Aereo's ISP Opportunity
If Aereo Inc. were to open up shop in the Pacific Northwest, Toledo Telephone Co. Inc. and its COO, Dale Merten, would welcome the OTT video startup with open arms.
That's because the Toledo, Wash.-based telco ditched a money-losing, traditional cable TV service a few years ago in favor of a more profitable strategy that pairs its broadband service with over-the-top video content piped to Roku Inc. boxes. Most of Toledo Telephone's customers can't get access to a decent over-the-air digital broadcast TV signal, so Aereo's service, which sells for $12 per month, would make a nice fit, Merten said at Light Reading's Managing & Monetizing OTT Video event in Boston last week. (See Preparing for Video War .)
Merten discussed Toledo Telephone's OTT video strategy, including its interest in a service like Aereo's, in this LRTV video:
As a reminder, Aereo uses an array of thumb-sized antennas to capture over-the-air broadcast TV signals and send them to subscribers via broadband to IP-connected TVs, tablets and smartphones. The service, which also bundles in access to a network DVR, is offered only in New York City. (See Aereo Makes Cord-Cutting Bid in NYC, Who Are Aereo's Customers? and Could Aereo Deflate the TV Business Model? )
The good news for Toledo Telephone is that Roku, the box it uses for its OTT video package, already supports the Aereo service. The bad news is that Aereo likely won't be expanding to any new markets anytime soon, as it's not expected to make any major moves until its court battles with major broadcasters are resolved. (See Aereo Fights for Its Life , Diller's Aereo Under Legal Attack and Can Aereo Survive a Broadcaster Assault? )
Aereo has been marketing its product directly to consumers, but Toledo Telephone's interest in the product offers an indication that Aereo (if it can avoid an injunction) could find new way to attract subscribers using partnerships with broadband ISPs that are interested in creating scaled-down OTT video service packages that focus on a cloud-based DVR, access to a slate of broadcast TV channels and on-demand fare from sources such as Netflix Inc. (Nasdaq: NFLX) and Hulu LLC . (See Pay-TV: Too Costly to Replicate Online?)
— Jeff Baumgartner, Site Editor, Light Reading Cable