Tuesday, April 15, 2014

Broadcasters Are Asking...What If

What if Aereo wins its case in the Supreme Court?  Certainly both Aereo and the broadcasters are wondering what happens once the case is decided.  For Aereo, they have announced in the media that without a Supreme Court victory, their business model will cease to exist.  And broadcasters are considering their options as well should they be on the losing side of this argument.

 While it is hard to imagine that broadcasters would drop their over the air signal, networks could consider converting to a cable model.  Then Aereo would be unable to acquire an over the air feed to retransmit.  Broadcasters could also consider selling direct to consumers its own platform of linear and on demand programming via the web.   Today, all offer shows and clips streamed through their own website or through Hulu or both.  Lastly, its  possible that broadcasters will do nothing to alter their signal. 

Through cable agreements, some broadcasters offer an authenticated streaming linear feed of their line-up to customers.  Cable operators like Comcast might just continue to pay license fees for the simplicity of the delivery of the signal, but would push back hard should broadcasters attempt to sell a streaming model directly.  I find it doubtful that cable operators would put together their own antenna farm unless they could justify economically a real cost savings. 

If I were to predict an outcome it would be that Aereo wins its Supreme Court ruling.  Broadcasters continue to license their signal and a full authenticated TV Everywhere model to cable operators, and so broadcasters continue to use the over the air airwaves.  At the end of the day, if broadcasters can show that more consumers are watching their programming, via cable AND Aereo, then they will continue to increase their ad rates and generate more advertising revenue.

And one day, should cord cutting start to take a meaningful bite out of license fee revenue, broadcasters will revisit the cable model and consider transitioning away from the over the air signal and freeing up airwaves back to the FCC for other new opportunities.