Light Reading

Aereo Heads to Charm City

Mari Silbey
12/5/2013
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Just in time for Christmas, video streaming startup Aereo has announced it will launch in the Baltimore metropolitan area on December 16.

The controversial service, which uses dime-sized antennas to collect local television signals before streaming them to customers over the Internet, is still embroiled in major legal battles. However, Aereo Inc. continues to push forward, even as the nation's broadcasting companies have petitioned to take their fight all the way to the Supreme Court. (See Aereo Headed for Supreme Court?)

The launch in Baltimore, aka Charm City, marks the tenth service region for Aereo so far. The company also operates in the metro areas around New York City, Boston, Atlanta, Miami, Salt Lake City, Houston, Dallas, Detroit, and Denver. Aereo has said it is aiming to introduce service in 20 cities before the end of the year, and lists several other regions on its website as "coming soon." However, while the company promises to announce additional launch dates this month, Aereo was unable to confirm in time for this story whether management believes it will reach the 20-city goal.

The legal fight around Aereo centers on the fact that its service uses a technology workaround to avoid licensing fees that would normally have to be paid to the nation's broadcast networks. Aereo argues that because it assigns a single antenna to each of its subscribers, and because broadcast networks are free over the air, it shouldn't be subject to retransmission fees. Broadcasters, on the other hand, contend that the transmission of thousands of simultaneous streams still constitutes a public performance. If Aereo doesn't pay up, broadcasters say the courts should shut it down.

Future court decisions on the fate of Aereo will have major implications for the television industry. SNL Kagan predicts that network retransmission fees will top $6 billion by 2018, and broadcasters aren't going to let go of that money lightly. If Aereo succeeds in court, however, other pay-TV providers have already made noises about using similar technology to do their own end-run around broadcasters. Network executives are fighting back with threats to take their best content off the air and move it behind the cable paywall. (See CBS Financials Fuel Aereo Angst.)

This week's Baltimore launch puts Aereo in the hands of residents across 11 Maryland counties including Anne Arundel, Baltimore, Caroline, Carroll, Cecil, Harford, Howard, Kent, Queen Anne's, Talbot, and Baltimore City. Service starts at $8 per month for Aereo's channel line-up plus 20 hours of digital video recording storage. An extra $4 per month bumps the DVR storage rate to 60 hours.

— Mari Silbey, special to Light Reading Cable

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wanlord
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wanlord,
User Rank: Light Sabre
12/11/2013 | 10:42:48 AM
Aereo Jammers
So this may be a bit off the wall, but what if the big broadcasters set up directional jammers? For example if they locate the Aereo antenna farms, lease some space, or use a vehicle to disrupt the signal specific to their frequency? Since they are licensed to use that frequency, does the FCC prevent them from causing disruption on their own broadcast? If it was done right they could limit the disruption to a well defined area as not to impact valid receivers. Even just enough to screw up Aereo's reception, like introduce static, or alerts, or just the sound. I don't know how this would all technically work, but cause enough issues that Aereo has no quality service therefore no business. I am not advocating this, just wondering if it can be done.
albreznick
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albreznick,
User Rank: Blogger
12/9/2013 | 6:54:02 PM
Re: Ho-Ho-How Many?
Maybe the product just isn't that attractive in the end, Dan. Plus, putting yp those antennas could by troublesome. If anything, I'm surprised that they've signed up as many as 100,000 subs so far. I figure that they'll be a pretty niche player.  
DOShea
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DOShea,
User Rank: Blogger
12/5/2013 | 8:43:23 PM
Re: Ho-Ho-How Many?
Maybe that can help Aereo in court--it can point to the negligible effect it's having in the rest of the industry. I'm surprised the attention from broadcasters isn't helping the company get more notice.
mendyk
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mendyk,
User Rank: Light Sabre
12/5/2013 | 12:54:57 PM
Re: Ho-Ho-How Many?
It looks like Aereo is reaching back to the CLEC playbook circa 1998 -- establishing "presence" in more markets before actually getting meaningful business. And we all know how that strategy turned out.
msilbey
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msilbey,
User Rank: Blogger
12/5/2013 | 11:28:55 AM
Re: Ho-Ho-How Many?
It hasn't said, but the Wall Street Journal estimated in October that the service has around 100k subscribers in New York. Other city launches have been pretty recent, so I'd assume the total number of subs isn't much higher even if the WSJ's estimate is correct.
mendyk
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mendyk,
User Rank: Light Sabre
12/5/2013 | 11:08:43 AM
Ho-Ho-How Many?
Hi, Mari -- Is Aereo saying how many actual customers it has?
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