On April 22nd, American Broadcasting Companies, Inc. v. Aereo, Inc. will be heard in the Supreme Court and if Aereo should prevail all hell will break loose.
Aereo offers a service that takes all the local broadcast channels and streams them to your mobile devices for only $8 per month. In the Boston area this would provide you with all the major networks and a collection of other independents and affiliates amounting to about 35 channels.
The big problem is that Aereo doesn’t pay a cent for their content. Nope, they just take it off the air for free. Comcast, Time Warner Cable, etc don’t have this advantage. They must pay re transmission fees, and that is what in part makes Pay TV so expensive. Recall the recent battle that TWC had with CBS.
So what could happen if Aereo wins? Here are a few of the possibilities:
1. Aereo gains major publicity and successfully expands across the US.
Aereo apparently has their hopes up with plans to expand to 19 new cities already. And Aereo has been avoiding the western US for legal reasons. The supreme court could change that.
2. Cable operators refuse to pay re-transmission fees.
Why should they pay for what Aereo gets for free? I know it all has to do with Aereo’s “individual” antennas, but that’s not rocket science. Comcast is perfectly capable of making the same thing.
3. Broadcasters flip the switch on Aereo by shutting down OTA.
Well maybe. The major networks for example could go Cable only in major metro areas. This would be a kind of scorched earth approach as it inflicts pain on affiliates and the networks themselves.
4. Aereo clones emerge.
Given the go ahead from SCOTUS , multiple Aereo’s could pop-up over night. And since Netflix already has the infrastructure in place couldn’t they do this without help from Aereo? The original Aereo could go the way of Napster after having paved the way.
Well these are just a few of the possibilities. Now to speculate, I think Aereo will lose. I personally don’t buy the argument that each consumer has an individual antenna. Nonsense and here is my technical argument:
Put up one giant antenna, carefully amplify and split that signal over coax cables and you have have the originals of Cable TV in the US. So now Aereo has thousands of dime sized antennas that feed the Internet with individual streams. What you end up with is the same thing by a different technical method. Aereo looks like a Cable operator to me.
In any case the ramifications of this case are enormous on the industry. I’ll be watching.