Thursday, June 27, 2013

Aereo Finds A Fourth Market

Cable operators are afraid of cord cutting.  As much as the percentage of customers dropping cable is low, the trend points to it growing at faster and faster rates.  Operators have struck license deals with networks to limit them from selling to OTT providers.  These deals have made it hard for OTT companies like Intel Media and others from gaining access to these same networks.  But Aereo has found an elegant solution; take broadcast signals from off air through antenna farms and offer their streaming signals to homes in certain markets.  No payments to the broadcasters and Aereo successfully aggregates well known networks into a reasonable priced package of online entertainment.  And despite lawsuit attempts, Aereo continues to grow. 

Aereo is already in three large DMAs, New York, Boston, and Atlanta.  "At the TechWeek Chicago event, Aereo CEO and founder Chet Kanojia announced that the company plans to launch its services in Chicago on Sept. 13."  Some broadcasters have threatened to change their delivery model to thwart Aereo from taking their over the air signals but so far no one has followed through.  Consumers taking the Aereo service still have to subscribe to a broadband service, most likely from their cable provider.  And at some point, cable operators will stop selling a broadband only service or switch to a usage type model to capture back some of that lost revenue from customers who have dropped cable service for Aereo. 

Perhaps too cable operators need to start offering their networks to online devices and provide a true TV Everywhere environment.  "Aereo is currently supported on iPad, iPhone, iPod Touch, Chrome, Internet Explorer 9, Firefox, Safari, Opera, AppleTV (via airplay) and Roku devices, but not Android."  That may not stop consumers from switching because of price, but it may slow down some cord cutting.  It will certainly help demonstrate the value of being a cable subscriber. 

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