Aereo gets positive report on viewership as court OKs asset sale

While its 12 remaining employees are presumably packing up the last items from their offices before shutting off the lights, Aereo got a couple of pieces of good news before the year ended. The most important one: an okay from the federal bankruptcy court to sell off its assets. The intriguing one: its subscriber base grew 40 percent between December 2013 and June 2014.

Aereo, whose cash base fell to just $3.6 million after a Supreme Court decision in June caused the company to voluntarily halt operations, was given the go-ahead to sell its assets by a federal judge on Dec. 24 after it worked out a deal with broadcasters. The provider has about $20.5 million in assets, according to court documents.

Broadcasters, including ABC, CBS, Fox and NBC, that opposed Aereo's request to sell the equipment it used to operate its OTA-to-OTT service now have a say in the auction process.

The plaintiffs, who will receive weekly updates on the status of the sale process, can oppose any sale that they believe will allow Aereo to reemerge as a disruptive player--a primary reason that they protested the asset sale in the first place. They also have a voice in how Aereo prepares its assets for auction, such as when they scrub their servers--so that they can look into the activities of Aereo's customers during the period it was in operation. They'll be allowed to attend the auction, scheduled to take place in February.

Litigation between Aereo and broadcasters over how much the provider may owe in damages related to copyright violations will continue in a lower court, according to The Wall Street Journal.

Meantime a filing with the U.S. Copyright Office revealed that Aereo grew its subscriber base by 40 percent over a six-month period. Starting from the end of 2013 with just 78,000 subs, the provider tallied 108,000 subscribers by the time it halted its service in June 2014. Subscribers grew the most, by 20 percent, in its New York, Boston and Atlanta markets, a Wall Street Journal article stated.

While 108,000 paying subscribers is nothing compared to, say, Netflix's (NASDAQ: NFLX) massive domestic base of about 35 million subs, the growth rate is certainly worth noting. Whether it indicated an impressive marketing effort by Aereo, or an underlying need for its services, the provider's subscriber jump leaves open the question of how much demand exists for over-the-top linear television.

"It's no wonder the same broadcasters who sued Aereo have been raising concerns in bankruptcy court that potential buyers of Aereo's technology could use it against them and once again infringe their copyrights," WSJ's Shalini Ramachandran wrote.

While protecting their copyrights is well and good, broadcasters' deeper fears--of disruptive competition from OTT providers--may be realized anyway. Should the FCC succeed in creating new rules around how multichannel video programming distributors (MVPDs) are defined--a proposal that was approved just before Christmas--broadcasters' efforts to smash and scatter Aereo's technology would ultimately be futile.

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