Univision is joining Fox Television warning that if an upstart online video streaming service is allowed to stay in business, it will seriously consider turning off its free to watch over-the-air programming and go pay cable only.
Univision chairman Haim Saban says if Aereo continues to sell online streaming of its over the air stations, it could be forced to turn off more than 50 local broadcast affiliates, forcing viewers to cable, satellite, or telco pay television to keep watching.
Univision is no longer a small player in American broadcasting. The Spanish language network is now more popular than NBC in the ratings.
Saban says its local affiliates could find themselves off the air if the network abandons them — Univision’s network programming occupies most of the broadcast day, with most local stations airing only local news and a small selection of syndicated programming and program length commercials.
“To serve our community, we need to protect our product and revenue streams and therefore we too are considering all of our options — including converting to pay TV,” Saban said. “With Hispanics watching over-the-air news and entertainment at twice the rate of non-Hispanics, being forced to convert to cable would significantly impact this community.”
The real threat, according to industry analysts, is Aereo’s business model could offer an end run around lucrative retransmission consent fees now demanded by broadcast networks and local television stations. If the cable, satellite, and telco TV industry were to license Aereo’s technology, it could carry broadcast stations for free without paying broadcasters for permission to put their stations on the lineup.
The collateral damage could be felt by more than 13 million American households that have either abandoned pay television, can’t afford the asking price, or don’t have access for other reasons. If the networks make good on their threats, viewers would no longer have access to network programming for free.
Industry observers suggest Fox and Univision are engaged in saber-rattling for the benefit of Washington lawmakers that might be asked to choose sides in the dispute.
Aereo has responded to the industry’s line in the sand by reminding the networks they are violating a long-standing deal they made with Congress in return for access to the public airwaves.
“It’s disappointing to hear that Fox believes that consumers should not be permitted to use an antenna to access free-to-air broadcast television [after promising] that they would broadcast in the public interest and convenience, and that they would remain free-to-air.”
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Bloomberg News reports on the conflict between Aereo and over the air broadcasters and how far both sides are really willing to go. (5 minutes)
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CNBC’s Julia Boorstein reports on Fox’s assertion Aereo is “pirating their signal” and notes the network may be preparing to convert its over the air free service into a pay channel. (2 minutes)
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CNBC talks with Aereo founder Chet Kanojia about the court decision to allow Aereo to keep operating. Kanojia also explains how Aereo works for consumers who don’t want to pay for a big cable TV package. (6 minutes)