CBS Threatens to Stop OTA Broadcasts if Aereo Remains in Business
posted Sunday Apr 14, 2013 by Nicholas DiMeo
After last week's appeal hearing, the over-the-air video streaming service, Aereo, won their appeal, we talked on our show about how this could change the media industry as a whole if everything stays in Aereo's favor. However, we didn't think the broadcasters would be so arrogant as to throw out idle threats like CBS has.
This week, CBS said they would have no problem in cutting off its free, over-the-air stream of its networking programming if Aereo isn't put to rest. CBS' Leslie Moonves said at the National Association of Broadcasters convention in Vegas that they'd have no issue in turning into a cable channel to combat these "illegal practices." Moonves added that CBS agrees with everything Chase Carey, from News Corp, had to say about Aereo's business.
We won't just sit idle and allow our content to be actively stolen. It is clear that the broadcast business needs a dual revenue stream from both ad and subscription to be viable... One option could be converting the Fox broadcast network to a pay channel.
For now, Moonves is only talking about doing this in the New York metro area only, however he said this would all happen if the revenue streams start to decrease. We can put aside the fact that Aereo has said they're expanding to two dozen more cities by the end of the year. So, there's a couple of things here. First, as we talked about last week, even when someone is using Aereo, the broadcasters are still making their money per viewer, which proves that, as mentioned before, these TV execs have no clue how new, Internet-based operations work. Second, nobody has said a single word to Slingbox, whose product pretty much resembles that of Aereo's business model, except Aereo is handling the hardware for you so you don't have to set up the box or antenna anywhere.
Lastly, at the end of the day, if one were to really consider this decision from a financial standpoint, there is a huge majority of people who use the free, over-the-air broadcast of companies like CBS because they cannot pay for cable or satellite TV. Making a move to switch to a cable channel could, in certain cities, quickly erase over half of the current viewership, especially in places like the greater Tampa, Florida area, where there are a high number of mobile home parks and half-year residents, who watch only channels they can get on their antenna.
So, is this a path CBS, or any other broadcast should take? Or are they merely talking a lot but actually saying nothing at all? Do you think any action will be taken? To me, it feels like the broadcasters are a little bit scared of the not-so big, bad wolf called the Internet. If people can watch more channels in more locations, isn't that better for everyone involved? Let us know your thoughts to those questions in the comments below.