Aereo Could Bring Down Broadcast TV

” Could it really turn out that a company with a seemingly loopy business model — capturing over-the-air TV signals and streaming them to subscribers over the Internet — will be the thing that finally brings down the American broadcasting industry? Quite possibly.

Chase Carey, News Corp.’s (NWSA) chief operating officer, said Monday that if the company in question, Aereo, is allowed to continue, his company’s Fox Broadcasting, and all its affiliate stations, will stop broadcasting over the air and go all-cable. “If CBS, NBC, and ABC follow,” says Bloomberg News, it would “mark an end to television as it’s been known since The Honeymooners aired in the 1950s.” So far, those networks haven’t weighed in, but the Spanish-language TV giant Univision has: It made a similar threat after Carey made his remarks during to the National Association of Broadcasters convention in Las Vegas.

Those other networks, though, along with PBS and Fox, are fighting hard to put Aereo out of business. But so far, they’re losing their legal argument. A federal appeals court last week ruled that Aereo can keep operating while their lawsuit against the company proceeds. In so doing, the judges noted that the networks are unlikely to win at trial. Barring a further appeal to the Supreme Court or passage of new laws, that would mean that broadcast signals are there for the taking by Internet streaming companies like Aereo, which is backed by Barry Diller’s IAC/Interactive (IACI).

Aereo says it’s basically doing the same thing, but with broadcast signals, which, after all, are free for the taking by any viewer who wants them. Aereo makes a TV signal available to viewers, via the Internet, for a subscription fee. The legal basis for the business depends on Aereo creating a separate video file for each subscriber — something that’s not technically necessary but is done only to comply with copyright laws.

Aereo draws more viewers to the programming, and hence to the ads. But it devalues the cable subscriptions that people buy largely in order to access local and live programming without having to fuss with an antenna.”

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