into data that can be streamed. Subscribers can stream or record content through Aereo's website. Subscription fees range from $1 a day to $80 a year.

"It's not a big [financial] loss for us, but I do believe blocking this technology is a big loss for consumers, and beyond that, I only salute Aereo CEO and founder Chet Kanojia and his band of Aereo'lers for fighting the good fight," Diller told CNBC.

Here are some questions to consider as fans and opponents of Aereo chew on the ruling:

Q: Who are the winners?

Primarily, the major TV network owners Disney (ABC), CBS Inc., Comcast (NBC) and 21st Century Fox (Fox) which have argued in court that Aereo is stealing their content. They also have plans to stream TV over the Internet and don't want to see start-up technology companies get in the way.

Pay-TV providers are also breathing a sigh of relief. Aereo would have given consumers one more reason to "cut the cord" by getting rid of cable.

TV station owners support the decision, as the retransmission revenue they count on paid by cable and satellite providers for the rights to broadcast their signals will remain unaffected. (Gannett, which publishes USA TODAY, owns or operates 46 TV stations in the U.S.)

Antenna makers will also cheer, since Aereo allowed its subscribers to bypass erecting their own rabbit-ear antennas, which are often unreliable.

Q: Who loses the most?

Obviously, those associated with Aereo, including employees and primary investor Diller. But consumers are also complaining loudly on Twitter and other social-media channels, as they saw Aereo as a David charging up the hill against the Goliaths of the pay-TV business.

The passionate base of "a la carte TV" fans is cringing because Aereo represented the most tangible example of a new TV business model, in which consumers can elect to pay only for the most essential channels without being tied to cable companies. If Aereo were allowed to continue, analysts believe, its existence would have motivated networks and TV providers to dig deeper and faster in their own attempts at "TV Everywhere."

Q: What's next for Aereo?

Aereo hasn't revealed its plans going forward, but analysts believe it will have to shut down its service. It owns some technology that may be sold, licensed or transformed into a cloud DVR-like service. Diller is an old hand in the business and will look to benefit from it somehow.

"We are disappointed in the outcome, but our work is not done," Kanojia said in a statement. "We will continue to fight for our consumers and fight to create innovative technologies that have a meaningful and positive impact on our world."

Q: Why did the court shut down the service?

Copyright violation, basically. The Copyright Act of 1976 gives a copyright owner the "exclusive right" to "perform the copyrighted work publicly."

Aereo infringed on this right by selling a service that amounts to "public performance."

"Aereo neither owns the copyright in those works, nor holds a license from the copyright owners to perform those works publicly," Justice Stephen Breyer wrote in the majority opinion.

Q: Why did the court issue the ruling when networks shows are broadcast for free over the air?

The Supreme Court said that Aereo was operating like a cable system. And cable systems, to adhere to copyright law, must pay for the programming they transmit.

The justices found Aereo's cloud DVR feature in which customers can record shows on Aereo's servers, watch almost in real time and even skip commercials particularly troublesome.

"Rather than directly send the data to the subscriber, a server saves the data in a subscriber-specific folder on Aereo's hard drive," Breyer noted. "Aereo's system creates a subscriber-specific copy that is, a 'personal' copy of the subscriber's program of choice."

Q: What was Aereo's argument?

Aereo argued that its streaming doesn't amount to public performance, since it is grabbing already-free content and recording and storing it for subscribers on their own personal digital "file."

The copy is the subscriber's own copy, and subscribers are assigned their own, unique antenna, it said.

Q: How does the concept of "public performance" affect streaming technology and Aereo's fate?

Breyer wrote that the justices had to answer two questions: Does Aereo "perform" at all? If so, does Aereo do so "publicly"?

Aereo argued that it does not perform but merely supplies equipment that works like a home antenna and DVR. It is only the subscribers who "perform" when they use Aereo's equipment to stream TV programs to themselves, it said.

Aereo likened its role to "a copy shop that provides its patrons with a library card."

The justices didn't buy it. The Copyright Act was clear on this issue, they said. "An entity that engages in activities like Aereo's performs," Breyer wrote.

The justices also determined that Aereo performs "publicly," since its transmitted data are available for viewing whenever subscribers watch a program. In that way, Aereo's set-up is no different than that of cable companies, whose transmissions have been long considered "public" performances in the eyes of the law.

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