Television broadcast over the air to a viewer's antenna is a "historical anachronism" that makes no sense. And with no control over how broadcast content is accessed, its availability will continue to tempt other services to capture and deliver TV signals to paying subscribers, similar to Aereo, an analyst with The Diffusion Group said in a blog post Tuesday.
"As long as OTA broadcasting exists, it will attract a never-ending string of entrepreneurs who want to make something out of nothing by bottling free TV content and selling it," wrote Joel Espelien, senior advisor at TDG. "To date, each of these efforts has run aground on some combination of technical, business, or legal barricades."
While Aereo succeeded in getting past the technology and funding hurdles of its antenna-to-DVR-to-consumer model, it did not surmount the ultimate legal barricade at the Supreme Court.
While saying that OTA broadcasting is on its last legs because 80 percent of U.S. consumers subscribe to some form of pay TV service, Espelien also wrote that broadcasters were threatened by Aereo because the SVOD provider "threatened to demolish" its retransmission-fee model.
"If it had won the SCOTUS decision, pay-TV companies would have copied the same technical infrastructure and refused to pay retrans fees," he wrote. "Broadcasters, in turn, would have either gone to Congress (again) or simply pulled all the valuable content from their free-to-air broadcasts and repackaged it as cable channels."
In fact, CBS Corp. President and CEO Les Moonves repeatedly threatened to take the network completely online rather than allow its signal to be streamed by Aereo.
In any case, Espelien wrote, the case has changed how broadcasters and other content owners value their product, and hasn't diminished a threat to pay-TV providers. Content owners "will control their own broadband video distribution," he said, meaning cable and satellite operators, already contending with a meteoric rise in retrans fees, may now also need to compete for audiences that were previously locked into their pay model.
For more:
- see this TDG post
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