The Fight for Streaming TV

We're getting close to the couch-potato dream

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Illustration by Todd Detwiler for TIME

We can stream movies on Netflix. We can buy TV episodes on iTunes. So why, in 2013, can’t we watch live television on our smartphones, tablets and computers without a pricey cable subscription?

That’s the question driving a growing number of innovators who are upending the TV status quo—designated set, $100 provider bill, dozens of channels you don’t actually want—to offer a cheaper, more accessible live-viewing experience on mobile computers.

The most prominent player is Aereo, a start-up that in August began streaming live TV over the Internet in New York City for $8 per month. Its trick is a warehouse full of antennas, which digitize freely available signals from ABC, CBS, NBC and Fox and premium signals from partners like Bloomberg TV. Meanwhile, Intel is quietly brokering deals for a live-TV set-top box, which will launch later this year. And on May 9, Senator John McCain introduced legislation to promote à la carte cable-channel buying and protect services like Aereo.

Broadcast networks and their affiliates are especially wary of this change. Every year they make a reported $3 billion from cable providers, which pay fees to retransmit their programming—a crucial revenue stream now that plummeting ratings have made it tougher to court advertisers during upfront week (which ended May 16). But major networks make nothing from Aereo, which has prompted CBS to sue the start-up for copyright infringement and Fox to threaten to go cable-only. “The survival of the programming itself would require a new business model,” says Richard Stone, legal counsel for Fox.

And yet Aereo has endured those battles and plans to expand to Boston and Atlanta soon, opening the door for any number of copycats. Tellingly, CBS and Fox have started to fund Aereo alternatives that give them more control, such as Dyle and Syncbak. And ABC just announced live-streaming capabilities via its mobile app (for select cities).

At this point, those moves may be the smartest options. “You’ve seen it with music. You’ve seen it with books,” says Aereo CEO Chet Kanojia. “If your product doesn’t add enough value to command the price you want, people just leave and go elsewhere.” Indeed, according to Nielsen, the number of no-TV-set households hit 5 million this year, up 67% from 2007.

17 comments
DeweySayenoff
DeweySayenoff

"But major networks make nothing from Aereo, which has prompted CBS to sue the start-up for copyright infringement and Fox to threaten to go cable-only."

Let me get this straight.

  1. They sell advertising to be seen by viewers.
  2. They base their rates on viewership.
  3. The more people who see their programming, the more they can charge for ads.
  4. The more they charge for ads, the more money they make.
  5. So the more people who watch, the more they can charge for ads and the more money they make.

Can someone please explain to me why they're so against having more people see their programming by whatever means they can?  It means more viewers, so they can sell ads at higher rates.  Cable fees notwithstanding (because they do have to maintain lines to the cable companies), they already give this programming away to the air - though ever since they went digital, about 2/3 of the stations around HERE are unwatchable (which in itself should have been a warning to them about selling off analog channels).  They should be falling all over themselves to thank Aereo for bringing their ads to even more people who can't otherwise get it since the digital switch.

The only fly in the ointment here is that they don't know how many people are watching their stuff.  But that sounds more like a technological issue than the  "pay us because it's our stuff that we give away free" nonsense they're peddling now.  And if it's digitized, they can tell and track who watches what, and report that back to the stations.  If the stations asked nicely, that is.

Of course, ala carte programming would be better since I don't really give a rip about 99% of the programming available.  At a dollar a standard channel per month and maybe 2 bucks for a premium one (which is the most I'd ever pay) I could get by with about $20 bucks worth of programming every month - if that much.  Before I pulled the cable plug, I watched all of about seven channels in total.  Only two of them were regular broadcast channels, and one of THOSE wasn't even local.

Another thing I'd like to see is CHOICE in provider.  I have only one cable option, though my region is serviced by three different operators.  I can't choose any of the others.  I have options for DSL.  I have options for dishes.  But for cable?  Nope.  If a company has a captive consumer group and no competition for it, it's automatically a monopoly.  There is no technological reason they can't arrange to share resources rather than duplicate them.

The cable industry is using a business model based entirely on entertainment established in the late 1970's to early 1980.  That business model is over 33 years old, for an industry that sees generational advancements every six months.  The way we use cable today is orders of magnitude different than the way we used it then.  It's time the industry recognized that times have changed and it's lagging in the way we get our data.  Every time they raise prices, I cut services.  The message is, we'll only pay so much.  If there was competition between the cable companies, maybe some of them would start listening (and stop price fixing).

Debbie Matthews
Debbie Matthews

Streaming.. everyone should be doing this by now...comcast is killing you...you have options

Kemala Dewi
Kemala Dewi

I wish it also can be used to ironing/dry my hair too when traveling ...

Ritchie Burdette
Ritchie Burdette

Jesús, I know what you mean but innovation doesn't have to = dumber.

Vic Buyselltrade
Vic Buyselltrade

Cheaper should be substituted with inexpensive. This is Time right?

Jesús Eduardo
Jesús Eduardo

"Ubiquitous dumbing down and mind control of the masses now made easier"

Ryan Bliss
Ryan Bliss

That's awesome, but I don't want to have to hold my tv.

Didem Aydogan
Didem Aydogan

My HTC One switches on off my TV ,I watch it very smoothly I love smartphones

JohnsonZ
JohnsonZ

The answer to the question in the lede is, "measurement." If the reporter spoke with anyone other than Aereo's CEO, that would have been evident. Once networks can get paid for ads viewed on devices, they'll be on board.  Such a bizarre little PR gift from Time to Aereo.

ScottStrachan
ScottStrachan

@DeweySayenoff Really excellent take on the, Dewey. I just became aware of Aereo and their fight. I agree completely. Now if it were only free to us all again!?

TimeisEnergy
TimeisEnergy

@DeweySayenoffThe cable IPS's will start metering data the way the Cell companies do. At least one Cable provider in my area already does - see my earlier post. Why would the Cable ISP's provide the extra bandwith for their competition without expecting compensation?

I do have access to DSL and Satellite, but neither of those provide the speed that Cable does in my area. And, unless you have access to FIOS, you probably get your Internet from the Cable Co. So talk of "Cutting the Cable" is misleading.

It escapes me why this isn't factored into the streaming argument. My Internet is bundled with my phone and cable. So even if I drop the TV portion, my savings will only be part of the stand alone cable TV bill because the rates for the remaining bundled items will increase.

The Cable Company will continue to be a big part of the Internet, maybe even more so as more users stream TV, because they can meter your data.

ScottStrachan
ScottStrachan

@TimeisEnergy @DeweySayenoff I cannot get DSL, Cable, or FIOS. I can contract with Satellite, or my current service, which is provided via microwave or radio frequency. My current RF provider, and many others, do not have data throttling, and their fees are very reasonable at 3MB/sec.  I have a small disc-like antenna atop a small tower on my roof, which is not aesthetically pleasing, but it gets the job done, and I do not pay extra for any amount of data I use. There are alternatives and we can switch. This will prompt some significant change in the near future, and we have to continue to challenge ourselves to fight these high-priced providers to seek cheaper solutions, which do not control our amounts of use. Its not all one way and there are alternatives for now and the future, but it takes some investigating.