Aereo Win Could Be a Turning Point for Online Video
- by Ross Fadner , July 12, 2012
Increasingly, it looks like the television and online video industries are on a collision course, as broadcasters continue to battle with pay TV providers over carriage fees and online TV startups like Aereo make it easier for consumers to cut the cord and still get their content.
The momentum may finally be moving in online video’s favor. On Wednesday, a federal judge rejected a request by broadcasters to halt the operations of Aereo, which uses antennas to pick up broadcasters’ signals in New York and then streams their channels online for a subscription fee.
The broadcasters -- which include Fox, PBS, Tribune, Gannett and WNET -- accused the Barry Diller-backed company of “misappropriating copyrighted material” by essentially stealing broadcast signals without paying for them. The group says it will appeal the decision.
Separately, Viacom on Wednesday decided to curtail U.S. access to some of its television content online in a move that many see as a direct reaction to its dispute with DirecTV over the carriage fee it receives in exchange for distributing its content via the pay-TV service. As of late Tuesday, Viacom channels like MTV, Nickelodeon and Comedy Central were blacked out for about 20 million DirecTV subscribers.
By Wednesday afternoon, the media giant responded by cutting off access to some of its content, including “The Daily Show,” to all U.S. Web users.
“Once again it’s viewers who suffer when media companies stall in their negotiations. But the scale of Viacom’s overreaction is unprecedented,” John Bergmayer, a senior staff attorney for public interest group Public Knowledge, told The Washington Post.
“Viacom has decided to take a service away from all Internet users in its attempt to punish DirecTV,” Bergmayer said. “It is apparent that Viacom puts little stock in the Internet and the online future of video if it is willing to use all Internet users as a pawn in its negotiations.”
Viacom’s dispute with DirecTV is not the only wrangle over carriage fees. Big media companies keep demanding higher fees from pay-TV operators, who in turn feel they are being held hostage by the content owners. As a result, consumers end up paying higher monthly subscription fees for their pay-TV service. Many consumers are irate with this arrangement, because they only watch a handful of the hundreds of channels they are paying for.
Meanwhile, Web-based services like Aereo are trying to benefit from this disconnect by offering fewer channels and cheaper monthly subscription fees.
What a great method of "disgruntling" your subscribers by limiting and cutting off access to programming - the ONLY people who end up getting "punished" are the consumers of whom you need. 20 MILLION people PUNISHED because of a FIGHT between giant conglomerates.
How democratic is that?
Forcing useless content is not the answer, allowing the consumer to decide is the key to success across the board - be it "OTT" - "IPTV" or the next generation of delivery.
My congrats to Aereo for fighting the good fight on behalf of us all.
Joe Q. Bretz
President
The Digital Development Group, Corp.
(otcbb)DIDG
Its rare that I disagree with you, Ross, so I do so carefully here. But I think you misunderstand the Aereo model and how it would impact Online Video (or at least in the headline).
Aereo is nothing more than broadcast TV. Its a set of "rabbit ears" for whatever screen you want to put digital broadcast content on. But it does very little for the "online video industry" at all. All of the advertising is broadcast advertising.
It may be bad for the cable companies, b/c people are waking up to ways they can get "enough" of the content they want without paying for the bundles of channels they don't want. Its much more akin to renting a Slingbox than subscribing to Hulu. In my very humble opinion, its barely online video at all. The same way watching live TV through Windows Media Center doesn't qualify as online video in my book either.
The TV networks has been known to be difficult to penetrate. We have the technology to do internet tv long time ago but many other companies failed on the license issue. Netflix has trouble getting license for the latest shows even thought they have a good framework. It's time to loosen the license restriction. On the other hand, there are many free ones out there. I've been watching some shows from Tvphoon (tvphoon.com) and the content pretty good considering it's free.
This article reads like a paean to Occupy Wall Street. "Content just wants to be free!" Please. If Aereo prevails it will crash the entire copyright and related intellectual property constructs; won't happen. Happy to bet Ross on that, even give odds. Any problems that Netflix has with licensing are because the licensor doesn't have the rights to grant, Netflix can't afford the content, or the licensors don't want Netflix to have the content.
Television networks are ignoring a number of realities. First, offering poor online versions - think FX with their arcane navigation & mind-numbing commerical load or Viacom's bizarre decision to yank programs - only slaps themselves in the face. For now they can get away with it even if these are myopic decisions.
Second, retransmission consent with its accompanying revenue stream is a relatively new source of income for broadcasters. One that shouldn't be assumed as a right.
Third, cable operators are pushing the upper limits price elasticity. Forced bundling is creating lower utility for the consumer. The result is the search for better value, hence the increase of substitutes. The impact is small now, but will grow because the cable operators are stuck with business models that can't/won't adapt to the real needs and wants of the consumer.
So let's hope networks and cable operators continue to believe in the rightness of their position - which seems to be ignore the consumer. This will increase the pressure for better alternatives. Then at some point in the not too distant future all networks and cable operators can join the print media gang in the "woe is me" song wondering what happened to the good old days.