Win or lose in the Supreme Court, Aereo as we know it won’t last

I wouldn’t put money on any particular outcome from the Supreme Court’s review of the Aereo case given how flummoxed actual experts seem to be by the question (although as I noted in my recent Weekly Update I wouldn’t be shocked by a ruling against Aereo and an opinion that finds some way to preserve the result, if not the reasoning, of the Cablevision cloud-DVR case). But even a clean victory for Aereo isn’t likely to buy the company much beyond a little more time before it needs to find a buyer or be overtaken by the very forces of disruption it would unleash.

Aereo CEO Chet Kanojia says there is “no plan B” in the event of a loss at the Supreme Court. A loss would mean the end of Aereo. But it wouldn’t mean the end of real-time streaming of broadcast TV content. Far from it. Live broadcast streaming is coming, if not from Aereo than from someone else. The real question at issue in the Aereo case is not whether but by whom?

Kanojia blanches at descriptions of Aereo likening it to a “Rube Goldberg” contrivance, insisting Aereo’s system of mini-antennas and cloud-DVRs is “the only rational architecture that exists,” for viewing live broadcasts online. But that’s so only if your starting point is the Second Circuit Court of Appeal’s legal reasoning in the Cablevision RS-DVR case. It’s an inherently inefficient way of doing live streaming that Aereo is already having trouble scaling to meet demand. If you had clear license to transmit broadcast programming over the internet without needing the legal protection of the Cablevision precedent that’s not the way you would do it.

And therein lies Aereo’s real problem. If it loses in court it’s done. But even if it wins there’s nothing to stop broadcasters themselves from eventually providing streaming access to their broadcast signals, potentially at no cost to viewers. It’s simply a matter of time before the technological infrastructure is in place to provide universal live streaming access and to do it much more efficiently than Aereo can. It might look something like Tablet Television, which uses an ATSC dongle to turn tablets into digital TV receivers, or it might look something like LTE multicasting (a.k.a. LTE Broadcast). But it will be scalable and robust in a way that Aereo and other unlicensed services working around the margins of the Cablevision decision will have a hard time matching.

Elements of the necessary infrastructure are already being put in place, in fact. As I noted in a previous post, streaming service providers are ramping up their support of live streaming, while the MPEG-DASH standard for live streaming is already being deployed in mobile chipsets. Further down the line, support for simulcast streaming (with associated interactive applications) is being incorporated into the next version of the ATSC broadcast standard.

Pay-TV providers also have every incentive to add live streaming access to their existing services whether Aereo wins or loses, but especially if Aereo wins. And they won’t do it by aping Aereo, as some pay-TV executives have tried to suggest. They’ll do it by securing live streaming rights from broadcasters as part of broader TV Everywhere licensing deals. Those supposed threats to go-Aereo on the broadcasters is simply about gaining leverage in those negotiations, not escaping the retransmission consent requirement altogether. With the possible exception of CBS, the parent companies of the broadcasters have too much other, non-broadcast programming pay-TV providers need (ESPN anyone?) to risk cutting the retransmission cord. The result will be bundle that includes live streaming along with traditional VOD access to compete with Aereo’s broadcast-only service.

Aereo is a very clever idea, but ultimately an unnecessary one. It can never be as efficient, robust or scalable as a system built on licensed access to the content because it’s very inefficiency is its legal sine qua non. It may end up forcing broadcasters’ hand sooner than the broadcasters would like, but it’s not built to win in the long run.

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Sweeting

Paul Sweeting

Principal Concurrent Media Strategies

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