Aereo: Suited Up to Disrupt Pay TV

If you haven't heard of Aereo yet, you soon will. The Web TV startup is making waves in the pay-TV industry, and its latest court victory gives it the legal precedence to disrupt the pay-TV model we've all come to know and tolerate. The year-old company offers over-the-top live TV by tapping into off-air TV signals, bypassing the hefty fee the pay TV providers pay for over-the-air broadcasts, and offering them to consumers for only $8 per month. It's able to do so via tiny antennas capable of picking up the signals that it leases to its customers. These antennas can be affixed to a phone, computer, tablet, or small TV to pick up programming over the Web.

This freeloading ticked the broadcasters off the second Aereo went live in New York last year. They took Aereo to court, and, this week, a New York's U.S. Court of Appeals upheld a July ruling that Aereo's business model did not infringe on broadcasters' copyright claims as it wasn't broadcasting "public performances," and was, therefore, permissible. Buoyed by its courtroom success, Aereo is reportedly in talks with both wireless operator AT&T and satellite provider Dish Network about partnering to extend its reach. AT&T could potentially sell Aereo's video service bundled-in with its broadband and wireless services, and Dish would add Aereo's low-cost TV plans as an option for its satellite customers. Commenting on the rumored partnerships, Yankee Group senior analyst Rich Karpinski noted that Aereo's business model of streaming live TV over broadband connections is hugely disruptive for the entire TV supply chain, but that shouldn't dissuade service providers from partnering up. He writes:

That AT&T and Dish are at least talking with Aereo shows that companies with broadband networks are getting comfortable that they can still make money in this new environment -- AT&T by pumping those bits over its networks (including its well-monetized mobile data network), and Dish by finding a possible partner-in-crime for its plans to play a larger role in the video/mobile data future.

Get the rest of the story at Innovation Generation — Sarah Reedy, Editor In Chief, Innovation Generation