|Posted on July 12, 2012 at 6:45 PM|
Yesterday a federal judge, Allison Nathan of the United States District Court in Manhattan, just denied the temporary injunction sought by television broadcasting companies to force start-up streaming provider Aereo to stop streaming local television programming to it's customers. The entertainment and streaming industries are both watching these court cases very closely, as their outcome could potentially change the way consumers access their entertainment, causing a sort of deregulation of the current media distribution channels.
Despite this ruling, broadcasters still plan on pursuing their lawsuit against Aereo.
As mentioned before, a success story for Aereo could change the entire pay TV landscape. Consumers are growing increasing weary of the hefty monthly costs of subscription television from cable and satellite TV providers. Retransmission fees are one of the reasons why consumers are footing the bill. If Aereo wins this court case, they will essentially be providing a precedent for the elimination of retransmission fees for network television.
It's important to understand why Aereo thinks they can stream network content without paying these fees. If I decided I didn't want to pay Dish Network for the privilege of watching TV anymore, I could go out and purchase an antenna and capture the major networks like ABC, NBC, CBS and PBS for free (minus the cost of my antenna). The reason I might not be able to do this is that a large antenna might not be allowed in my community; or, I simply might live too far away to pick up the broadcast signals clearly, at a clarity and picture level that is worth it to me to go the free route.
But is it fair for some to be able to use an antenna and not me, if one of the prohibitions mentioned above stopped me from enjoying free TV? That's where Aereo provides an important service. They essentially "rent" and house an antenna for me, and then stream the content over the internet right to my computer at a clarity level that is worth the price point they charge. They can keep their subscription costs low (currently $12 a month in New York City) because they aren't paying the retransmission fees that cable and satellite TV pay.
Cord-cutting (the term that the industry is using for no longer relying on cable and satellite bundles for television service) is certainly a growing interest among consumers, but there are a few things keeping consumers from making a mass exodus. For starters, streaming libraries are still on the thin side for newer content. Entertainment companies who own the copyrights of the content put a steep price tag on the content, but give cable and satellite providers a price break (that's an entirely different article, looking at net neutrality issues and misusing the "most-favored-nation" status for price breaks). But Netflix - well, they have to pay top dollar.
However - a deregulation caused by an Aereo win could end up causing a domino effect on the copyright costs of content, especially if the entertainment companies realize that the so-called "mass exodus" to cutting the cord will not be stemmed, despite their best efforts. In other words, there may come a time when the scales are tipped, and entertainment companies realize it is worth it to lower the licensing fees placed on their content.
If I Was a Betting Person. . .
Well, that's what this website is all about, really. I am betting that the current business model cannot sustain itself, and that eventually this website will be a trusted source for consumers and even the entertainment companies and streaming providers . . . because we've watched the scenario play out in front of our very eyes, and made decisions based upon said scenario.
The Players Today
The plaintiffs in this court case included PBS, Fox, Tribune Univision, and CBS. And they vow to continue their fight. Can you blame them? They will have to adjust their entire business model around this brave new, consumer oriented world. The tides always shift between the consumer and the corporation. That's normal, and it shouldn't be despised. If the corporation didn't have something to work for, then why be in business. But at some point the consumer needs to get the upper hand. We may be seeing that shift right now . . .
Aereo said yesterday evening in a news release "Today's decision should serve as a signal to the public that control and choice are moving back into the hands of the consumer -- that's a powerful statement."