The legal battle between video streaming service Aereo, Inc. and television broadcasters came to a head when the U.S. Supreme Court released its decision Wednesday, dealing a crippling blow to the embattled startup. By a 6-3 margin, the Court, in American Broadcasting Cos. v. Aereo, Inc., concluded that Aereo violated broadcasters’ copyrights. In effect, this ruling could spell the end of the upstart Aereo. However, the ruling stands for a broader principle businesses would be wise to follow: that business plans should not be based on tenuous or unproven interpretations of the law.

Under the law, individuals may access over the air TV broadcasts using an antenna attached to their televisions for private performances, free of charge. On the other hand, if the screening amounts to a public performance, where one copy of the program is distributed to all subscribers, then the company showing the screening must pay for the programming. Publicly performing a work without paying for it constitutes copyright infringement under the 1976 Copyright Act.

Using modern technology, Aereo sought to work within this crease in the law and appeal to consumers’ increasing desire to cut their connection with cable providers. Aereo provided consumers a dedicated, cloud-based HD antenna and digital video recorder (DVR) system. Consumers could then access live TV programming and DVR from smartphones, computers, or televisions, all while their hardware was stored at an Aereo server facility. Since the screenings were done at separate places and times, often within the privacy of the consumer’s home, Aereo believed it was permitted to put on the performances without paying for the content. Thus, Aereo was able to provide streaming content to paying customers at a fraction of the cost of basic cable.

Broadcasters quickly noticed the threat Aereo posed to their royalty-based business model. They pay the networks millions of dollars to distribute original programming. Aereo, on the other hand, was providing broadcast television and DVR access wirelessly without paying any such fees, giving it a massive advantage.

Based on this concern, a coalition of broadcasters filed suit against Aereo, alleging it violated their copyrights. In the suit, the broadcasters argued that Aereo acts as a cable company, and, as such, its service amounts to a public performance and requires the payment of royalties to stream the content.

In its opinion, the Court agreed with the broadcasters. Aereo argued that it acted within the law because each subscriber owned their own antenna and DVR device, meaning that its streaming content amounted to numerous private performances. Although this argument is technically correct, the Court swept it aside. Instead, the Court found that by selling access to this service, Aereo effectively operated as a traditional cable company. Thus, Aereo was not streaming private performances, but was in fact streaming public performances, for which it is required to pay.

The Court’s holding offers companies some guidance on what to consider when formulating new business ideas and planning expansion of existing businesses. Specifically, businesses should consider the impact varying interpretations of the law may have on their business plans. Put differently, business plans should not be based on untested or tenuous interpretations of the law. In Aereo’s case, their entire business model was based on a very specific interpretation of copyright law. They had no “Plan B”. This dependency left little room for error. Since the Court ruled against them, that lack of foresight will likely cost Aereo dearly. In fact, Aereo informed its subscribers that it would “suspend” its service at 11:30 a.m. EDT on June 28, 2014 and refunded each subscriber’s last month of paid service.