Regulation does matter

Taken from The Economic Times's article

This business case remind us that Business Model need to be ensured with the Legal aspect and Regulation Compliance, though sometimes the regulatory issue is possible to be revised for the sake of consumer benefit.

Internet TV startup Aereo Inc files for bankruptcy

Reuters Nov 23, 2014

NEW YORK: Aereo Inc, the online video streaming company backed by media mogul Barry Diller, has filed for bankruptcy protection.

The Chapter 11 filing on Thursday night came five months after the US Supreme Court said Aereo violated broadcasters' copyrights by capturing live and recorded programmes on miniature antennas and transmitting them to subscribers who paid $8 to $12 a month. That decision effectively forbade New York-based Aereo's business model, an attempt to offer a less-expensive alternative to cable television.

Chief executive officer Chet Kanojia said the court decision created "regulatory and legal uncertainty" that proved insurmountable. "A little over three years ago, the team at Aereo set out to build a better television experience for the consumer," Kanojia said in a blog post. "We knew we had touched a nerve, had created something special, and had a built something meaningful for consumers." Ultimately, he said, "the challenges have proven too difficult to overcome." In a filing with the US Bankruptcy Court in New York, chief financial officer Ramon Rivera said getting protection from creditors should provide "necessary breathing room" for Aereo to sell its assets, recapitalize or restructure.

The privately held company had been trying to persuade regulators to declare it eligible for a licence available to cable systems, but Rivera said the timing was "uncertain."