Why Aereo Matters

Illustration for article titled Why Aereo Matters

Today, the Supreme Court will hear oral arguments in the case of the television networks versus Aereo, an innovative service that lets you stream broadcasts over the internet. How it's decided could define the future of television, and how we watch it.

While Aereo seems to be a logical evolution of live TV for the internet, it undermines the network business model—and it might also be illegal. CBS has even threatened to take its broadcast station off the air and go cable only if Aereo is allowed to keep it up. If it goes away, though, your most promising shot at cutting the cord goes with it. Here are the stakes, and how it might pan out.

How Aereo Works

Aereo's premise is both simple and appealing. The service lets you watch local broadcast TV stations over the internet, and record shows to watch later. It's essentially a digital TV antenna combined with a cloud DVR, except without the need for any specialized hardware. Aereo takes care of all of it for you in the cloud.


Using it feels like Hulu except you're watching live broadcast TV. You login, pick a channel, and watch whatever's on. If you'd previously set Aereo to record some shows, you can watch those, too. It's not cable, but rather the stuff that comes for free over the airwaves, so depending on which of the 11 available markets you're in, you have access to different channels.

Illustration for article titled Why Aereo Matters

In practical terms, Aereo has become the most important ingredient in the cord-cutter's cocktail, giving you access to live, appointment television—the Oscars, say, or major sporting events carried by the networks—along with DVR powers, all for far less than your cable bill demands. Combined with Netflix and Hulu Plus, you're pretty much home free. Which might explain why the networks aren't very pleased.

Broadcast TV Is Free For You But Costs Everyone Else a Fortune

It's not immediately obvious why Aereo should be so contentious; if you've got bunny ears, you can already grab the airwaves for free. Traditional antennas, though, are less reliable and convenient than a cloud-based rig, putting the onus on the individual customer to get the set-up working.


And while those individuals can watch ABC and Fox and whatever else they can pull down from the sky for free, cable, satellite, and fiber operators have to pay broadcast networks to retransmit your favorite live programming. As for streaming services, they're all paying, too. Hulu is partially owned by the networks that are suing Aereo, and it pays for the streams with advertising. Similarly, Netflix pays handsomely so you can binge watch entire seasons of network programming.

So this is why the networks have an issue with Aereo. Even though it charges its customers $8 per month, it doesn't pass a penny of that onto the networks. Even worse, it automates what used to be the niche, frustrating process of purchasing an antenna, positioning it just right, and hoping it held on through inclimate weather. It just plucks TV out of the sky and sends it to you.


Taking It To the Courts

Almost immediately after Aereo launched, ABC, CBS, NBC, an FOX all went after the company for violating their copyright. The biggies are trying to shut Aereo down by categorizing it as a "retransmission," which copyright law defines as a public performance of a work. That's what cable companies do; retransmit content to a broad audience, much like showing it in the town square. And they've got to pay to do it.


Aereo, on the other hand, claims its providing a private service. In fact, the company developed technology to explicitly bypass existing copyright law. Its data centers are filled with millions of tiny antennas, each dedicated to a single user. The dime-sized antennae grab the content from terrestrial broadcast frequencies, and it's all processed and beamed to you over your internet connection. Here's what they look like:

Illustration for article titled Why Aereo Matters

It's an incredibly clever technicality, and one that's held up so far. The networks have failed to convince lower courts that Aereo violates copyright, though it's unclear which way the Supreme Court might fall. The copyright issue is so central to Aereo's business that it petitioned the Supreme Court to hear the case, even though it had won in the lower courts. It wants to put the matter to rest once and for all. And if it loses, it may cease to exist once and for all.

What's at Stake

Aereo's death would be a huge blow to cord-cutters, or to anyone who's ever considered it . For those of us who don't actually own TVs—I'm one of them!—Aereo is a godsend. It's not the only way I can watch, but it's an easy, slick alternative to hooking up an antenna to my computer.


What's more, losing Aereo would stifle innovation. The networks are digging in their heels because the system works for them. If, however, it turns out out that Aereo is legal, they might be forced to come up with their own comparable solution. The WSJ reported that CBS is considering launching its own competing service for its broadcasts if Aereo wins. While the networks warn that Aereo could lead to a sad world in which all good TV is paid, the pendulum could swing the other way, and the industry might evolve to match the IP connected world we live in.

That's why Aereo is so important. Lose it, and we're still stuck tethered to a cable system that's broken and unfair. Keep it, and not only do we get choice in a way we haven't before, we get the possibility of an entire industry fighting for our attention, instead of taking it for granted. That's something worth fighting for.


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Aereo is clearly trying to take a technicality and drive a truck through it. It's not really any different then one person recording a show and then "sharing" it via Torrent - either way the original broadcaster doesn't get retransmission fees and return for the production/distribution of the product, whereas Aereo is taking somebody else's content and making money off it.

Intuitively, it should be a slam dunk. Aereo should lose.

That said, what they're doing is innovative and interesting and adds value, so I'm sure there's a middle ground they can come down to, given those factors.