McAdams On: The Point of Aereo

INCREDULOUS—What’s the point of Aereo?

If the technology works as Aereo claims, it’s worth a fortune in licensing fees. So why go a service-launch route?

It makes no sense.

I have yet to see analysis by an independent engineering team explaining how Aereo’s tiny antennas work individually rather than as a master antenna system, as many engineers tell me it would. This is the premise on which Aereo’s entire legal argument rests. Independent confirmation would dismantle the lawsuits. So why is Aereo not willing to subject the technology to independent analysis? Why not let the skeptics run a few tests? It would be cheaper than shoveling money at lawyers.

It also would be cheaper than offering Aereo as a service. Aereo’s storage and processing costs likely exceed the $8, 20-hour monthly subscription fee by as much as 60 percent. (Using storage cost figures made public by Aereo and Amazon’s on-demand processing fees.) Aereo may or may not do better than Amazon’s processing costs, but adding in infrastructure and marketing costs still begs the question: How is this making money?

Why not license it to programmers rather than go to such great lengths to circumvent copyright law? The cost to reach revenue from licensing would be a tiny fraction of constructing infrastructure on a market-by-market basis, as Aereo’s now doing. Aereo investors have thrown in to the tune of $59 million. “Investors” being namely Barry Diller, who’s current empire is built on Internet advertising. The bigger question than Aereo’s legality is its raison d’etre. I assure you that it ain’t about no poor, wretched consumer’s “right” to free TV, the very thing the wireless and consumer electronics lobbies are trying to do away with.

If nothing else, Aereo does shine a light on the gaping chasm that is content copyright law in the age of the Internet. The problem with that is no one knows how to bridge that gap or has the motivation to try. (Comments are not publishing properly, so I'll try to keep up by simply adding them to the bottom of this post, newest first. ~ DMc)

Image - **ckyeahreactions

Comments [sic]...
Deborah -- The reason Aereo won't allow its technology to be properly diligenced is that it wouldn't survive such a scrubbing. As described, Aereo has built a Faraday Cage (look it up)...the physics are inescapable. I know of no one who is suggesting that the broadcast networks are the "guys in the white hats" on this matter. They are every bit as greedy grubbers as Barry Diller. There ain't no "good guys" in this soap opera. It's copyright law that's at stake here - and that is very much worth the fight. And this law (the DMCA as it's now called) is not some flipping "black art" - it is only a "gaping chasm" for those who are willfully ignorant of understanding its structure and purposes. WTF does "bridge the gap" have to do with anything? You want the right to perform copyrighted works, you negotiate a license to do so. No rocket science, no brain surgery. Pay to play or go away. And Aereo's fatal problem is that it refused to pay!
You're so right. As suggested some time ago, Barry has too much money and is bored. But what's wrong with throwing that money to lawyers? We're nice folks, too! In this case, I should note, I don't think there's even much of a "chasm" regarding copyright law. We'll see, but I don't think the Supreme Court will have too much trouble interpreting the current law as including obligations that Aereo says would close down its non-existent business plan.
I agree with Ms. McAdams on the questionably profitable nature of the Aereo enterprise. However, it is my view that Aereo isn't REALLY suggesting that each individual subscriber has their own little antenna; rather, they are exploiting a hole in copyright law that permits them to argue that such a scheme is at least conceivable, even if not currently practicable with prevailing technology. Then, if the courts find that their method is legally permissible, they can seek more sophisticated methods of actually making sure that it can actually be done. If they didn't at least test the law, then their desire to create a system that really did give everyone their own little antenna (or whatever other methodology that now or in the future will be dreamed up) would be vitiated.
Or Aereo wants to be the next Netflix, a ubiquitous product that lots of people want to pay for. With Moore's Law, what is breakeven or a little worse today can become enormously profitable in a few years, and economies of scale can only help.
It is obvious there is a hidden agenda at work. This is being forced to be a success in spite of all the evidence to the opposite. The physics of the antenna just does work out to a single antenna per subscriber. The size is not even close to being an efficient antenna for the tv channels. True a piece of random length wire can be an antenna if flooded with enough signal. I am certain this is the case here. However, I want to see the one antenna disconnected and see that one subscribers tv set go dark. Will not happen. Why? Because the internet is NOT an RF distribution cable system. You can not pickup channel 2 on the antenna at a distant point and have the RF signal travel down the internet to the TV set and connect to the antenna jack on the TV set. It will not work. You need to receive the signal at the "head end" convert it to a stream of digits send the digits to computers that will allow it to stream in a new form on the internet, then a computer at the receiving end must connect to the sending computer, gather the digits from the sending computer and reassemble them into a video file that then can be converted to a video signal and then output to a screen/monitor. This will of course be of a lesser bandwidth than the original transmitted signal. I believe the copyright states that one is not allowed to distribute, modify or retransmit, in any form without permission. Here is a news flash for ya, taking a higher bandwidth signal, receiving it, demodulating it, converting it to a bit stream and then sending it out via an internet connection and for a profit, is in violation of ALL of these conditions, as it is a modification/conversion of the original signal, it is a redistribution of the original signal and these guys are making a revenue stream off of copyrighted material that has been paid for by the broadcaster for s specific market. For further reading on this one needs to go to this web address This is not a new issue and was addressed by congress in 2000. or look here Aereo states the antennas are NOT dedicated to each subscriber. Respectfully Submitted By A Frozen Engineer
You hit the nail square on. Like the Watergate conversation, "follow the money...".
Could perhaps the point be to put thumbs on the scales of the TV stations as they weigh whether to keep their spectrum or fold and auction it? $59 mil ain't much in that context, right?
Aereo's antennas may not have been subject to analysis by an independent engineering team, but they were subject to analysis by the plaintiffs. Plaintiffs attempted to challenge the independent functioning of the antennas in district court, and failed, ultimately not even bringing their expert to testify in the hearing, and dropping the issues. In fact, testimony indicated that signals received at the Aereo facility had 30 dB of headroom, and plaintiff's expert conceded that sufficient signal strength would overcome all the problems plaintiff's postulated might exist for small antennas. (Tough to imagine that 30 dB of headroom is sufficient signal strength.) Personally, I question the economics (and sensibility) of Aereo, also -- but your alternative suggestion makes no more sense. If Aereo's technology is uneconomic to operate, then it's worth pretty much nothing from a licensing standpoint. Furthermore, the big boys aren't going to adopt Aereo-style delivery anytime soon, because it's unquestionably uneconomic to adopt such for mass deployment. The economics are questionable for an OTT provider like Aereo. For a facilities-based provider, the economics aren't questionable, they're a complete non-starter for the foreseeable future. 3/27/2014
I'm not sure the point of this opinion piece. The primary argument seems to be that Aereo hasn't every been independently tested and therefore must be acting as a master antenna. Except that Aereo WAS tested, repeatedly by the plaintiffs and the individual antennas were verified. This is such a non-starter that the plaintiffs dropped this line of argument after the first appeal. Further, the writer has little to no knowledge of cloud pricing. Amazon VM charges are very low and just got lower yesterday. Storage is dirty cheap these days too. More importantly, what difference does it make? Isn't that really Barry Dillers concern?