Add CBS chief executive Leslie Moonves to the list of network bigwigs who see Aereo as a well-nigh existential threat.
According to Variety, Moonves raised the possibility Tuesday that CBS would abandon its over-the-air broadcasts if the Supreme Court ruled that Aereo did not violate the networks' copyrights. Speaking at an investor conference, Moonves explained his reasoning this way: "If the government wants to give them permission to steal our signal, we will find another way to get them our content and get paid for it."
His remarks were reminiscent of those made last year by a top executive at News Corp., who said the company might yank the Fox stations off the air and turn them into cable TV channels.
To which I say, "Sezmi?"
For those of you with short memories, Sezmi was a well hyped, ambitious start-up that wanted to sell an extremely low-cost alternative to cable. For $20 a month, subscribers would get about two dozen cable networks delivered over the air, along with access to online movie rentals and a personalized channel guide and program recommendations; they'd also have to buy a Sezmi digital video recorder and a sophisticated indoor antenna for tuning in local broadcasts. For $5 a month, they'd get just the online video-on-demand, the channel guide and recommendations.
I liked Sezmi a lot, but evidently not many other people did. It pulled out of the pay-TV business in September 2011, about a year and a half after its commercial launch, having failed to expand its full service beyond its debut city, Los Angeles.
The big problem for Sezmi is the same for Aereo: there simply aren't enough people out there who want less than what other pay-TV operators offer. Sezmi could keep its prices low by not providing some of the most expensive -- and popular -- cable networks, including ESPN, HBO and A&E. Aereo ups its value proposition by enabling people to watch local TV stations' shows through the Internet, making them available anywhere a customer can find a screen and a WiFi connection. But for people who aren't compelled to watch a program when it airs, they have much of that capability already, thanks to Hulu and the broadcast networks' websites.
So the natural audience for Aereo seems to be a slender group indeed: people willing to pay for a programming lineup that consists of free TV and little else, delivered through the Internet. Maybe they yearn for live TV feeds online, or maybe they have terrible over-the-air reception but don't want to sign up for even the cheapest tier on cable. Regardless, Aereo doesn't seem to be stealing customers away from pay TV operators (which, unlike Aereo, pay CBS, Fox and the other broadcast networks for retransmission rights) so much as it's capturing another segment of the market.
In other words, if Aereo viewers figured into Nielsen's calculations, broadcasters might actually come out ahead.
The real threat that Moonves sees, I suspect, isn't Aereo. It's the legal precedent Aereo would set, which would invite other pay-TV operations to deliver the broadcasters' channels without paying retransmission fees. Hence the apocalyptic rhetoric.
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