Saturday, October 12, 2013

I want my MTV

I remember the early days of cable. We got cable in the house because the signal wasn't very good. Cable really cleared up the signal and we got more channels. The days of setting up an antenna to watch TV over the air are mostly gone. In order to retransmit signals, cable companies pay a fee to local broadcasters for the right of retransmission. This relationship has worked well for many years, but there appears to have been a sea change.

Television networks had a nice monopoly in the 70s and even eighties. Little to no competition. Complete control over the content.Then the VCR came along and introduced time shifting for people who wanted to watch a show later. Then the cable companies came along and introduced a lot more competition in the form of cable only networks. Then the internet came and changed everything. But times are tough and most people don't want to pay for internet and television.

Along comes Aereo, a service that competes for viewers with cable and satellite companies. Aereo allows subscribers to watch local TV over their computers, tablets or phones - live. Or they can record their shows of choice and watch them later. With a well equipped television and computer, one could easily watch American Idol on their big screen without the cable companies, at at time of the consumer's own choosing.

This is upsetting to the major networks. So upset are they, that they have sued and are appealing to the Supreme Court after having been defeated in the lower courts. Some are saying that if they lose, they will remove their content from the airwaves. They are afraid that if Aereo wins, they will not be able to recoup their losses. What losses?

The retransmission fees are so substantial, that CBS and Time-Warner engaged in a lengthy battle over fees, cutting viewers off from 60 Minutes and shows from the CSI franchise to name a few, for several weeks. This is much more than chump change. This money that two very large companies were willing to fight over, perhaps even go to court over it.

What will the major networks do with their broadcasting licenses if they take their content off the air? What happens to all that spectrum? We could use it for some other service that we have yet to consider. Maybe it could be turned into high speed wireless internet access for everyone - free. Who knows?

I like the idea of Aereo. They have figured out one very interesting problem. They too, have noticed that reception of television signals is terrible in most areas in many major markets. My personal experience with indoor antennas is that I can receive Telemundo and three other Spanish speaking stations with a perfect picture in high definition, but there is nothing, absolutely nothing, from any of the big four networks, ABC, CBS, FOX and NBC. Oh, I do get a great signal on an English speaking shopping station, too. Nice, touch.

Aereo gets around the copyright issue by building farms of thousands of tiny antennas, each one assigned to a unique subscriber. In addition to that, each subscriber has their own DVR and can record the shows of their liking. Isn't that interesting? The courts think so. The courts have recognized that each subscriber is directing the viewing and recording of the shows they want to watch and they are not engaged in viewing a public performance. Plus viewers can watch what they want on their big screen, their computer, their tablet or their phone. Not too bad for $8 a month. I guess that's better than bad: $20 a month or more for basic cable for one big screen.

If the major networks are really that upset about Aereo, then perhaps they could crank up the watts on their antennas so that viewers can get a good signal and watch their shows. Oh, wait. That won't work. The cable companies would be really upset about that, too. They would lose subscribers. And the networks would lose a giant chunk of change if people didn't subscribe to at least basic cable. Now there's a perverse economic incentive for a license to broadcast a signal over the air, a signal intended to be free and supported by advertising.

Aereo saw a need and filled that need in a way that cable companies and the major television networks were unwilling to fill. That's how a free market works. Notice that that little private monopoly didn't do them a bit of good in a free market. This is how it should be, but the networks disagree with the consumer and the courts so far. They want the government to restore their monopoly on the airwaves like it used to have. Such is the cry of the old, obsolete business model. Wave goodbye with me to the old television business model when the Supreme Court does not grant certiorari to the broadcast networks.
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