News Corp/Fox versus Aereo Service
By John Douglas, Product Marketing Leader for Converged Media Services, DG
If you read the headlines and follow the court proceedings, you may think the TV model is about to be completely disrupted – or changed forever. But the sky isn’t falling, yet. While everyone has been quick to jump to conclusions – including News Corp’s own threat to pull the Fox Network over to cable – no one seems to be giving much weight to some very important details. I’d like to lay out my argument of why Aereo, despite its disruptive behavior, is merely just another cog in an overwhelming trend for consumers to look for more efficient and easier access to the content they love. It’s neither the destroyer of TV executives, nor the savior of consumer choice.
To start, I question whether price is the real reason for cord cutting. By Nielsen’s own count, price is only a factor for 36 percent of households without TV subscriptions – which sounds high until you realize that equates to less than 2 million people. So what’s this really about all about then? It’s about convenience; the same convenience that Napster opened up. It’s about watching what you want, when you want it, on the screens you choose. Is it about fast forwarding commercials? Maybe. But the trend for using multiple screens screams one big reason for a DVR – what did I just miss? Rewind.
How does this relate to Aereo and why am I not worried (or excited) that the model is going to change overnight? Because Aereo is still only about over-the-air content. That’s important, because unless you’ve been living under a rock for the past decade, cable network programming is only growing in popularity.
From a consumer perspective, this means not only do I need to buy Aereo for broadcast; I’ll need Hulu for cable and Netflix for the back catalog (and now original series’). For new movie releases on demand, I’ll also need iTunes, Amazon or Vudu – or just go to the theatre. Remind me again how this is at all convenient? Especially if I also want ESPN or Game of Thrones. Forget that, I’ll just pay for cable. It’s easier – and maybe those TV Everywhere services will eventually get better too.
Why else is Aereo not a big deal? Because broadcasters today already make their recent programs available online and have yet to put them behind some form of authentication. If they really wanted to kill Aereo, they could just make easier, more straight forward ways to view content, not to mention adding Airplay to all of their full episode players or putting apps on Apple TV and Roku so consumers can watch content on any screen, any time – and the broadcasters could still monetize the ad inventory, while still controlling things like ad loads, formats and skipping.
We can talk all we want about hypotheticals; Aereo could sign deals with cable networks. HBO Go or ESPN might go solo. Fox might join FX, FXM and FXX. But if we’re looking at things hypothetically, I’d rather look at it from a consumer standpoint. And all signs point to Aereo being a worthwhile endeavor for some audience segments.
From an industry standpoint, what I find most telling from all of this has nothing at all to do with Aereo but about Hulu. Hulu had a chance to become a clearing house for all broadcast content. They could have become the OTT source for all live and current season programming and bundled that up for every MVPD and still gone direct to consumer with an attractive low cost model. For one reason or another that didn’t happen. If it had, none of us would have ever heard of Aereo.