Tune in to network TV, but for a fee3/19/2014
The rise of high-speed Internet and online streaming video over the last decade has definitely shaken the broadcast and pay TV business. While burgeoning Web technology has contributed to lower ratings and dipping revenues, it appears what the TV industry is most afraid of is a tool older than the medium itself, the antenna.
Aereo, an online streaming video service, leases customers dime-sized antennas that retransmit locally broadcasted TV content over the Internet. This means someone living in Oregon can lease an Aereo antenna deployed in New York City and watch TV content hours before its broadcast in his or her actual time zone. The streaming video start-up has upset the broadcast TV industry so much, it’s scheduled to defend its legality before the United States Supreme Court in April.
Broadcasters are challenging Aereo’s legal right to stream their content online without paying providers retransmission fees. Cable providers such as Mediacom, Comcast and AT&T negotiate roughly $8 billion annually for the right to transmit broadcast content, so if Aereo is legally allowed to bypass that fee, why can’t cable providers save billions and follow suit? Broadcast Industry ire is so palpable both CBS and FOX have threatened to cease broadcasting and move to cable or an Internet subscription model should the Supreme Court side with Aereo.
An even bigger element of the retransmission fight centers on copyright. Under copyright law, if a broadcaster reaches more than 40,000 viewers with a single broadcast it is considered a “public performance” and is required to pay a federal transmission fee. Aereo’s model bypasses this arrangement by having each subscriber lease his or her own personal antenna. More than 40,000 Aereo viewers possibly watching the same broadcast, each with his or her own antenna, amounts to 40,000 individual broadcasts.
So what chance does Aereo have of the Supreme Court ruling in its favor? Quite good if previous victories are an indicator. Of the dozens of previous legal battles, broadcasters have only won once. TV viewers should start planning to pay cable premiums for broadcast shows like “The Big Bang Theory,” “The Simpsons” and “NCIS.” CV
Patrick Boberg is a central Iowa creative media specialist. For more tech insights, follow him on Twitter @PatBoBomb.