We knew content providers were dead set against letting Aereo's web-based live TV streaming service see the light of day after they collectively filed suit against the company back in March. Comments raised in a federal court today only reinforce that volatile opposition, with several high-level network executives painting a doomsday scenario for the cable industry should Aereo be allowed to proceed with its plans. The statements came as part of an effort to obtain a preliminary injunction against Aereo, which would essentially prevent it from getting off the ground while court proceedings are ongoing.
Among the most outspoken critics was Matt Bond, executive vice president of content distribution at NBCUniversal. "It makes little economic sense for cable systems and satellite broadcasters to continue to pay for NBCU content on a per-subscriber basis when, with a relatively modest investment, they can simply modify their operations to mirror Aereo's 'individual antenna' scheme and retransmit, for free, over-the-air local broadcast programming," Bond said. "I know for a fact that cable companies have already considered such a model."
Aereo's "model" is based around users paying a $12 monthly rate for the ability to stream over-the-air broadcasts to HTML5-supported browsers on various devices without the need for any tuning hardware. The company accomplishes this by outputting content received by a fleet of mini antennas to its users. There's even DVR functionality built in. Networks warn that allowing this type of service to exist would devastate the modern TV industry: broadcasters would be less inclined to put up billions of dollars for the right to beam out live sporting events, they say, and retransmission negotiations that have proven testy at times would be even further bogged down in legalese. Broadcasters also claim that Aereo threatens their license agreements with services like Hulu and would effectively kill advertising revenue — networks say there's no viable way of tracking online viewership. These arguments seem rather hard to justify when you consider Aereo is extending the distribution of what's already offered for free. Still, what seems like common sense isn't always found to be legal. Zediva's DVD streaming business similarly skirted along the definition of fair use, yet a California court eventually sided with the MPAA and the service met a quick demise.
For its part, Aereo has launched a countersuit and backer Barry Diller has sought the aid of Congress in fending off the cable giants, accusing broadcasters of stifling competition in the online space with their heavy-handed tactics.