With the Supreme Court ruling that Aereo’s business model is illegal — that it can’t grab broadcast television from the airwaves and pipe them over the internet — the question is: what will happen to the fledgling live-TV-over-the-internet industry that Aereo represented?
One cable industry market research analyst is hopeful that it will not just survive but thrive and that Aereo’s technology, if not its business model, will help. So says Stephen Beck, founder of cg42, which recently released a study on the frustrations of U.S. cable company customers.
The cable companies were actually quietly rooting for Aereo. Although Aereo competed with them, if the Supreme Court ruled that it was legal, they might have copied its technology, they said. That would have saved them billions of dollars in fees they pay every year to broadcasters for the right to carry their TV channels over cable.
So Beck thinks that even though Aereo can’t continue to operate as is, the concept will be resurrected somehow.
BI: Is Aereo dead?
Stephen Beck: Aereo is far from dead. Ultimately, a small, 2-year-old company that had the potential to make a few waves, just got shelved and consumers are the ones to suffer as their choices are further curtailed. But this is very much the beginning of people questioning the business model of the cable companies — models that are highly frustrating and ripe for innovation, as we’ve seen in our recent study of 3,000 consumers of the top 5 cable providers.
BI: How would Aereo come back from this?
SB: Although its current incarnation isn’t sustainable given the Supreme Court’s decision, the technology it has built remains extremely valuable. Aereo is likely to continue looking for ways to monetise their assets as they evaluate next steps.
BI: Is it possible for other startups to offer live TV over the internet services?
SB: We do not believe that live TV over the internet is dead. We expect a wide range of companies to continue to innovate and experiment with new business models and customer experiences.
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