Looking to do some last-minute campaign managing as the U.S. Supreme Court decides the fate of its business model, Aereo debuted a video on its YouTube channel Monday that outlines how the company has "reinvented TV antennas" and lets users access them "from the cloud."
Establishing that it actually uses individually addressable TV antennas to deliver broadcast signals to its subscribers over the Internet is the crux of Aereo's case. Of course, it would really help Aereo if its YouTube viewers included Sonia Sotomayor, Antonin Scalia, Ruth Bader Ginsburg and the rest of the High Court justices.
If they determine that Aereo's elaborate system of tiny individualized TV antennas is really just a work-around to stealing broadcast signals, the most disruptive threat to the broadcast retransmission fee structure probably will go away.
Conversely, a ruling in Aereo's favor could spell the end of hundreds of broadcast TV stations, which are now ever-more reliant on the retransmission money they receive from pay-TV service providers.
As analyst Mark Fratrik, chief economist at BIA/Kelsey noted recently, spot TV revenue is bumping along at about the same rate as real GDP plus inflation. Retransmission fees have become the real growth driver for broadcast stations. According to SNL Kagan, these fees have grown from roughly $200 million in 2006 to $3.3 billion 2013. They're expected to jump to $7.6 billion by 2019.
The ability for consumers to inexpensively receive on-demand broadcast signals outside the pay TV system, of course, will severely harm the position of broadcasters in negotiations with MVPDs.
A Supreme Court decision on the Aereo matter is expected by the end of June.
(Source: YouTube / Aereo)
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