Aereo Internet TV forces Fox, CBS to consider subscription-based model

By on April 10, 2013, 4:30 PM

Following a recent court decision favoring Aereo's Internet-based, royalty-free retransmission of broadcast television, Fox warned it may pull its freely available NY-area broadcast channel in favor of a subscription-only model. CBS claims it too is mulling over a similar move to ensure it remains paid for its content.

"We need the dual revenue stream model of retransmission fees and advertising to sustain our business," said News Corp. Chief Operations Officer Chase Carey. News Corp. is the parent company of Fox. "If we can't get our rights protected, we will pursue business solutions to take our network and turn it into a subscription service." Carey added.

Aereo is a controversial streaming service which delivers locally broadcasted television to native subscribers via their Internet connection. To skirt legal complications inherent to rebroadcasting third-party content without permission, Aereo has engineered antenna arrays with thousands and thousands of diminutive receivers. By maintaining at least a 1:1 ratio of antennas to local subscribers, Aereo bills itself as more of a "conversion" service than a rebroadcaster. It is attempting to navigate a mostly untested legal mine field by claiming its subscribers "own" an antenna and the medium upon which the broadcast is delivered is irrelevant.

Although local broadcast TV channels are free, Aereo costs money: $12 per month or $80 per year. Part of this is used for infrastructure, operating costs and value-added services like DVR capability, but there is almost certainly profit to be made here. The company contends it provides a valuable service to New Yorkers who suffer from poor reception or simply don't have a television set.

For now, the service primarily operates in New York; however, Aereo is set to expand to over 22 major cities including Miami, Detroit, Washington D.C, Pittsburgh and Dallas.




User Comments: 16

Got something to say? Post a comment
stonarda said:

'to sustain our business' Pfffff, they make enough money already and don't need any more money than what they got. Its all about the money these days for big coporations, and not about the content they deliver!

1 person liked this | Guest said:

Who are you to determine whether or not someone has too much money?

Tygerstrike said:

@ston

Sorry to break it to you but its been all about the dollar since the 1950's. Before that it was radio and its advertising. It will always be about how much money the corporations make. Content is irrelevant. Content is simply the product that is used to make the money. IF these TV companies gave two shakes of a rats arse, they would jump on this medium (Internet TV) and make it their own. Offer the same service at half the price. No middlemen,rebroadcasting, or third party makeing money off of someone elses dime. This would allow them to have a leg to stand on as the product that Aereo would be rebroadcasting would in essence be "stolen" from the TV ppl. As Fox, CBS, ect would be offering the same service online they could argue that Aereo would be stealing business from them without paying any royalties.

MrAnderson said:

I thought the Networks were required to provide free over the air television as part of the spectrum they were given. If they go subscription, they will need to drop commercials and up the number of shows, and better be on demand.

Good luck.

windmill007 said:

These are people who want to watch tv with commercials. I pay for tv but I never watch commercials. You would think they would want these types of services to expland there market. Guess they get paid the same no matter how many people watch those channels they just want more money. Never have enough billions.

Guest said:

I don't need FOX nor CBS that bad to pay for there offerings. As Mr. Anderson pointed out, the people of the U.S. via the government own the airwaves. The people allow Broadcasters to use the airwaves so the broadcast must be free. The way they make money is by selling advertising, which of course is based on the amount of viewers. I think the only way a station could charge a subscription is via cable/internet (non-broadcast). Again, I'm not going to pay for the content as most of it sucks. I think the real thing is that FOX and CBS are saber rattling to help spread FUD against Aereo.

dialogue said:

This news is a week old. what gives?

anyway, how about a quick dose of reality.

30 years ago I paid a one time fee to have an antenna on my roof to get TV reception. I got to watch all of the content on tv for free- I watched commercials..

Now Aereo is charging users $80 a year for that same right... and THE NETWORKS are getting

angry at that?! I don't get it.

Sorry CBS/ABC/NBC/FOX- you just can't stand competition...get used to it...

Guest said:

Now Aereo is charging users $80 a year for that same right... and THE NETWORKS are getting

angry at that?! I don't get it.

The networks want that pieces of $80 too. I understand their agruement about it, but I do not understand their agruement of priate (copyright infringement) though.

SCJake said:

It's amazing how everyone instantly cries about the "big corporations" when something comes up like this.

Lets face it. If Comcast, Time Warner, Walmart, Viacom, Constellation, Ford, Etc just disappear then everything collapses. You people realize how many thousands of jobs those companies make? Yea, they do a lot of things that make us angry, and yes they arguably "unjustly" bill for things, but the fact is that without them we would have so many things collapse. People need to stop whining about them and learn to live with them. They can be changed, we just need to focus on the people who are too damn dumb to understand whats going on and would rather sit on an internet forum whining then actually do something.....

/endrant

Lionvibez said:

It's amazing how everyone instantly cries about the "big corporations" when something comes up like this.

Lets face it. If Comcast, Time Warner, Walmart, Viacom, Constellation, Ford, Etc just disappear then everything collapses. You people realize how many thousands of jobs those companies make? Yea, they do a lot of things that make us angry, and yes they arguably "unjustly" bill for things, but the fact is that without them we would have so many things collapse. People need to stop whining about them and learn to live with them. They can be changed, we just need to focus on the people who are too damn dumb to understand whats going on and would rather sit on an internet forum whining then actually do something.....

