How Aereo Would(n't) Work in an Alliance With MVPDs

Low-Quality Video, High Cost of Bandwidth among Hurdles

One of the most unnerving scenarios for broadcasters is partnerships between Aereo and cable, satellite and telco operators to bundle its video product with the MVPDs' broadband services without making retransmission payments.

Whether that is part of the Aereo strategy remains to be seen. When CEO Chet Kanojia was asked about it recently byB&C's Mike Malone, he said: "With the nature of our company and what we do, there's a ton of interest in our company."

There are several hurdles to making such an alliance work, from technical and cost modeling standpoints. Here are two of the biggest:

Low-quality offering. Aereo supplies a signal for a small mobile screen or a computer screen from a tiny antenna. That's not the makings of a great viewing experience on the average 46-inch or 56-inch HD screen, where most broadcast content is watched.

High cost of bandwidth. To make this an alternative to paying retrans to get a clean signal from the broadcaster, the partners would probably have to move to a larger or better antenna and create a much more expensive infrastructure to get a better IP signal. Then you need a very big pipe into the home-a lot of bandwidth.

Each time a person would want to watch CBS on a broadband connection, a new stream would start (as opposed to the cable system, where all the channels go out simultaneously to the set-top box). To deliver a good HD stream into the home, cable operators use 6Mbps to 8Mbps stream, and even with better compression would require over 4Mbps. Duplicating that over broadband connections for the U.S.' 110 million TV homes would require spending tens of billions of dollars to build the infrastructure for that today.