Aereo Considers Morphing Into Cable Service

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Aereo Logo. Image provided by Aereo

Dateline: 07/12/2014
After licking its wounds in the aftermath of its recent defeat in front of the U.S. Supreme Court, Aereo may be attempting to make comeback by considering a transformation into a cable TV-like service.

In fact, they are claiming that they can do this because the U.S. Supreme Court, as part of the basis of their ruling declared that Aereo is more like a cable service, even though Aereo was arguing that it wasn't.

However, if Aereo can successfully now argue that it is a cable service, then it would qualify for a "statutory license" to operate as such, giving it the ability to negotiate with TV broadcasters and related content providers to carry their programming - with the proviso that Aereo pay appropriate retransmission fees.

However, the ability for Aereo to continue to operate in this manner also hinges on whether said broadcasters would be willing to negotiate with Aereo on re-transmission fee rates - and let's face it Aereo is not exactly in a strong negotiating position to get the best deal.

Aereo is definitely in a weak position as the TV broadcasters and their partners already have a bad taste in their mouths from the whole Aereo legal case, so even if Aereo can successfully claim that it is now a cable service, the broadcasters don't have to negotiate any retransmission fees - thereby, either placing Aereo in limbo again, or going through another round of court hearings on whether Aereo is, or isn't, a legitimate cable service.

Of course, even if Aereo is successful in its turnabout reasoning to be considered a cable service and is able to successfully negotiate any re-transmission fee agreements with broadcasters, it would mean that former subscribers could see subscription rates go up to a more "cable-like" level, and how programing would be offered could change as well (channel packages, ala carte, pay-per-view, etc...).

Both these factors could make the incentive to sign up for "new" Aereo less attractive if it isn't that different in programming content or pricing from that of other cable/satellite services.

Also, antenna maker, Channel Master, is reaching out to former Aereo subscribers with product and service offers that may be hard for Aereo win back.

For background and perspective on this latest turn-of-events in the Aereo story, read the reports from Bloomberg News and CNET.

Stay Tuned - This story may not be over yet.

UPDATE 7/17/2014: U.S. Copyright Office Rejects Aereo's Request to be Classified as a Cable Company (Broadcasting and Cable).

UPDATE 8/22/2014: The 2nd U.S. Circuit Court of Appeals Denies Aereo's Hearing Request To Be Recognized As A Cable Provider.

Disclaimer: Aereo is backed, in part, by IAC, which is the Parent Company of Lifewire.com. However, IAC had no editorial input into the content contained in this article.

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