The US Supreme Court has ruled that start-up company Aereo, which allows users to watch and record live television online and on mobile devices, is illegal.
The Supreme Court ruled in a 6-3 decision that the service, which uses mini-antennas to take up network TV signals for free, violates copyright laws in a move welcomed by American broadcasters, but questioned by the cloud computing industry.
Television giants, including ABC, CBS, Fox, NBC and PBS, had previously argued the start-up should pay for redistributing their content the same way cable and satellite systems must or risk high-profile blackouts of channels that anger their subscribers.
Shares in CBS rose 5 per cent in early trading while Walt Disney, which owns ABC, climbed 1.4 per cent after the ruling was announced on Wednesday morning.
Aereo, backed by media mogul Barry Diller, insists that the service is used by one subscriber at a time and works much like the situation at home, where a viewer uses a personal antenna to watch over-the-air broadcasts for free.
During arguments in April, some justices suggested that a ruling in favour of the broadcasters could harm the future of cloud computing, which gives users access to a vast online computer network that stores and processes information.
Today, justice Stephen Breyer said in his majority opinion that the court did not intend to call cloud computing into question by ruling against Aereo. Justices Antonin Scalia, Samuel Alito and Clarence Thomas dissented, arguing that it should not be held liable for copyright infringement
Additional reporting agencies.