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TV networks peck at sun-bleached skeleton of Aereo, come away with $950,000

A pittance, but it's better nothing, right?

The skeletal remains of ill-fated TV streaming startup Aereo will pay out $950,000 in a copyright infringement settlement, putting to rest a lawsuit filed by US broadcasters that has already sent it into bankruptcy.

For a couple of years, Aereo operated an online video service that captured live television broadcasts, recorded them digitally, and allowed customers to stream them from the cloud. But when no less than the US Supreme Court found Aereo guilty of violating copyright law, the proverbial writing was on the wall.

The Supremes' judgment left Aereo facing claims of around $108m in damages for copyright infringement. But on Monday, the streaming startup settled nearly $100m of those claims for just a penny on the dollar.

A group of 19 broadcasters including US TV networks ABC, CBS, Fox, NBC, and PBS will split up [PDF] the paltry sum of $950,000 to settle claims that collectively account for more than 90 per cent of the judgment against Aereo.

The broadcasters opted to take the reduced amount in exchange for prompt payment out of Aereo's rapidly dwindling cash reserves. The startup has already sold off most of its assets in a fire sale that netted less than $2m, with much of its intellectual property going to DVR-maker TiVo. The settlement notes that after paying out the $950,000, Aereo will have just $811,000 left in total funds to cover $7.5m in debts still outstanding.

Throughout its legal ordeals, Aereo vigorously defended its broadcast model, arguing that it offered a TV "time shifting" service that was no different than what individuals do when they record programs with their DVRs or VCRs at home.

TV mogul Barry Diller, a top investor in the startup, once brazenly said that Aereo had "no plan B" should it lose its Supreme Court case. In the end, Aereo did briefly try a second gambit when it attempted to have itself reclassified as a cable network. When that, too, failed, bankruptcy was the only option left.

Aereo has agreed to deliver the $950,000 within two days of when the ink on the settlement dries. From there, the funds will be put into an escrow account to be divided up among the broadcasters. ®

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