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Time Warner Cable CEO says it could copy Aereo's business model in the future

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Time Warner Cable logo (1020)
Time Warner Cable logo (1020)

The television broadcasting industry has been up in arms over the actions of a small startup called Aereo, but it may have bigger things to worry about in the future. Aereo's business of capturing over-the-air broadcast television signals and delivering it to subscribers over the internet for a fee has caused major broadcasters such as CBS to threaten lawsuits and other legal action to prevent what they claim is theft of their content. So far, Aereo has only been available in New York City with expansion planned for Boston this month, but the bigger fear for broadcasters is for cable companies to start doing the same thing, and that might just happen.

"If it is found legal, we could conceivably use similar technology."

Speaking to The Washington Post on Thursday, Time Warner Cable CEO Glenn Britt said "what Aereo is doing to bring broadcast signals to its customers is interesting," and "if it is found legal, we could conceivably use similar technology." That's exactly what the National Association of Broadcasters fears, because as it stands now, cable companies pay hefty fees to broadcasters for the right to resell content to their cable subscribers. If the cable companies shift to capturing free, over-the-air signals and delivering the content to their customers over the internet, broadcasters would lose a significant revenue stream.

Britt also mentioned that while Time Warner Cable has no concrete plans to use technology similar to Aereo's, and it is just watching the legal battles as they unfold, the current system of cable companies bundling hundreds of channels into fixed packages has to change. "The structure needs more flexibility," said Britt. "There are fellow citizens who are struggling financially and can’t afford large programming packages. We want the ability to offer those customers smaller, more affordable packages." Options like Aereo's may be what the cable companies use to bring these lower-cost, smaller packages to market.

But the NAB was quick to respond to Britt's comments. Executive vice president Dennis Wharton quipped to The Washington Post: "Forgive me Glenn Britt’s hypocrisy over rising cable rates. Time Warner Cable owns regional sports channels that charge viewers as much as $5 per subscriber per month. The notion that Time Warner Cable has suddenly become ‘pro-consumer’ is laughable."

"The notion that Time Warner Cable has suddenly become ‘pro-consumer’ is laughable."

We are still at the very early stages of what looks to be the next wave in television, but it's interesting to see how all the players are lining up. Internet-based television has the potential to offer better service at lower prices for consumers, but it may very well get killed in its infancy if broadcasters get their way.