Print 4 comment(s) - last by Dr of crap.. on Jul 23 at 12:42 PM

Service had next to no subscribers as it struggled to sell customers on its role as a pricey cloud DVR for public TV

Aereo -- a once-promising New York City startup owned by InterActiveCorp/IAC (IACI), the internet company led by former broadcast executive Barry Charles Diller -- crashed and burned hard last month when the U.S. Supreme Court ruled that its business model was illegal.

The company had provided cloud DVR services which allowed customers to record and view -- at their convenience -- publicly broadcast TV.  Aereo insisted this didn't constitute "reselling" or "rebroadcasting" rival TV broadcasters' work.  However, that defense was weakened by the fact that Aereo's rates came at a significant premium ($8 USD/month for ~20 GB (20 hours of standard definition video)) over similar cloud DVR/storage services (indicating part of the value was in the ability to intercept broadcast content).

Aereo tried to strengthen its case by building a highly specialized backend with thousands of individual dime-sized antennas -- one per user.  It argued it was behaving no differently than any other viewer, and was simply providing convenience to its users.  The argument didn't impress in the end, though.
Chet Kanojia
Aereo CEO Kanojia poses with his company's backend hardware, which included thousands of dime-sized antennas.  Apparently only 77,000 customers bothered to subscribe. [Image Source: Buck Ennis]

In the aftermath of the Aereo's collapse, paperwork filed from the U.S. Copyright Office indicates it was pretty much a moot point, even if Aereo had won.  Even before it lost, Aereo appeared to see the writing on the wall and began filing requests with the U.S. Copyright Office to be treated as a cable broadcaster.  However, the outlook revealed was grim.   According to the filing, first reported by Re/Code, it had only 77,596 subscribers at the end of 2013.

Its top 3 markets were:
  • New York City, N.Y. -- 27,000
  • Boston, Mass. -- 12,000
  • Atlanta, Geor. -- 10,000
Aereo is continuing the fight, with the new legal plan looking to rebrand itself as a "cable" provider.  It writes:

Under the Second Circuit's precedents, Aereo was a provider of technology and equipment with respect to the near-live transmissions at issue in the preliminary injunction appeal. After the Supreme Court's decision, Aereo is a cable system with respect to those transmissions.

Aereo is getting creative and trying to survive legally by rebranding itself as a "cable broadcaster", while providing identical services. [Image Source: Aereo Blog]

According to a letter [PDF] obtained by CNBC, the Copyright Office granted provisional acceptance to the plan, but warned it likely would be rejected in the long run, writing:

Internet retransmissions of broadcast television fall outside the scope of the Section 111 license.

Reuters reports that the broadcast companies who sued Aereo called the scheme "astonishing".  They've asked a federal judge and the Copyright Office to summarily strike it down.

Even if Aereo were able to unfathomably survive, it looks like its business model is next to dead given the subscriber numbers.  Unsurprisingly it's reportedly exploring other options, including using its dime-size antennas in small set-top budget DVRs.

Sources: RE/Code, Aereo [PDF, 1], [PDF, 2], The Verge

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This is actually pretty important
By Solandri on 7/23/2014 1:48:22 AM , Rating: 3
What Aereo is trying to do by reshaping itself as a cable company is to create the equivalent of VoIP for TV service. It used to be you got your phone service over dedicated lines going into your house. But voice traffic is slowly migrating over to packet switched networks allowing them to be transmitted over the Internet. I have my parents on a VoIP service (I only have a cell phone) and their bill last month was $5.91, half of which was the $2 fee for the phone number and $0.93 911 service fee. The regular landline local and long distance phone companies are still around, but their days are numbered (we'll have to see how Internet over cell networks develops to see if cell phone service providers will die the same way as well).

Piracy of music (audio) over the Internetled the way, with piracy of movies (video) following a few years later. So expect the same thing to happen here. Phone service (audio) is switching to using the Internet as a means of transmission, eventually so too will TV broadcasts (video) switch to using the Internet for transmission. The cable TV companies are going to go through the same transition landline phone companies currently are. Their ownership of the cables will no longer guarantee them a monopoly on TV service. People will be able to use them only for Internet service, and get their TV broadcasts elsewhere (like Netflix or Hulu, except for live TV shows).

Unless the FCC gets in the way and declares that transmitting video over the Internet should be treated differently from transmitting audio over the Internet for some reason.

By Visual on 7/23/2014 7:21:30 AM , Rating: 2
Everyone's days are numbered ever since the invention of the first calendar.

On topic, the FCC does not need to get in the way of anything because the TV stations themselves are already getting in the way of it. IPTV is already a thing, but mainly a thing which TV channels are boycotting on purpose. Cable TV companies have no say on the matter, they need to obey the restrictive licenses under which they get the content from the channels, and can not rebroadcast them on the public internet (even if access is controlled by account login), only on their own infrastructure.

By michal1980 on 7/22/2014 7:20:24 PM , Rating: 2
how much money was spent on serving these 78,000 customers?

How much money did the exec's of Aero get ?

This -
By Dr of crap on 7/23/2014 12:42:58 PM , Rating: 2
"However, that defense was weakened by the fact that Aereo's rates came at a significant premium ($8 USD/month for ~20 GB "

This is what brought them down??
How is $8 a month a "premium"???
I'd gladly pay $15 month for the DVR service!

"A lot of people pay zero for the cellphone ... That's what it's worth." -- Apple Chief Operating Officer Timothy Cook

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