/endrant

So because these companies employ thousands we have to put up with shit service and high prices because they are too big to fail is that what your saying?

Tygerstrike said:

@Lion

No what they are saying is that they are not going away and will prolly be around long after we are all dead. So given that information, it falls on us the consumer to vote with our wallets. They may be giants, but once revenue freezes up and drops off then the giant will notice us. And get off the computer and go do something to activly change the situation instead of just whining on a forum.

SCJake said:

@Lion

No what they are saying is that they are not going away and will prolly be around long after we are all dead. So given that information, it falls on us the consumer to vote with our wallets. They may be giants, but once revenue freezes up and drops off then the giant will notice us. And get off the computer and go do something to activly change the situation instead of just whining on a forum.

Thank you. I knew that common sense reigned supreme with at least some of the members here!

Lionvibez said:

@Lion

No what they are saying is that they are not going away and will prolly be around long after we are all dead. So given that information, it falls on us the consumer to vote with our wallets. They may be giants, but once revenue freezes up and drops off then the giant will notice us. And get off the computer and go do something to activly change the situation instead of just whining on a forum.

And how would we vote with our wallet? they control all the content.

the only way to do that would be to not watch tv?

And how is revenue going to freeze up? even if you and I and all the people we know stop watching tv its a drop in the bucket which these larges companies don't even notice.

As for whining in a forum you may want to direct that to the person that posted.

markml said:

It's amazing how everyone instantly cries about the "big corporations" when something comes up like this.

Lets face it. If Comcast, Time Warner, Walmart, Viacom, Constellation, Ford, Etc just disappear then everything collapses. You people realize how many thousands of jobs those companies make? Yea, they do a lot of things that make us angry, and yes they arguably "unjustly" bill for things, but the fact is that without them we would have so many things collapse. People need to stop whining about them and learn to live with them. They can be changed, we just need to focus on the people who are too damn dumb to understand whats going on and would rather sit on an internet forum whining then actually do something.....

/endrant

In a communist country, perhaps what you are saying is true, but I don't think you really understand how capitalism is supposed to work. When a large company fails, it makes room for 10 new innovative and faster growing companies, that combined will end up employing a lot more people than the "too big to fail" company. That's at least the way an efficient free market is supposed to work.

Everything has a life cycle. Companies make products that have built-in life cycles, so you need to constantly replace what you own. Why shouldn't the companies themselves also have a life cycle? By allowing innovation to devour the big companies, you permit smarter stronger companies to form in their place.

Think about gardening. When a tree in your garden starts to grow very sick, the best thing you can do is to cut it down, to save the rest of your garden. That sick tree is sucking up nutrients from the rest of the garden without contributing anything. But if you get rid of the old tree, a new tree will shortly replace it.

Also, ask yourself how many jobs the big companies are really providing Americans? And how many are they shipping overseas to squeeze profit margins? See, when a company stop innovating, it has to increase its profits somehow, and the main way it does so is by reducing costs. And the biggest cost reduction is labor. Smaller companies actually can't out-source as much as big companies, so they are forced to innovate to make profit. And innovation is good for everyone.

SCJake said:

@markml Not saying that big corps need to be protected, just that people who always instantly blame them for everything and say that they need to die dont know what they are actually saying. The general population is stupid. This is a fact. And even the intelligent act stupid when around the less intelligent. This has been proven time and time again over the years

markml said:

@markml Not saying that big corps need to be protected, just that people who always instantly blame them for everything and say that they need to die dont know what they are actually saying. The general population is stupid. This is a fact. And even the intelligent act stupid when around the less intelligent. This has been proven time and time again over the years

Perhaps, but the subject of this whole article is about these companies belly-aching over innovation squashing part of their revenue model. Essentially that's what it comes down to.

They were fine when TV was being distributed freely to everyone who owns an antenna, because the potential viewership made advertisers happy, and they could make a few extra bucks off the fact that not everyone was fortunate enough to have antenna reception. And those people with poor reception were locked into monopolistic cable providers, often by their own local government. People in that situation had no choice.

Well, along comes someone and offers those people a choice. A way to solve the problem of people not having good antenna reception. 50 years ago, the networks would have been happy about this, because it would mean more viewers (the problem cable was originally supposed to solve). 50 years ago, if a company like Aereo existed, cable TV probably never would have become dominant. And Aereo's model is fully legal -- if I'm allowed to own an antenna, who says I have to place it at my house. That's obvious without a lawsuit.

I think what angers ordinary Americans about these companies is that they're so willing to waste our tax-payer dollars on lawsuits because they don't like innovation interfering with their business. Of course, they're really just patsies to real villain, the lawyers. It's the American legal system that's messed up.

Load all comments...

Add New Comment

TechSpot Members
Login or sign up for free,
it takes about 30 seconds.
You may also...
Get complete access to the TechSpot community. Join thousands of technology enthusiasts that contribute and share knowledge in our forum. Get a private inbox, upload your own photo gallery and more.