Tuesday, April 9, 2013

Fox Network Considers Move To Cable To Stop Aereo

Aereo, as a disruptor in the TV landscape, has certainly created buzz.  Poised to help cable cord cutters to receive broadcast channels without a cable subscription, Aereo has discovered a work around that the courts have yet to disallow.  By building an antenna farm and offering a unique signal to each subscriber. Aereo takes free, over the air signals, repurposes and sells to consumers. 

The broadcasters are angry because they don't receive compensation for their signal while cable operators do pay them.  Success by Aereo could cause cable operators to renegotiate to also get these same signals free.  And so one broadcaster has threatened to change their business strategy to assure their license fee structure remains intact.

"In an Armageddon-like declaration that could unravel network TV, a top News Corp. executive said Fox could become a subscription service if courts don’t put a halt to the retransmission of its shows for free."  That means that Fox Broadcast Network would switch from a broadcast model to cable programmer.  And while it would assure a license fee, it would alter the local broadcast affiliate world.  Does each Fox affiliate build their own digital feed or does Fox simply do away with the DMA model approach that has served it since inception.  And most at risk would be programming, syndication and sports that are exclusive to the DMA.

Are these idle threats by Fox or has some real analysis gone into the notion of changing their business model?  Regardless, Aereo has put the fear of G-d into broadcasters, Fox and others.  They are disruptors in the truest sense of the word.