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04.15.2013
Originally featured on BroadcastEngineering.com
Gloves come off: FOX and CBS battle Internet TV company Aereo

Internet TV company Aereo’s recent NYC federal appeals court win has not settled well with broadcasters. The court ruled that Aereo is in the clear and is allowed to pump TV stations into people’s homes without paying license and retransmission fees to local broadcast stations. The ruling agreed with Aereo in that the company is essentially just letting consumers rent a TV antenna. FOX was the first to respond, pondering to leave the free airwaves and go satellite and cable only. CBS is now chiming in, also thinking about yanking its signal from OTA in NYC. Neither seems to be actually considering consumers, who will serve as collateral damage.

Chase Carey, chief operations officer of News Corp., had said that FOX would change its transmission methods to ensure it gets paid for the TV content it produces. Leslie Moonves, the chief executive officer of CBS, shortly afterward agreed with the concept, and has reportedly already had talks with several cable operators about taking its signals off the air. Making CBS and FOX subscription-only in NYC could have a profound effect on those who still get their programming OTA via standard antennas. It also impacts the Dyle initiative, which is a consortium that is focused on branding digital devices, such as smartphones and tablets, to ensure they work correctly in receiving OTA broadcast TV signals.

Although cable and satellite subscribers are used to seeing scrolling messages saying “this channel may be going away soon,” due to some power play between provider and network, this could be the first time that major networks may be telling regular antenna TV fans that their favorite broadcasts may be erased from the airwaves.

As broadcast TV strives for relevance, and competes for attention from the Internet and portable devices, this latest move really shows a disregard for consumers and displays the desperation broadcast can often show as it strives to climb back to the top. Although the debate of the legality of Aereo has always been under question, the questions are starting to be silenced by the courts. CBS and FOX, instead of letting the courts decide, have instead threatened to offer consumers less choice. Unfortunately, this could not come at a worse time.

Customers are already tired of increasing cable and satellite bills, and the number of cord cutters is spiking up every year. As new hardware options such as Roku and Apple TV, along with new types of networks such as Hulu Plus and Netflix streaming gain momentum, people are getting more incentive to disconnect. CBS and FOX arguing over free TV and forcing viewers to pay would obviously not sit well. Truthfully, OTA is a smaller market these days, but how are local advertisers going to feel when the signal is shut down because of the Aereo disagreement?

Aereo has said repeatedly that the consumer owns the antenna, and as such, the company does not need to pay broadcasters retransmission fees. Broadcasters don’t like to see potential money slip through the cracks, and even more so don’t like to not have complete control over their signal. But a move to turn off broadcast signals to block Aereo, while angering consumers who have no alternative but to pay, seems like a move that may cause even more trouble. Will there be a black screen and a “if you would like your station back, please call Aereo to complain” message? Consumers’ first response may be “What is Aereo?”

It’s worth noting that the broadcasters are in the pondering stage. The public response and knee-jerk reactions to the press no doubt stem from the frustration CBS and FOX feel about Aereo. But Aereo is a new concept and a new method of delivery. It’s no doubt going to be scary to some. Here’s hoping that consumers don’t get caught in the crossfire.



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