Media Moves

Coverage: Who’s going to fill the Aereo content gap?

June 29, 2014

Posted by Liz Hester

Last week, the Supreme Court ruled that online content streaming service Aereo’s business was illegal. While Aereo moved to “pause” operations, others are trying to quickly take advantage of the opportunity.

CNET’s Joan E. Solsman had this background on the ruling and what it means:

Aereo, the startup that the Supreme Court this week said was illegally retransmitting broadcast TV over the Internet, said it will “pause” operations as it figures out its next move, adding that the company’s “journey is far from done.”

“We have decided to pause our operations temporarily as we consult with the court and map out our next steps,” Chief Executive Chet Kanojia said in a letter posted to the company’s blog Saturday.

On Wednesday, the Supreme Court handed down a victory to the broadcasters suing to shut down Aereo, deciding the company is fundamentally the same as a cable company yet doesn’t pay broadcasters the same fees cable companies must, a violation of the Copyright Act. (CBS, the parent company of CNET, is one of the broadcasters suing Aereo.)

The Wall Street Journal added these details about how the technology works and the company’s court arguments in a story by George Stahl and Keach Hagey:

The service, which appealed to people seeking Internet-based alternatives to cable TV, allowed subscribers paying as little as $8 a month to watch and record over-the-air broadcasts from an array of electronic devices. It was available in about a dozen markets.

Aereo operated with thousands of dime-size antennas stored in warehouses that capture local broadcast signals. Each subscriber who logs on to watch or record a program is assigned a different antenna, meaning no two customers are watching the same copy of a program. The company argued the service’s design avoided issues related to broadcasters’ exclusive rights to the public performance of their works.

Mr. Kanojia on Saturday reiterated the company’s stance. “The spectrum that the broadcasters use to transmit over the air programming belongs to the American public, and we believe you should have a right to access that live programming whether your antenna sits on the roof of your home, on top of your television or in the cloud,” he wrote.

The broadcasters, including Walt Disney Co.’s ABC, Comcast Corp.’s NBC, CBS Corp. and 21st Century Fox’s Fox, have argued that Aereo was unlawfully exploiting their copyrighted works without permission or payment.

Writing for The New York Times, Emily Steel said Simple.TV is moving to grab customers while they can:

Mark Ely saw an opportunity, and he took it.

The day after the Supreme Court ruled against Aereo in a copyright case brought by the nation’s major broadcasters, Mr. Ely was trying to scoop up Aereo customers by promoting his start-up, Simple.TV, on social media. “Former Aereo customer? Join the Simple.TV Family,” the company wrote on Twitter on Thursday.

“We’re telling Aereo customers: ‘Your favorite service is going away. Here’s an idea that isn’t,’ ” Mr. Ely, who started his company in 2011, said in an interview.

The television establishment still has much to worry about after its Supreme Court victory on Wednesday over Aereo, the digital start-up that had threatened to upend the economics of the media business.

ThinkProgress had an interesting piece by Lauren C. Williams that pointed out that cable companies need to move forward and give consumers more of what they want – streaming content on demand:

In the immediate aftermath of the Court’s verdict, cable companies are still going to pressure consumers to buy into the bundle — cable and telephone service, Internet access, and mobile video streaming, Michael Carroll, a cyberlaw professor at American University in Washington, D.C., told ThinkProgress. And even though Aereo’s “particular way of trying to get broadcast online is not going to work, what broadcasters need to look at is that [Aereo] was meeting a demand. People wanted to look at live TV online.”

Carroll said, “Netflix has already shown that you can take a TV show and stream it online,” emphasizing that to survive, Aereo might have to fall back on existing means of streaming TV online with a delay. “But how long should we [as a society] dedicate [so much] of the TV broadcast spectrum to the old over-the-air ways rather than giving it all to the Internet,” he asked.

Aereo was filling a void in the market — and was succeeding, operating in over 10 markets nationwide. And it’s not surprising, over 5 million American households don’t have a TV set and even those that do are increasingly going online to stream live events. Almost 2 million people have been watching the World Cup online, according to Bleacher Report. Another one in three people tuned into the 2012 Olympics via online or through social media, a 2013 Pew Research survey found.

Streaming content is here to stay. While the court is likely shoring up licensing rights, it’s unlikely that the large broadcasters will be able to defend their content from all the start-ups working to disseminate it via TV alternatives. That means we will either see more lawsuits or at some point, the huge broadcasters will have to figure out a way to monetize their holdings or stream content themselves.

Subscribe to TBN

Receive updates about new stories in the industry daily or weekly.

Subscribe to TBN

Receive updates about new stories in the industry.