Aereo — a start-up funded by ex-Fox CEO Barry Diller’s IAC that streams the local broadcast signals of TV stations via the Web to iPhones and iPads for an US$12 monthly fee — won a court victory this week. It may only be temporary, but “threatens to undermine the delicate contractual structure of American television in a way that could give Apple a boost,” says “Fortune.”
Aereo (https://aereo.com) has come up with a way to stream local television stations to paying subscribers on the Internet, “potentially forming a new cord-cutting threat for cable and satellite distributors.” The company recently unveiled the service which went ive in New York City only (for now).
Aereo canl stream all programming of the major networks (ABC, CBS, Fox, NBC) and include an Internet-powered digital video recorder. No cable or satellite channels are offered. However, the service will only work as long as users are in the local market.
“If you have this and you have Netflix, you absolutely have the ability to not have a standard cable subscription,” says Chet Kanojia, the founder and CEO of Aereo.
Barry Diller, who created the Fox network 30 years ago and now wants to free it and other networks from the chains of what he calls the “closed cable-broadcast-satellite circle,” is one of the financial backers of Aereo. He told the “New Yokr Times” that it “pries over-the-air broadcast television out of that closed system.”
BTIG analyst Rich Greenfield told clients that “if Aereo is, in fact, legal, we find it hard to fathom that the traditional (pay TV) bundle will survive and that retrans payments will continue to scale as broadcasters are expecting them to over the next several years.” However, Greenfield acknowledges that broadcasters likely will take Aereo to court for selling their services without paying retransmission consent fees.
However, even before it began operations, Aereo was sued by several big content providers, including CBS, NBC, Disney, News Corps and WNET, who argued they would suffer “irreparable harm,” if Aereo were allowed to sell their copyrighted material without sharing the revenue. They sought a temporary injunction that would have shut Aereo down. On Wednesday, Judge Alison Nathan denied the injunction. The case now goes to trial.
So how does it affect Apple?
“For starters, it allows Apple customers in New York City to get local TV content on their iOS devices — bringing them one step closer to being able to ‘cut the cord’ — i.e., get access to a full complement of TV entertainment without paying a monthly cable or satellite bill,” says “Fortune.” “But in the long run — assuming a jury finds in Aereo’s favor — it could reboot the negotiations with content providers that Steve Jobs started but was unable to complete before his death. Jobs’ dream for Apple TV was to provide, for a monthly fee, the best of television without the rest of the 500 channels that most viewers never watch.”
For more info go to http://tech.fortune.cnn.com/2012/07/12/apple-is-a-winner-for-now-in-the-aereo-online-tv-ruling/?section=magazines_fortune&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmagazines_fortune+%28Fortune+Magazine%29 .