Mixed Signals

Memo To Aereo, Diller, Chet K: No, You’re Not Finished!

Post-SCOTUS, Aereo 2.0 4/05/2014 4:45 PM

The scary headline a couple of days ago noted a hyperbolic plea by big time Aereo investor Barry Diller, to the effect that if the U.S. Supreme Court (SCOTUS) turns thumbs down on the Aereo service after oral arguments the morning of Tuesday, April 22, that the Aereo service is essentially “dead.”

Frankly, I find that ridiculous. Indeed, that’s just poppycock! (Maybe Barry D. thought it was April 1, and this was his version of an April Fool’s joke.)

Years ago, by way of explanation, former ABC TV vice president Rich Wolf, made a brilliant and quite perceptive comment about Aereo, which was to the effect of “Why didn’t a broadcaster unveil an Aereo-like service first, before Aereo did?” His implication was that such a move by a broadcaster would have worked, and would have been the “right way” from the beginning to implement a new technology like Aereo’s.

Wolf (now EVP of The Switch) made a very important question and implication, suggesting a very easy solution to the Aereo dilemma: Aereo needs to either sell its entire operation to a broadcaster or broadcasters (so that the broadcasters and their value chain can control the Aereo ecosystem); or Aereo, at least, needs to let the broadcasters become a part of the operation, and thus the revenues.

I am reminded of a meeting I was a part of years ago (before Aereo launched), when a broadcaster asked me, “Where’s my compensation when Aereo re-telecasts my content?” and I didn’t have an answer for him. But his Q also implied the obvious: make the broadcaster and the content owner a part of the mix, and you’ve probably got a great new animal, ready to range and roam successfully, in the hyper-competitive world of modern video!  

This is important, because, my best gut feeling is that Diller’s SCOTUS concern is well-placed: the U.S. Supreme Court is going to tell Aereo that it cannot operate as it is currently doing, which leaves the broadcaster distributors and content owners almost completely out of the loop, so to speak. And meanwhile, under the current scheme, Aereo takes the distributors’ and content owners’ copyrighted material and resells it to consumers at a profit to Aereo, and very nearly (depending upon how you measure the effectiveness of advertising these days) to Aereo only. That just doesn’t make sense.

But figure out a way to get some valid compensation to those TV distributors, and their partners, the content owners, and you are on your way.

Call it Aereo 2.0, post-SCOTUS, and Aereo survives, or perhaps, even thrives!

Jimmy Schaeffler is a telecom author and chairman and CSO of the Carmel-by-the-Sea-based streaming, broadcast and pay TV/video consultancy, The Carmel Group (www.carmelgroup.com).