Business

Copying Aereo could save cable companies billions per year — and they’re considering it

Image Credit: Aereo/ Illustration by Tom Cheredar

Broadcasters suddenly have a lot more reason to take Aereo down.

Companies like Time Warner, DirectTV, and Charter Communications are all mulling over ways to retransmit broadcasts, Aereo-style, in an effort to avoid paying billions of dollars in retransmission fees, as Bloomberg reports.

In other words, if Aereo prevails, cable companies are going to try their absolute best to copy it.

Aereo uses thousands of small antennas to capture broadcast signals, which it then transmits to subscribers via the Internet. But that retransmission process also means that the company doesn’t have to pay broadcasters for the right to reuse their signals — an issue said broadcasters are taking arms against.

To realize what’s at stake here, consider that broadcasters are expected to pull in as much as $6.1 billion in transmission fees in 2014. That’s double this year’s numbers.

Of course, the ability for cable companies to copy Aereo’s streaming model depends entirely on whether broadcast companies succeed or fail in taking Aereo down. In the latest update, broadcasters this month petitioned the U.S. Supreme Court to get involved.

So far, though, things look pretty good for Aereo, which has managed to endure just about every legal challenge thrown at it.

Still, even if Aereo wins, companies like Fox and CBS have already threatened to kill over-the-air access to their content. While it’s too early to say whether the they will follow-through on the threats, it’s clear that doing so would complicate Aereo’s business model very quickly.


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