Why Aereo Matters to the Entertainment Industry

Guaranteed to continue challenging the legal side of tech and entertainment, controversial digital startup Aereo is still making headlines weeks after the Supreme Court ruled the company’s service illegal.

Aereo, which served 11 cities before receiving the boot from SCOTUS in June, used cloud-based technology to stream television programming to subscribers for a small fee. Instead of requiring in-home hardware, Aereo invested in myriad tiny antennae – one per customer - designated for remote user access. This model differentiated Aereo from other online streaming services as well as temporarily insulated it from restrictions placed on cable companies, such as having to pay retransmission fees to broadcasters.

Founders of the company recognized a growing niche of savvy consumers disenfranchised by cable TV providers’ high fees and spades of unwatched channels. The solution? Charge a lower rate (between $8-12 month) for public broadcast channels that viewers actually watch, and provide access to these channels directly onto subscribers’ smartphones and tablets.

The well-received service became such a hot button topic because it threatens the current business model of television viewership -- and broadcasters were perturbed at the potential of losing both retransmission fees (which account for up to 10% of their total revenue) and scores of viewers.

Although the highest court in the land ruled Aereo in violation of copyright laws, the spunky startup isn’t taking no for an answer yet; they’ve already designed a retaliation intended to turn the Supreme Court’s language against them. Aereo is asking for the first time to be defined as a cable company moving forward in order to gain a “compulsory license” and bypass the copyright laws they’re currently accused of infringing.

Whether Aereo makes a comeback as a company or not, there are plenty of other businesses eager to take their place in challenging traditional media. The day after the ruling, the chief executive of Simple.TV tweeted that all former Aereo customers were welcome to “join the Simple.TV Family.”

As broadcasters feel the heat to change up their business model, consumers will benefit from better options for the media they’re not going to stop asking for. History has proven that even in tight economic times, the public is willing to pay for entertainment -- they just expect to do it on their terms.

“Television is a castle filled with money,” said Rishad Tobaccowala, chief strategy and innovation officer at Vivaki, in a New York Times article. “People are trying to get into that castle and take some money.”

The whole case illustrates a drastic shift in the status quo of media consumption. An entire generation of viewers is moving away from the traditional television model, opting instead for internet-based viewing that provides simpler access and more cost-effective solutions. This phenomenon, known as cord cutting, is costing pay-TV providers hundreds of thousands of customers by the quarter.

The exciting thing about companies like Aereo is that they’re shaking up an industry that has long been stuck in a dated business model. The potential for more viewers, smarter broadcasting, better content and higher revenue is within reach, but it’s going to take innovative minds to push the industry forward.

If you think you have what it takes to challenge and change television, look into the broadcasting jobs, production jobs and television jobs available on 4EntertainmentJobs.com now.



 

Sources:

http://www.thedailybeast.com/articles/2014/06/25/what-the-aereo-decision-means-for-you.html

http://www.nytimes.com/2014/06/30/business/media/after-supreme-court-ruling-aereos-rivals-in-tv-streaming-seize-opening.html?_r=0

http://time.com/2974075/aereo-supreme-court-appeal/

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