A Win-Win After the Supreme Court Loss for Aereo?

By Bob Wallace July 18, 2014

Having lost its Supreme Court case vs. the big broadcasters who wanted over-the-air (OTA) TV streamer Aereo erased from the video industry, it now appears that both sides stand to win big if the company receives the full clearances it needs to become what it long argued it wasn’t – a cable TV service provider.

A double victory rising from a devastating Supreme Court ruling is unprecedented, but could be reality for Aereo, which if it pays retransmission fees for broadcaster content that it refused to do as part of its business plan, could greatly help itself and its once bitter enemies.

This scenario emerged and was given legs this week when longtime CBS Corp. CEO (since 2006)Les Moonves, reportedly said he would be open to talking with Aereo about the onetime archrival paying some fees to CBS for its content for distribution using its innovative antenna technology and its cloud DVR feature.

The comment comes from the same exec that had threatened to move its over-the-air TV programming to cable channels to keep Aereo from continuing to offer CBS TV content if the upstart won the Supreme Court decision. What a difference a month makes!

It remains to be seen if CBS, which knows plenty about online streaming, really needs Aereo. Does the media exec believe in the viability of Aereo? Do he and his counterparts believe the OTA viewer opportunity has been adequately covered/addressed? There are lots of unanswered questions.

Rescue Me

Beyond saving Aereo from a TV time capsule of 2014, such a partnership if joined by other broadcasters, would provide these huge content distributors a viable means to grow when it comes to streaming their content over the web. They would also reach a sizable consumer base essentially uninterested in paying for existing cable TV packages and their dozens if not hundreds of channels.

The broadcasters could use Aereo as a business, marketing and packaging test lab and proving grounds to get a far better understanding of what consumers want – and don’t want – in a pay-TV service as well as what they are and aren’t willing to pay for such a package.

Aereo has already done the lion’s share of the work by proving its advanced antenna technology and launching an attractively priced service that attracted hundreds of thousands of customers in a fairly limited U.S. city deployment. Leveraging these core business and technology achievements would amount to light lifting for broadcasters.

It’s believed that Aereo could re-offer its service without huge price hikes or material changes that would scare its loyal past – and potential – customers away.

CBS and Moonves – Beyond OTA Broadcasting

CBS Corp. is far, far more than a broadcasting company, and Moonves is much more than a broadcaster chief.

The chief oversees all operations of the company, which the media giant’s website says includes: the CBS Television Network, The CW (a joint venture between CBS Corporation and Warner Bros. Entertainment), CBS Television Studios, CBS Global Distribution Group (CBS Studios International and CBS Television Distribution), CBS Consumer Products, CBS Home Entertainment, CBS Films,  CBS Interactive, Showtime Networks, CBS Sports Network, TVGN (a joint venture between CBS Corporation and Lionsgate), Smithsonian Networks, Simon & Schuster, CBS Television Stations, CBS Radio and CBS EcoMedia.

And Moonves, as you might expect, is far from a single-discipline CEO. His bio says he came to CBS in 1995 as President of Entertainment, after serving as president of Warner Bros. Television, where his team developed hit shows like “Friends” and “ER”. Once at CBS, Moonves and his team took the Network from last to first place in the ratings, launching hit shows like “Everybody Loves Raymond”, “Survivor”, and “CSI: Crime Scene Investigation”.

Moonves was promoted to President and CEO of CBS Television in 1998, and became Chairman in 2003. He was later named Co-President and Co-Chief Operating Officer of Viacom and Chairman of CBS in 2004, overseeing domestic and international broadcast television operations as well as its radio division and outdoor advertising operations. In 2006, when Viacom split its businesses into two publicly traded companies, Moonves was named President and CEO of the newly formed CBS Corporation.

The Bottom Line

So why is all this important/relevant and what does it mean? Moonves is a visionary and an innovator, while Aereo is a company with an innovation-fueled vision that now needs to be adapted to advance.

Reality Check

Of course all of the above presupposes Aereo receives the categorization and legal approvals, etc. needed to operate as a cableco, which is far from guaranteed. Even more important is whether Moonves is sincere in considering partnering with the OTA TV streamer, or just talking. This is the lynchpin in the scenario above because without that from the CBS CEO and interest from other broadcasters, there is no resurrection of Aereo’s popular, innovation-driven service.

Stranger things have happened, so stay tuned. And with constant, seemingly delay change in the ever-expanding TV/video industry, where more than less is best labeled TBD. The final outcome for Aereo is still in question. Whether broadcasters can benefit from Aereo is not.




Edited by Adam Brandt

Founder, Fast Forward Thinking LLC

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