In June of 2014, the United States Supreme Court effectively drove a stake through the heart of Aereo, a company that allowed users to stream network television over the Internet. Aereo also functions as a DVR service, letting its customers watch local programming they had recorded and stored on the company’s cloud-based servers.
Aereo’s CEO has pledged to keep the the company going, but the demise of its current service is all but assured. Broadcasters didn’t like Aereo, which charges customers a $8 monthly fee, because the New York-based, Barry Diller-backed startup consciously avoided paying them the billions of dollars in retransmission fees cable and satellite providers always ponied up to carry their content.
The broadcasters viewed the Aereo case as an existential threat—so much so that a top News Corp executive said Fox might move to cable if the decision didn’t go its way—and, as such, successfully sued to get Aereo shut down on copyright infringement grounds. Despite their court victory, the cat may be out of the bag for broadcasters.
The existential threat to their business model wasn’t so much that Aereo could assign a tiny antenna to each subscriber then beam last night’s episode of American Idol to their iPad. The real danger was that a very large amount of people, over 100,000 in New York City alone, were willing to pay a relatively small amount of money to forego cable and satellite, instead opting for what amounted to the combination of a TiVo box and an antenna.
Here’s the thing: Cobbling together the parts necessary to legally recreate Aereo on your own isn’t particularity expensive or difficult. In fact, drawn out over a long enough timeline, it’ll probably even save you money over shelling out for Aereo. To recreate Aereo, the first thing you’re going to need is a way to get the broadcast TV signals from the air and onto one of the many glowing rectangles in your home.
Due to a Federal Communications Commission mandate, all broadcast TV stations have been exclusively digital since 2009, which means dusting your parents’ old rabbit ears out of the basement likely won’t get you anything other than static. But digital antennas are super cheap. This one from HomeWorx costs a mere $9.10 on Amazon.
Not only does this antenna cost only slightly more than a single month of Aereo, but it works everywhere in the country—not just in the eleven major metro areas where Aereo offered service. But, let’s say, you wanted to record last night’s The Bachelorette and watch it at your leisure, which is your god-given right as an American. One way to do that is to to buy a subscription-free DVR that allows for the functionality of Aereo or TiVo but with the cost of a single upfront purchase price rather than a monthly subscription.
There are a number of options that fit the bill, like the Channel Master DVR+, which retails for $250. The total cost for both products is the equivalent of about two and a half years of an Aereo subscription. If Aereo was your long-term TV solution, this setup will likely save you money in the long run. However, if you want to go even cheaper and don’t mind getting a little technical, it’s possible to get TV signals broadcast directly onto your computer and then turn the machine’s hard drive into a DVR with TV tuner cards made by companies like Hauppauge, Pinnacle, and ATI Tuners.
These devices, some of which require opening up your computer and physically installing a card into the motherboard, can sell for as cheap as $50 and generally don’t require monthly or annual subscription fees. Either of these setups allow much of the same functionality of Aereo for price tags that may ultimately be less than what Aereo offered. The best part is that the Supreme Court probably isn’t going to shut them down any time soon.
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Supreme Court to decide on Aereo, an obscure start-up that could reshape the TV industry The Supreme Court will decide the fate of Aereo, an Internet start-up that's frightening the TV industry with an old-school technology: the antenna. Technology reporter Cecilia Kang and Supreme Court reporter Robert Barnes explain what you need to know about the technology and legal implications behind Aero.
An obscure Internet start-up is emerging in the television industry with an old-school technology: the antenna. The start-up, Aereo, uses thousands of tiny antennas to capture broadcast television programs, then converts the shows into online video streams for subscribers in 11 cities. What Aereo does not do is pay licensing fees to the broadcast networks that produce the programs. And that has put Aereo at the center of a debate over the reach of copyright laws, the accessibility of public airwaves and the future of television.
The Supreme Court on Tuesday will hear arguments in a civil case filed against the two-year-old private firm by ABC, CBS, NBC and other major broadcasters alleging that Aereo is no different from cable and satellite firms that are required to pay hefty fees to rebroadcast their shows. “Quite simply, Aereo takes copyrighted material, profits from it and does so without compensating copyright holders,” said Gordon Smith, the president of the National Association of Broadcasters.
Aereo argues that it is entitled to draw freely from programs transmitted on public airwaves. If successful, the argument has the potential to blow apart the expensive channel bundles that have been forced on American cable consumers and to radically reduce the cost of watching television.
“Aereo has a shot at changing the TV business model,” said Gene Kimmelman, president of the consumer advocacy group Public Knowledge and a former antitrust official at the Justice Department. “Behind the technical and legal arguments of the case is a fundamental question of whether consumers will be able to take advantage of new technology to access programming in a convenient and low-cost fashion.”
An Aereo victory could dramatically change the way people watch their favorite programs. Live sports and other popular shows that are available only on broadcast TV or cable television could be accessed more conveniently and cheaply over the Internet.
That could lead many consumers to cut the cable cord in favor of a much cheaper alternative: a broadband Internet connection and subscriptions to Aereo and other video service providers such as Netflix and Hulu.
The average price of basic cable is nearly $100 a month. Broadband Internet plus subscriptions to Aereo and Netflix totals less than $60. Funded by IAC Chairman Barry Diller, Aereo operates in Atlanta, Austin, Baltimore, Boston, Cincinnati, Dallas, Detroit, Houston, Miami, New York and San Antonio.
Plans for the Washington area were held up last fall by problems negotiating space for a local “farm” of antennas and servers. The company hopes to launch in the District later this year and eventually expand nationwide.
District residents Katrin Verclas and Bob Boorstin are eager for a way to cut their cable subscription, but they have kept it for baseball games and some other broadcast programs. They cringe at the thought of paying $130 a month for cable so Boorstin won’t miss Nationals games. With Aereo, baseball streaming site MLB.TV and maybe another app, they would gladly use the Internet for all their video news and entertainment. “I never watch TV — all online all the time,” Verclas said. “I’d rather spend money on faster Internet than hundreds of channels we never watch.”
As legal teams for both sides prepare to make their arguments before the court, analysts say it is unclear which side will prevail. At the heart of the case is the question of whether Aereo violates a four-decades-old copyright law written during the birth of cable television. That law prohibits the use of copyrighted material broadcast over public airwaves without the approval — and compensation — of its owner. But the law distinguishes between material used for “public” performances, shown to multiple people at once, and “private” performances, shown to a single individual.
When a cable company rebroadcasts an ABC show, it is offering a “public” performance and therefore must pay the network retransmission fees. But because licensing payments are not required for private performances, people without cable can continue to use antennas to capture and record over-the-air television programs for their personal viewing.