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HissyFitWatch: Fox TV Threatens Nuclear Option: “Subscription TV” if Aereo Decision Stands

Phillip Dampier April 8, 2013 Consumer News, HissyFitWatch, Online Video, Video 13 Comments

aereo_logoFox Television’s over the air signal may be scrambled and available “only by subscription” if the courts do not reverse their decision to allow an upstart television streaming service to continue operations while a broadcaster-backed lawsuit works through the legal system.

Aereo has been streaming New York City local stations to area residents that lease a tiny dime-sized antenna and receive the stations via the Internet. Broadcasters consider Aereo an end run around copyright law and retransmission consent fees paid by cable, satellite, and telco-TV operators. With millions in licensing fees at stake, several networks immediately filed suit to force the service to suspend operations.

But the 2nd Circuit Court of Appeals ruled in a 2-1 decision last month that Aereo’s streaming service did not represent a “public performance,” meaning the company was not infringing on the copyrights of broadcasters. Until a final court ruling is made, Aereo can continue operating, the judges ruled.

That decision prompted a hissy fit by News Corporation’s president and chief operating officer, who declared he is considering turning the Fox television network into a subscription-only service, potentially meaning the service would be scrambled and unavailable for free over-the-air in the future.

“Aereo is stealing our signal,” Chase Carey said at the opening of the National Association of Broadcasters’ convention is Las Vegas last night. “If we can’t have our rights properly protected through legal and governmental solutions, we will pursue business solution. One solution would be to take the network and make it a subscription service. We’re not going to sit idly by and let people steal our content.”

[flv width=”640″ height=”380”]http://www.phillipdampier.com/video/Bloomberg News Corp to Take Fox Off Air If Courts Back Aereo 4-8-13.flv[/flv]

Bloomberg Television explores Fox’s “nuclear option” of scrambling its broadcast outlets and forcing all Americans to pay for its content. (2 minutes)

[flv width=”384″ height=”236″]http://www.phillipdampier.com/video/CNN Money Aereo TV 3-13.flv[/flv]

CNN Money explains Aereo and its threat to the traditional broadcast retransmission consent fee system that has made over-the-air networks highly profitable with subscriber fees paid by your cable, satellite, or telco-TV provider and passed on to you in the form of higher cable or satellite bills.  (2 minutes)

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Andrew Madigan
Andrew Madigan
7 years ago

I wonder if their current FCC license would allow them to broadcast a scrambled signal. Even if they could broadcast scrambled OTA, I wonder how many people would pay. If they won’t pay for cable, what chance is there that they will pay for FOX and buy the required descrambling equipment?

Sounds like FOX would just end up as a cable-only network. If the OTA viewership numbers aren’t valuable to them, why not just do that today? Shut down their broadcast and sell directly to cable companies, I’m sure we could find a better use for their frequency allocation.

Dave Hancock
Dave Hancock
7 years ago
Reply to  Andrew Madigan

You have something there – the OTA broadcast licenses prohibit encryption – PERIOD! Those licenses are for PUBLIC AIRWAVES – for broadcasting in the PUBLIC INTEREST! But Murdock has never done anything in the Public Interest!!!

James Cieloha
James Cieloha
7 years ago

If that happens, there will be affiliates that will be forced to switch to another network like WBRC gets ABC, KDVR/KFCT gets CW, WDAF gets NBC, KTVI gets ABC, WGHP gets ABC, WJW gets CBS, WITI gets CBS, and KSTU as an unaffiliated independent station. FOX would have to sell WHBQ to someone like Journal, LIN TV, or Meredith and turn it into an ABC affiliate and would do the same with other own and operated stations. Sinclair owns the most number of stations affiliated with the FOX Network. Every FOX viewer should be ashamed of both Chase Carey and… Read more »

Josh Taylor
Josh Taylor
7 years ago

I think the FCC wants to end Broadcast TV completely by supporting the Aereo decision.

Fox is not alone, because ABC, CBS, and NBC agreed that Aereo is committing signal piracy, if SCOTUS rules (which likely) in favor of Aereo, the other networks will join Fox’s cable only bandwagon.

Josh Taylor
Josh Taylor
7 years ago

OTA scrambled? This going to be like in the days of ON-TV and SelecTV.

txpatriot
txpatriot
7 years ago

“Aereo is stealing our signal”. I thought that argument was settled back in the early days of CATV? What am I missing here?

Dave Hancock
Dave Hancock
7 years ago
Reply to  txpatriot

What you are missing is:

OTA TV is free – all you need is an antenna to receive the signal.

Suppose instead of purchasing an antenna – you rented your own personal antenna. Wouldn’t that be OK? (courts said yes).

And also suppose that that antenna was mounted in some remote location (and you rented space for it to be there). Courts also said yes.

That’s Aveo. The antenna is dedicated to YOU. You control what is tuned, all Aveo is doing is renting these things to you. One antenna, only one program.

txpatriot
txpatriot
7 years ago
Reply to  Dave Hancock

I agree with you. Aereo is the 2013 version of CATV — so the Fox guy has no argument as far as I’m concerned.

tacitus
tacitus
7 years ago
Reply to  txpatriot

Fox’s argument is essentially that if they don’t get what they want, they will take their ball and go home.

Scott
Scott
7 years ago
Reply to  tacitus

They’re welcome to quit at anytime, and the publicly owned field they play on can be re-assigned to a team that’s willing to serve the public interest and make a fair profit the same way stations have been able to for decades.

Dave Hancock
Dave Hancock
7 years ago

I’ve been wondeing how successful Aereo could ultimately be – even if FOX and others did not pull out of OTA broadcasting. I understood that the whole idea of Aereo is that one could save money by NOT subscribing to cableTV to receive their local stations. If the monthly costs of renting an Aereo antenna is $12, and the monthly costs of lifeline cable (the lowest cost with primarily local channels) is $12 (that’s the rate here in Rochester), where is the savings? But, let’s say the lifeline cable costs were $20, then the monthly savings would be $8. Now,… Read more »

Andrew Madigan
Andrew Madigan
7 years ago
Reply to  Dave Hancock

Here in San Francisco, Comcast’s absolute basic package is $26.71/mo. Even with that, I wouldn’t get the DVR functionality or web streaming functionality that Aereo has. I’m hoping Aereo will expand to SF, the current options here are terrible. So bad in fact, that I don’t even bother. I have netflix.

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