Aereo vs Network TV

[Mr Peabody]

Aereo, networks set up for a fight: Aereo, a Web start-up that uses antennas to pick up broadcast signals for the iPad, is facing a fight from television networks who say the service’s business model is tantamount to content theft.
Networks have been unable to stop Aereo in court, and Fox television’s parent company said Monday that it might consider taking its shows off of broadcast television and air them solely on cable as a result.
“We won’t just sit idle and allow our content to be actively stolen,” said Chase Carey, president of News Corp., which owns Fox Television, The Washington Post reported.
For its part, Aereo says that its technology allows consumers to access shows on the public airwaves; the service also gives customers the option to pause and record broadcasts or save TV shows shown live for later viewing.
Aereo, The Post reported, is planning to expand its service to Washington and 21 other markets this summer.
(Aereo is backed by media mogul Barry Diller, chairman of IAC/Interactive Corp. Diller is a member of The Washington Post Co. board of directors.)

I don't know enough about how this works to pick a side, on one hand if Aereo charges, it's stealing, unless networks get paid like satelite providers have to; on the other hand, if it's free, I don't see any difference whether you watch on a traditional TV or an Ipad. I'm sure there must be a fee involved or else why start the company.

[Smokey]

Networks have been unable to stop Aereo in court, and Fox television’s parent company said Monday that it might consider taking its shows off of broadcast television and air them solely on cable as a result.“We won’t just sit idle and allow our content to be actively stolen,” said Chase Carey, president of News Corp., which owns Fox Television.

So does that mean anybody with an antenna on their roof is a thief. What a ridiculous argument. Network are just afraid of somebody budding in their monopoly business.

[JoeE SP9]

How does Aereo make a profit unless they charge a fee? If they charge a fee they have an obligation to give some of that to the networks.

[Sir Terrence the Terrible]

How does Aereo make a profit unless they charge a fee? If they charge a fee they have an obligation to give some of that to the networks.

This is the crust of the Networks argument. If they charge cable and the telecoms licensing fees for that medium, Aereo should pay the same licensing fees for capturing broadcast signals and rebroadcasting them.

[Mr Peabody]

I wonder why the networks aren't getting any traction in court over the issue.

[Smokey]

I wonder why the networks aren't getting any traction in court over the issue.

Because networks are using public air ways

[Sir Terrence the Terrible]

I wonder why the networks aren't getting any traction in court over the issue.

I think the judge wants to hear the merits of this case because so much money is involved. It will also set a major precedent as well.

[Sir Terrence the Terrible]

So does that mean anybody with an antenna on their roof is a thief. What a ridiculous argument. Network are just afraid of somebody budding in their monopoly business.

Smoke, I ought to slap you on the back of the head. Programming for Broadcast is licensed for broadcast, and advertisers pay to keep it free. These guys are reselling the broadcast feed without paying retransmission fees like cable and the telecoms do.

Content is licensed by the studios that create them as use specific. If you are a second party rebroadcaster you must get a broadcasting license for all of the content you receive.

Fox is not the only network talking of going cable if the networks lose this in court. We got a note from Disney saying that they will take ABC to cable as well if they lose this fight. In the end this will be a huge blow for free over the air television, and Aereo will end up with nothing to broadcast.

[Smokey]

Smoke, I ought to slap you on the back of the head. Programming for Broadcast is licensed for broadcast, and advertisers pay to keep it free. These guys are reselling the broadcast feed without paying retransmission fees like cable and the telecoms do.

But unlike cable and telecom companies, local netwoks are using public spectrum airways which are worth billions of dollars to transmit their signal for free. And since the signal is free, I don't see any difference between picking up local channels on big antenna or dime size antenna which Aereo uses.

Fox is not the only network talking of going cable if the networks lose this in court. We got a note from Disney saying that they will take ABC to cable as well if they lose this fight. In the end this will be a huge blow for free over the air television, and Aereo will end up with nothing to broadcast.

I doubt very much if that will ever happen. By going to cable, they will lose consumer base which use to get network for free over the air. And since they are advertise supported, it makes no economical sense

[Sir Terrence the Terrible]

But unlike cable and telecom companies, local netwoks are using public spectrum airways which are worth billions of dollars to transmit their signal for free. And since the signal is free, I don't see any difference between picking up local channels on big antenna or dime size antenna which Aereo uses.

Smoke, step back just a bit because you are missing the point here. Broadcast Networks have to pay for content they don't produce everything by themselves. The way broadcaster get their money back is through advertising revenue, and content licensing fee charged to cable and the telecoms. Free off the air programming is largely underwritten by advertising revenue. If a rebroadcaster picks up a feed and charges the customer for receiving it without paying for a rebroadcasting licensing fee like cable and the telecoms do, then advertising revenue tanks and the networks lose money. You must purchase the rights to broadcast content the Networks have paid for. Free reception OTA is one thing(it is for the public good), Aereo is charging its customers to receive a feed they have stolen themselves. That is the problem.

I doubt very much if that will ever happen. By going to cable, they will lose consumer base which use to get network for free over the air. And since they are advertise supported, it makes no economical sense

Since you don't work in this industry, I can understand your doubt. However, there are things you don't understand for that very reason. Network television is a billion plus dollar industry. If Aereo can pop up a receiving antenna and charge customer for receiving that feed, then the cable companies and telecoms will be able to do the same thing. If you want your Network to remain viable and profitable, the only way to stop this and maintain the value of the network is put your content behind a paywall. They are not going to allow the content they paid for to be stolen and resold. This is serious business Smoke, you cannot dismiss it like you are doing.

[E-Stat]

Free off the air programming is largely underwritten by advertising revenue.

Is Aereo stripping off the advertising?

[Feanor]

Smoke, step back just a bit because you are missing the point here. Broadcast Networks have to pay for content they don't produce everything by themselves. The way broadcaster get their money back is through advertising revenue, and content licensing fee charged to cable and the telecoms. Free off the air programming is largely underwritten by advertising revenue. If a rebroadcaster picks up a feed and charges the customer for receiving it without paying for a rebroadcasting licensing fee like cable and the telecoms do, then advertising revenue tanks and the networks lose money. You must purchase the rights to broadcast content the Networks have paid for. Free reception OTA is one thing(it is for the public good), Aereo is charging its customers to receive a feed they have stolen themselves. That is the problem.
...

Sorry I'm a bit late to this discussion; we don't have Aereo in my jurisdiction.

On the face of it, Aereo is just providing an additional service with respect to publicly broadcast material. The justification for their customer fee is just that they are providing an additional service.

Advertising pays for TV content: period!! Arguably Aereo extends the viewership thus the value of advertising that the networks places and for which they get paid. Actually the same is true for cable/satellite distribution. So finally the issue is whether networks are getting more advertising revenue on account of more viewership, not how the content is viewed.

Maybe the real problem is that the networks are gouging the cable/satellite providers, not that they ought to get money from Aereo. I have satellite and pay my provider a lot for their service; my provider argues that part of their cost is paying the networks for content. I feel gouged because I'm not only paying for satellite delivery but also a second time for content because I still have to sit through the ads.

If networks are paid according to advertising, maybe the cab/sat companies and Aereo ought to get content from them for free; maybe the networks should even pay them. Ultimately money comes from the viewers: how money is divided up along the distribution chain is a matter of power, and power is partly markets and technology, and partly laws and court decisions: it is not a matter of fundamental justice.