Media

CBS to Aereo: talk to us, but bring your checkbook

Aereo CEO Chet Kanojia

Above: Aereo CEO Chet Kanojia

Image Credit: Devindra Hardawar/VentureBeat

In the aftermath of their Supreme Court disaster, where does Aereo go from here? It might head over to the office of CBS head Les Moonves.

Speaking at a tech conference today, the network head said that he was “willing to talk to them” about a deal — one that involved paying for shows, as opposed to their previous business model of streaming over-the-air programming from CBS and other networks without handing over a fee to the broadcasters.

“Aereo only has one option from here and that’s to compete as a Pay TV operator,” Forrester Research VP James McQuivey told VentureBeat.

The Supreme Court decision, reversing a lower court ruling in favor of Aereo, had suggested the company could be considered a kind of cable system, but it would have to get a statutory license to the programming.

Aereo has appealed to a U.S. District Court in New York, seeking the right to get that license — a position that, pre-Supreme Court, it had rejected. It had contended its capture of broadcasts was legally the same as subscribers picking up their own signal.

“If it chooses to compete using the broadcast content it currently has access to, it will have only a modest offering to give consumers,” McQuivey told us, “so in addition to negotiating with CBS, the new Aereo would need to pay for rights to the content owned by Viacom, NBC Universal, and many other cable providers.”

After the Supreme Court decision, Aereo announced it was suspending its operations as it figured out its next move.

“It’s not going out without a fight,” Parks Associates Research analyst Glenn Hower told us.

He pointed out that, before the court decision, Aereo said it had no Plan B. “Obviously, they do,” Hower said, “but it’s a very complicated Plan B.” He noted that one of the complexities is that most of the statutory licenses include DVR recording, but these probably don’t cover the kind of cloud-based DVR recording that Aereo offers.

If they do get a license, he said, “they’re not going to have a $7.99 [monthly] subscription” service, as it previously did.

This kind of offering might appeal to “cut-the-cord” types who only want a ‘Net broadband connection from some other provider, plus Aereo’s broadcast channels and limited kinds of other fare, he said, “but that’s a small market.”

Aereo could become “competitive with other Pay TV providers,” McQuivey predicted, “but [that] would probably come after eating some significant humble pie because one can assume that all of those providers would want to punish Aereo for its prior bravura during the negotiation process.”