• Sharebar

Tivo began as a disrupter in the Television industry landscape. It was a game changer and an amazing one at that. Suddenly, you could record complete seasons of TV shows, pause your show and fast forward through ads. A whole world of options opened up that brought Television under the viewer’s control.

However, after making a big splash in this arena, it eventually resulted in cable companies incorporating DVR options into their own set top boxes. Today, Tivo is just a great product that never took off!

Would Aereo go the way of Tivo? Possibly yes, according to this Forbes article on how-the-networks-and-cable-companies-can-kill-aereo.

Aereo is a New York based tech firm that has been touted by some as a game changer. It streams broadcast television content to users over the internet, without paying a dime to the networks.

Is this legal, you ask? Turns out, it is! The company leases out a mini antenna to every consumer. This antenna is built and managed by Aereo(currently only in New York), for a monthly subscription fee from the user. Each Aereo user has exclusive access to his/her antenna and can subscribe to and watch live and recorded TV shows over their Phones and Tablets.

Consider this as a combination of Hulu or YouTube and BitTorrent - Aereo allows legal streaming of TV shows, only without any licensing agreement with the broadcast providers. This has been possible by taking advantage of a legal loophole. According to Aereo, the company is not breaching broadcasters’ copyrights as its antennas are individually leased to consumers, making the streamed content a “private performance” for each user(similar to someone owning a digital antenna and connecting to their television at home). So, instead of capturing a channel and streaming it to all their users (which would not be allowable legally), Aereo allocates a mini antenna to each user and captures the shows independently for each user!

In its endeavor, the business is not only backed by Barry Diller’s IAC but the company has stood the copyright infringement lawsuits that were brought upon it by CBS, NBC Universal, ABC and Fox as well. The failed lawsuits(the most recent one being in April 2013) have recently led NewsCorp COO Chase Carey to threaten to make Fox a subscription based service.

Quote:
We need to be able to be fairly compensated for our content. ……..we can’t sit idly by and let an entity steal our signal. We will move to a subscription model if that’s our only recourse.

While I admire the guts of a business in standing up to the industry bigwigs, I do not see this taking off as a successful, sustainable business model. For one, it stands on thin ground by basing its business model on the existence of a legal loophole.

But ignoring even that, do you think this is a disrupting technology – one that would change the face of the television industry ?

Or would it eventually be replaced by broadcasting networks incorporating Aereo’s business model into their own to provide online content directly to consumers?

Would Aereo end up the way that Tivo has?

Tag: 

Comments (3)

  • Lambie's picture

    It seems to me that Aereo is the rabbit and the broadcasting networks have become the turtle. It may seem that Aereo had them beat, but never underestimate the immensity of an old turtle.

    In other words, Aereo will win in the short run, but in the end it's not a permanent solution.

    Networks can corner and choke them out, but only if those lumbering fools can pull together to do it, and of course when revenues are at stake, they will.

    I would really like to see Aereo win, but it's a lost cause looking at it from your written standpoint.