Photo: Wikimedia, CC.
Barry Diller, the media mogul behind Vimeo and Match.com, has gotten a federal judge to give him permission to market the Aereo, a tiny TV aerial for mobile phones, iPads and computers. The Aereo allows you to watch broadcast TV right on your phone or laptop.In one sense, all the Aereo does is turn your device into a regular TV with old fashioned rabbit ears, without the rabbit ears. (The rabbit ears actually live centrally inside Diller’s company so that you don’t have to have one on your device; they’re tiny and you can see them here.)
On its face, this seems like something broadcasters would love: Suddenly, everyone who has pulled the plug on cable and satellite TV is a new potential viewer for old-fashioned broadcast TV. Whenever there’s something important or good on the box—like the Super Bowl—the TV-less online masses will be tuning in just like everyone else.
(This device would have been awesome at a recent backyard barbecue I attended on the same day as the Belmont Stakes; my host was a cord-cutter and even though I had money on Paynter and Street Life I was unable to see the race.)
The problem for broadcasters is that Aereo also lets you record shows, watch them later, and, crucially, you can skip through the commercials when doing so. It’s yet another DVR-type ad skipping device.
Broadcasters need to be able to force viewers to sit through commercials. Which is why CBS, Comcast, NBC, News Corp. Fox and Walt Disney Co. ABC are suing Diller to put the Aereo out of existence.
The nightmare scenario for TV is this: With Aereo and Netflix and YouTube and Hulu etc., no one really needs a TV in their living room anymore. People can choose what they want to watch, anytime they want to watch it, often without the commercials. We’ve noted before that traditional TV—broadcast, satellite and cable—is facing en existential crisis right now as viewers tune out and go to their laptops and mobile devices instead.
Although Aereo can’t get cable channels like HBO, it weakens the cable offering by giving viewers an alternative way to get the big broadcast TV shows without going through cable or satellite.
Aereo’s one flaw is that Diller is charging users $12 a month to use it. That seems steep for otherwise free TV. But the pricing model can be easily fixed.
And when Diller gets that right—and if he continues to win in court—Aereo could be the device that sucks the value out of TV.
UPDATE: Aereo CEO and Founder Chet Kanojia SAYS: “This isn’t just a win for Aereo, it’s also a significant win for consumers who are demanding more choice and flexibility in the way they watch television.”
Here’s a video of the Aereo in action:
- THIS IS HOW A CARTEL WORKS: CBS Gets Higher Ad Prices Despite Falling Demand
- UH OH: New Nielsen Data Suggest People Aren’t Watching TV Anymore
- CHARTS: Why Audience Ratings Have Collapsed For Cable TV Shows
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.