Wednesday, April 23, 2014

Aereo Just A Remote Antenna And Cloud DVR

As the Supreme Court listens to arguments regarding the Aereo service, many also speculate what a ruling either way will do to future cloud based services.  Broadcasters are concerned that this disruptive model will kill is license fee revenue model, although it would also increase its viewership reach.  Aereo argues that it is simply selling a technological service to receive and transmit free programming. 

Today's Business Insider article argues that a ruling against Aereo will also negatively effect the future of cloud based services.  Previous rulings have enabled cloud based DVR service; in fact, Cablevision was the cable operator behind an N-DVR push.  And when you look at the basic model, Aereo is simply leasing remote antennas rather than placing one on your roof and adding enhanced cloud based DVR capabilities in exchange for a monthly fee.  BI's argument, and a compelling one is this: "Make no mistake, large media companies hate technical innovation. TV and movie studios also believed that DVRs and VHS cassettes would kill their businesses. In fact, they enhanced them. Aereo is simply a remote personal video recorder."

Should Aereo lose its court case, it claims no "Plan B" and would cause an end to its business.  But it is argued that such a ruling would be counter to previous rulings enabling cloud based content capture and transmitting services.  And would lead to "Any company whose business model relies on letting viewers store copyrighted material on a remote server for later viewing could find itself suddenly illegal" including services like Dropbox.  The concern is that a ruling would significantly alter further innovation for all cloud based services.

Broadcasters argue that it will kill their business model although they have argued that before with the rise of cable, VHS, and DVR services. Some have threatened to move from over the air to a cable based model.  While they argue the possible loss of license fees, I am skeptical that cable operators will move to an antenna based system as a result so no significant loss of revenue.  I believe that as long as broadcasters use over the air to transmit, consumers should be allowed to lease antennas from Aereo or other to capture and stream programming.  If we can do it with a DVR why not with Aereo. 

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