Cable networks can make Aereo go the way of Tivo.
Tech start-up Aereo has been causing an enormous amount of trouble in Hollywood lately. The company offers users broadcast television, streamed to their Internet-connected devices, for a monthly subscription of $10. Of course the networks, claiming copyright infringement, have sued but a judge recently refused to grant a injunction against Aereo.
In response,
“We need to be able to be fairly compensated for our content. This is not an ideal path we look to pursue, but 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.”
Todd Juenger at Bernstein Research offers a compelling alternative. (Report here, subscription required.) He believes that the cable companies can hurt, and maybe even kill, Aereo in the same way they hurt Tivo.
In 1999, Tivo came out with a brilliant device that let you record TV shows on a hard drive and play them back whenever you wanted. There were plenty of pundits saying this would be a serious disruption to the television model and the panicked networks sued.
But Tivo didn't end television as we know it. Instead, the cable companies co-opted Tivo's technology and built DVRs into their set-top boxes. Now Tivo is the company that's struggling and the cable companies have a technology that helps them keep customers.
Juenger suggests that the real appeal of Aereo is not that it offers people a way to cut the cord (as many, including myself, have suggested). If people really wanted to watch broadcast TV without cable, it's easy enough to just buy a digital antenna.
Instead, he posits that the real appeal of Aereo is that it gives people the ability to watch live streaming TV on their tablets and phones. It's the TV everywhere aspect that is the real selling point.
If that's true, the cable companies could put Aereo out of business quickly by working harder to make TV everywhere a reality. You can already watch networks like
It wouldn't be easy. Juenger points out that the main challenge is the thicket of local affiliates and local ads. But if the networks, station owners and cable companies worked together toward this common goal, they could make it happen and give people one more reason to keep paying for cable.
Follow me on Twitter at DorothyatForbes.
