Light Reading

Aereo Hits Capacity Crunch Again

Mari Silbey
2/5/2014
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So what's the deal with Aereo lately?

In a sign that snow isn't the only thing sweeping down the US East Coast this winter, Aereo Inc. 's capacity issues are also moving south. Aereo has confirmed that, just as in New York, it isn't signing up any new customers in the Atlanta region until it can add more capacity. (See Aereo Preps San Antonio, Hits Capacity in NYC.)

It's not clear, however, exactly what capacity means to Aereo. We asked the company whether the problem was a need for more antennas, encoding equipment, or storage, or even if there was an issue with content management now that its video traffic is up. A reader pointed out on our message boards that Aereo could also be running out of uplink bandwidth. However, the only response from an Aereo spokesperson was a canned and largely unhelpful statement:

"We're fortunate that Aereo continues to experience strong growth across all our markets. Our team has been working overtime to add more capacity in our existing markets. As soon as additional capacity is added, new consumers will be notified that they can sign up and create an Aereo account."

Just as in the New York case, the company spokeswoman did not indicate when that might be.

The growing capacity crunch comes as Aereo continues to launch service in new markets on one front while it staves off legal battles on another. Because the company encodes and then streams over-the-air television content via the Internet without paying any licensing fees, broadcasters are taking Aereo all the way to the Supreme Court this spring in hopes of shutting the service down.

Despite these legal and technical hurdles, Aereo still plans to launch out its combination TV/cloud DVR service in several new markets in February, including San Antonio on February 19. Aereo is already rolled out in 11 metro regions. (See Aereo Plans Faster Growth Amid Legal Drama.)

But now there are new questions about Aereo's staying power once it introduces service. Stay tuned for more.

— Mari Silbey, special to Light Reading

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Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
2/10/2014 | 6:03:53 PM
Re: Can't be the antennas
Kbode - Yes, woe betide the cable company that alienates a content provider and loses access to THE GAME OF THRONES. 
wanlord
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wanlord,
User Rank: Light Sabre
2/10/2014 | 10:29:28 AM
Antennas it is?
I read an article somewhere this weekend saying they have resolved some of the capacity issues and it was related to antenna capacity. Though antenna is normally considered the device that converts between radio waves and electrical signals, they could be considering the entire path from the IP stream to the physical device the "antenna" and it could be a combination of network capacity, hardware, etc.

 

 
wanlord
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wanlord,
User Rank: Light Sabre
2/6/2014 | 10:14:46 AM
Re: Can't be the antennas
Would be nice to know who makes the antennas!
mendyk
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mendyk,
User Rank: Light Sabre
2/6/2014 | 9:38:16 AM
Re: Can't be the antennas
Barry Diller and other Aereo investors are footing the legal bill for this. The cable operators will let the courts have their say, and if Aereo gets legal clearance, the cable operators will be buying dime-sized antennas by the millions.
KBode
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KBode,
User Rank: Light Sabre
2/6/2014 | 8:53:11 AM
Re: Can't be the antennas
"But why do the cable companies need Aero to do this? Why can't they just do it themselves?"

Simple fear of rattling cages I think. There's nothing that stops someone like Cablevision from offering something like this. Instead, Cablevision has chosen to take pot shots at Aereo's legal strategy in recent months, despite all of the nonsense they had to go through to insist their remote DVR service didn't violate copyright.
KBode
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KBode,
User Rank: Light Sabre
2/6/2014 | 8:51:39 AM
Miami (I think) as well
Aereo didn't respond to my last inquiry (they're getting tired of me I think), but I believe that Miami might be shuttered to new users as well.

Wonder if it's a conscious choice to leave investment static until the Supreme Court ruling comes down? 
albreznick
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albreznick,
User Rank: Blogger
2/5/2014 | 6:19:43 PM
Re: Can't be the antennas
Yep, i agree with you all. It's probably a bandwidth issue, although I question the 20% simultaneous usage figure. That seems a bit high tome. Sure, Aereo could be trying to be a bit too clever by pretending that it's so popular that it keeps selling out. But I don't but that because I don't think they come out of this looking that good.   
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
2/5/2014 | 6:07:06 PM
Re: Can't be the antennas
wanlord, I think you've nailed it. This service is going to be a huge bandwidth hog. 

Broadcasters hate it, but it's potentially hugely beneficial to cable companies, who can get access to programming subscribers want without having to pay fees. 

But why do the cable companies need Aero to do this? Why can't they just do it themselves?
mendyk
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mendyk,
User Rank: Light Sabre
2/5/2014 | 3:26:52 PM
Re: Can't be the antennas
If it were an issue of antenna supply, then Aereo wouldn't be rolling out into new markets (unless, of course, there's some insanity involved). The reason (or motive) for the capacity issue could be anything else.
wanlord
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wanlord,
User Rank: Light Sabre
2/5/2014 | 2:51:04 PM
Re: Can't be the antennas
Though, why can't it be the antennas? Maybe the supplier/manufacturer can't keep up? These are custom boards sold to one customer.

 

OR, maybe it's all marketing? They will focus on getting subs in key markets. This whole "SOLD OUT" thing is only getting them press and making people think it must be really good if they are sold out. Once established in core areas, they will continue to expand and add customers in existing footprints.
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