November 22, 2013
Aereo-backer Barry Diller has stated that the online service may grow to the point that 35 percent of U.S. households subscribe. However, this is largely contingent upon the service’s ability to overcome the legal challenges it currently faces from broadcasters. Individuals in their mid- to late-twenties aren’t highly inclined to pay $100 per month for TV cable packages, rendering Aereo’s $8 package highly attractive, according to Diller.
“Aereo, based in New York, offers broadcast channels such as CBS and NBC to subscribers over the Internet in nine U.S. cities,” explains Bloomberg. “Media companies including Walt Disney Co. and 21st Century Fox Inc. have sued the startup, saying it’s reselling their content without permission. Aereo argues that it doesn’t need to compensate the networks because it receives television signals fairly using clusters of antennas.”
“This closed circle of broadcast and cable and satellite is going to break up,” said Diller. “It’s not going to maintain itself in the next decade.”
Broadcasters have asked the U.S. Supreme Court to declare Aereo illegal. However, federal judges in both Boston and New York have granted the startup permission to operate, and it is spreading to other markets.
“We are putting more money in, aiming to eventually roll out across the U.S.,” said Diller.
“Aereo got a boost on November 12 when U.S. Senator Jay Rockefeller introduced a bill to help online video services and Aereo’s antenna-based system challenge cable providers and broadcasters. Rockefeller, a West Virginia Democrat who serves as chairman of the Commerce Committee, said he wants consumers to benefit from lower costs and increased choice,” reports Bloomberg.
According to Rockefeller, the bill would “give consumers the ability to watch the programming they want to watch, when they want to watch it, how they want to watch it, and pay only for what they actually watch.”
Despite these efforts, the bill is likely to face opposition in Congress and from media companies, according to Jeffrey Silva, a Washington-based analyst with Medley Global Advisors.
Diller, who has been in the television industry for a long time and helped form the Fox Network, is not shocked by the opposition to Aereo. If he were still a broadcast executive dealing with Aereo, “I’d sue ’em,” he said.