If Aereo Wins, Major Broadcasters May Head to Pay-TV

by Christopher Freeburn | January 17, 2014 12:08 pm

51-inch Samsung Plasma Television[1]After a series over victories in lower courts, a lawsuit against streaming TV service startup Aereo will be argued in front of the U.S. Supreme Court later this year[2].

In advance of the high court’s hearing of the case, which is scheduled for June, broadcasters are stepping up talk that they could use a “nuclear option” if the court rules in Aereo’s favor. Should Aereo prevail, the broadcasters might end their free, over-the-air TV transmissions and switch to a subscription model. The NFL and MLB have also threatened to take similar action, Forbes notes.

CBS (CBS[3]), Fox (FOXA[4]), Comcast’s (CMCSA[5]) NBC and Disney’s (DIS[6]) ABC continue to pursue legal action against Aereo, which doesn’t pay carriage fees to broadcast their programming to subscribers.

Moving to a subscription model would allow broadcast networks to charger higher fees to watch live sports events. It would also free them from FCC content restrictions, allowing them to add racy content to TV shows and better compete with cable TV programming. Networks executives have warned that Aereo’s success could force them to switch to a subscription model[7] since last year.

On Friday, Aereo announced that it would extend its service into Cincinnati on Jan. 21[8], its eleventh U.S. city.

More Aereo Headlines:

  1. [Image]: http://investorplace.com/wp-content/uploads/2011/11/SamsungTV.jpg
  2. argued in front of the U.S. Supreme Court later this year: http://www.forbes.com/sites/charleswarner/2014/01/16/if-aereo-wins-here-come-the-seven-dirty-words-2/
  3. CBS: http://studio-5.financialcontent.com/investplace/quote?Symbol=CBS
  4. FOXA: http://studio-5.financialcontent.com/investplace/quote?Symbol=FOXA
  5. CMCSA: http://studio-5.financialcontent.com/investplace/quote?Symbol=CMCSA
  6. DIS: http://studio-5.financialcontent.com/investplace/quote?Symbol=DIS
  7. could force them to switch to a subscription model: http://investorplace.com/2013/04/exec-threatens-to-make-fox-network-a-pay-only-tv-channel/#.UtldbHn0CX0
  8. extend its service into Cincinnati on Jan. 21: http://investorplace.com/2014/01/aereo-launch-cincinnati-jan-21/#.UtliIXn0CX0
  9. Aereo May Mean the End of NFL and MLB on Free TV: http://investorplace.com/2013/11/aereo-may-mean-end-nfl-mlb-free-tv/#.Utlctnn0CX0
  10. Aereo Wins Significant Ruling in Massachusetts: http://investorplace.com/2013/10/aereo-wins-significant-ruling-massachusetts/#.UtldBXn0CX0
  11. TV Disrupter Aereo Expands Despite Massive Litigation: http://investorplace.com/ipo-playbook/tv-disrupter-aereo-continues-its-aggressive-drive/#.UtldKHn0CX0

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