/// New Company Aereo to Provide Online Streaming for Broadcast TV

February 14, 2012  |  Media Week

First-run broadcast content has long been the holy grail in the streaming wars; now, it's coming to New York residents via a new company called Aereo. The Web-based service will be available on platforms like Roku and Apple TV and has among its backers FirstMark Capital, High Line Veutre Partners, and (most notably) Barry Diller's IAC. Diller himself has joined the company's board of directors. The venture doesn't just pave the way for New Yorkers to cancel their cable subscriptions (Time Warner Cable's cheapest package runs consumers $42 a month, or about twice what a subscription to Netflix streaming and Aereo would cost)—it also sets the stage for an even fiercer war over retransmission fees, especially if Aereo is successful. The New York Times ' Brian Stelter explains how it works : The company doesn't pay license fees to anybody; instead, it sets up thousands of antennas somewhere in New York (it doesn't say where), pulling down those digital signals and sending them out to its subscribers. As long as it keeps the customer-to-antenna ratio at 1:1, the company can argue that it is simply an antenna rental service in the same way that Cablevision's boxless DVR is legally a DVR rental service (hat tip to Brian, again). It's an ingenious argument, and one that has clearly gotten a lot of vetting as the company trains for the inevitable legal scrap over whether or not renting antennas is different from pirating a signal. “Aereo is the first potentially transformative technology that has the chance to give people access to broadcast television delivered over the Internet to any device, large or small, they desire,” said Diller in a press release issued Tuesday morning. “No wires, no new boxes or remotes, portable everywhere there’s an Internet connection in the world.” The service will go live on March 14. It costs $12 a month after a 30-day trial and provides access to ABC, NBC, CBS, FOX, The CW and PBS. It's the first time consumers have been asked outright to pay for broadcast television since the changeover to a digital signal rendered antennas mostly useless in New York. Even digital receivers can't pick up a signal in apartments that once received local broadcasts loud and clear; since that time, cable operators have been at war with broadcast networks looking to shore up their bottom lines by increasing fees to retransmit signals that used to be available for free. The fees used to be nominal; they're getting less so with every new carraige deal. With the new deal, Aereo gives its subscribers access to something they've never had online before: regular local sports. If you wanted to watch any Giants game except the Super Bowl, you had to watch it on TV (and if you lived in an apartment building, you probably had to watch it retransmitted on cable). If Aereo succeeds (and if it withstands the inevitable legal challenges), it will change the business profoundly, and it won't be good for cable operators: first, it will provide compelling evidence that the major broadcasters are at worth at least $2.40 a subscription, and it will attack cable companies' subscription bases.

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New Company Aereo to Provide Online Streaming for Broadcast TV


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