Aereo’s Supreme Court Case Could Change How We Watch TV
A significant bout between TV content providers and one technological boat-rocker, Aereo, is taking place in the Supreme Court. The case opened Tuesday, April 22, and could have an impact on how content providers make a sizable chunk of their revenue, or how Internet companies transmit media.
For the past few years, Aereo has been devising and expanding a network of antennas that can pick up all the channels that companies like Comcast’s (NASDAQ:CMCSA) NBC, Disney’s (NYSE:DIS) ABC, and News Corp’s (NASDAQ:NWSA) Fox transmit over the public airwaves, and from there Aereo sends the programming over the internet to customers. All three of the aforementioned content providers are involved in the case against Aereo, as well as CBS (NYSE:CBS), according to Newsweek. It’s not that retransmitting is something new — cable TV providers do it all the time — it’s that normally the content providers get paid handsomely for the right to retransmit.
As reported by Bloomberg Businessweek, broadcast industry analyst group SNL Kagan estimates the value of retransmission fees for broadcasters will be $4 billion this year. In 2012, the fee accounted for over 10 percent of broadcasters revenue — that’s a large chunk Disney, News Corp, Comcast, and CBS could lose if Aereo grows or others follow its lead. Naturally, it makes sense for the broadcasters to stand in opposition of Aereo, which doesn’t pay a cent when passing the broadcast content on to consumers. Aereo Founder Chet Kanojia believes the way his service operates exempts it from the fees, and he has put in the effort to build an infrastructure to earn that exemption.