Will Networks Consider Cable or OTT Service to Combat Aereo?

CBS Chief Executive Officer Les Moonves said the network would consider launching its own over-the-top streaming TV service with other leading television networks if the Supreme Court rules that New York-based startup Aereo is allowed to continue reselling broadcast programming over the Internet without permission. The Supreme Court is expected to rule on the Aereo case later this year. “We are going to win either way,” Moonves said.

The controversial Aereo service uses thousands of dime-sized antennas to access broadcast signals without paying fees to the television networks. As the service expands to additional markets, its approach continues to raise questions regarding copyright and retransmission fees.

“Media companies including CBS, Walt Disney Co.’s ABC, 21st Century Fox Inc. and Comcast Corp.’s NBCUniversal are challenging Aereo’s practices,” reports Bloomberg. The Barry Diller-backed startup “is threatening the industry’s business model, in which cable companies pay the broadcasters for the right to distribute their programming, even though it’s available for free over the air through an antenna.”

“Broadcasters say a federal appeals court ruling favoring Aereo created a blueprint that might let cable and satellite providers avoid paying those retransmission fees,” notes the article. “Such payments are estimated to exceed $4 billion this year. Broadcast companies such as Fox have said they may convert to cable channels if Aereo isn’t shut down.”