If Aereo Wins, Broadcast Sky Will Not Fall

TVWatch

by Wayne Friedman, Yesterday, 2:46 PM

Every broadcast executive must mull one question over the next few months:  What if Aereo wins?

One veteran and well-regarded media agency executive/futurist -- Tim Hanlon, founder/chief executive officer of The Vertere Group -- doesn’t believe the industry will turn upside down.

“I believe the sky will not fall if Aereo is successful,” Hanlon told TV Watch. “If I’m a broadcaster right now,  the good news is there are number of ways broadcasters can survive and thrive.”

 

The broadcasters' case against Aereo, the Internet-streaming service, will go to the Supreme Court in the next month or two, with a possible decision occurring in June. Aereo’s premise is that all customers can have "digital antennas" assigned in getting broadcast signals. Broadcasters believe Aereo is violating copyright laws.  

 

If Aereo prevails, many analysts believe that other pay TV providers -- from DirecTV to Time Warner Cable to Comcast  -- will consider similar services to give consumers lower-cost TV entertainment. And they won’t paying anything for local broadcast signals.

 

But what if those signals aren’t exactly what they used to be?

“There could be a bifurcated marketplace,” said Hanlon.  The key comes from broadcasters’ owning premium content that viewers and marketers  desire.

 

A “free” broadcast service could contain basic programming with few frills. But there could be another version of broadcast programming networks,  a la cable networks -- highly valued, so that pay TV providers might want to buy them via subscription fees. Both kinds of services would still benefit from being advertising-supported.

 

More frugal-minded entertainment consumers will seek simple packages that Hanlon calls “good enough TV.”

Recently, Aereo tried to shift its legal argument towards the so-called "network DVR" issue that cable TV provider Cablevision prevailed upon a few years ago.

 

“It’s about innovation in media around cloud storage,” said Hanlon. “If consumers are allowed to buy antennas, if they are allowed to buy DVRs, if they are allowed to buy Slingboxes, there is likely no reason why consumers can’t legally lease all of this -- especially if you can buy it.”

 

Hanlon said the fundamental issue goes to the core question of what a broadcast network is these days. And another question: Can broadcasters now have it both ways?  For example, can they complain about commercial skipping from the likes of Dish’s AutoHop, while they also seek subscription fees like ad-supported cable networks from pay TV providers?

 

Maybe in a new way they can. But will a favorable Aereo decision “blow up” the broadcast business, as many have predicted? Not really.