Aereo Prevails

Posted by Sam Churchill on

Aereo, the online television service backed by Barry Diller, will expand from New York to other large U.S. cities following a favorable court ruling, reports Bloomberg. Aereo captures broadcast signals from New York City and streams them to devices such as Apple’s iPad, without paying for the programming. Because each user has their own antenna and can switch channels (using internet connectivity), a U.S. district judge ruled this week that Aereo was operating legally.

Aereo uses tiny antennas to pick up free over-the-air broadcast television signals in New York City and then transmits the video to its customers over the Internet. Customers have to pay $12 per month to buy access to an antenna, which allows them to watch major network television on their mobile devices and computers.

Today’s decision shows that when you are on the right side of the law, you can stand up, fight the Goliath and win,” said Aereo CEO and Founder Chet Kanojia.

The ruling could upend the economics of broadcast television, explains Bloomberg. CBS, Comcast, NBC, News Corp. and Walt Disney’s ABC are all plaintiffs to the lawsuit. The broadcasters receive “retransmission consent fees” from pay-TV operators such as Time Warner Cable for the right to rebroadcast the free-to-air signals to their subscribers.

Broadcasters, of course, get their spectrum free from the FCC. They would like to charge for mobile television, but can’t seem to find any takers. Meanwhile, the broadcast networks continue to pursue a copyright lawsuit against Aereo.

Last weekend Dish users stopped getting AMC channels after the two companies couldn’t agree on a new contract — but AMC says they’ll stream this weekend’s premiere of their hit show “Breaking Bad” online for impacted Dish users, although it may be a one-week only offer.

The ability to stream TV shows cuts both ways for programmers like AMC. Distributors like Dish have complained about the online availability of shows in negotiations over new contracts. One of Dish’s competitors, DirecTV, this week pointed its subscribers to online venues for Viacom-owned shows amid a separate dispute with that company; Viacom responded by taking down episodes of some shows from Web sites.

Posted by Sam Churchill on Friday, July 13th, 2012 at 8:06 am .

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