ATLANTA, GA– Aereo, Inc., today announced plans to launch its groundbreaking online television technology in the Atlanta metropolitan region. Beginning June 17, consumers who have pre-registered with Aereo will receive a special invitation to join and be one of the first to experience Aereo’s technology. After June 24, Aereo will make membership available to all eligible consumers across the Atlanta designated market area (DMA), which includes more than 5.3 million consumers in 55 counties across Georgia, Alabama and North Carolina. Atlanta joins Boston as the third city to launch as part of Aereo’s expansion announced in January. READ MORE »
The new rate schedule eliminates a low-priced option for those who want the streaming video service for at least a year. But Aereo says that by getting rid of daily and yearly pricing for new customers, it is simplifying the rate structure. New subscribers in New York and, beginning on Wednesday, in Boston can pay $8 a month for unlimited streaming of local broadcast station programming and 20 hours of remote DVR storage, or $12 for 60 hours of storage. That’s an improvement for those paying $12 a month. They currently can store up to 40 hours. Current subscribers with that plan will be bumped up to 60 hours. The company also says that new subscribers’ first month of service comes free — they can cancel at any time during the month — and there’s no long-term commitment. Yet Aereo is ditching an $80 a year plan with 40 hours of storage, and $1 a day with three hours. Current Aereo members can keep their existing rates until the membership period ends.
Let’s establish one fact before we look at the wheels that Sen. John McCain just set in motion with his new bill to end cable channel bundling (read it here). It won’t pass. This isn’t Mr. Smith Goes To Washington. And two things have changed since 2006, the last time the Arizona Republican tried — and failed — to promote a la carte cable pricing. He’s no longer on the Commerce Committee which likely would have to move the legislation forward. What’s more, his new Television Consumer Freedom Act of 2013 has a provision that would strip licenses from broadcasters who move programming to pay TV as Fox, CBS, and Univision have threatened if they lose their court challenge to streaming service Aereo. The provision ensures that the broadcast lobby will join cable to do everything in their power to defeat McCain’s bill. The National Cable & Telecommunications Association has already weighed in. Consumers “enjoy more choice than ever before,” it says adding: “In the face of such innovation and expansion, attempting to force retail models on private providers is unnecessary and counterproductive.” Regardless of what you think about the argument, McCain and his supporters can’t match the lobby groups’ muscle.
John McCain Introduces Cable A La Carte Legislation To Stop Bundling & Broadcasters Moving To Pay TV
John McCain wants to unbundle cable and to stop broadcasters like CBS and Fox from moving their stations to pay TV. The Arizona senator right now on the Senate floor is introducing The TV Consumer Freedom Act of 2013 (read it here). The legislation is intended to “allow the consumer, the television viewer who subscribes to cable, to have à la carte capability. In other words, not required to buy a whole bunch of channels that that consumer may not want wish to subscribe to,” McCain said moments ago. The former GOP Presidential candidate also went after broadcasters like CBS and Fox who have said that they could move to cable if they lose in the courts against Barry Diller’s Aereo streaming service. “We’ll also establish consequences if broadcasters choose to downgrade their over-the-air service,” McCain told the Senate. His legislation would also eliminate the sports blackout rule “in events that are held in publicly financed stadiums.”
The proposal is expected to meet heavy resistance among the cable companies. ”Only Dish and Cablevision have been for a la carte and smaller bundles because we think it’s consumer-friendly”, Dish Network chairman Charlie Ergen said during his company’s conference call today. “Having said that, there are five big groups that probably have enough clout in Congress to stop that legislation today. He added that “the marketplace is going to determine” if the price is too high. “There’s an awful lot of people who don’t consume (200 channels)”, he said, “and most of us would like to look for creative solutions”.
The stock is up 4.3% at mid-day, and poised to close at an all-time high, after the cable company reported a smaller loss than investors expected. Charter had a Q1 net loss of $42M, an improvement from the $94M loss a year ago, on revenues of $1.92B, +4.9%. Analysts predicted the top line would be a little lower, at $1.90B. But the net loss of 42 cents a share handily beat expectations for a 61 cent loss. The number of video subscribers fell 5% year over year to nearly 4M. But video revenues grew 6.8% to $956M due to rate increases and efforts to sell premium tiers and services. The Internet business was stronger with subs up 7% to 3.9M and revenues +10.8% to $501M. “While we still have more work to do, significant progress is evident in our first quarter results,” CEO Tom Rutledge says. He told analysts that due to programming price increases and broadcaster demands for retransmission consent payments cable operators have “very expensive bundles of video packages in our product mix that we as distributors can’t do much about at the moment….So it’s a difficult consumer proposition and the economy is still not great.”
The streaming video provider wants to block CBS — and, presumably, other broadcasters — from making good on a threat to file suits across the country to address the same issue: whether Aereo violates their copyrights. That’s already being debated at the U.S. District Court in New York, Aereo’s only current market. But CBS chief Les Moonves said last week that as Aereo expands — including in Boston this month — “we’ll sue them again” in different jurisdictions. “We’ll follow it.” Aereo asked the New York court this morning for a declaratory judgment that would try to establish it as the sole locale for the legal battle. Aereo plans to enter 21 additional markets this year after Boston and says that multiple suits “would be highly inefficient and a waste of judicial resources” since it would “involve the same technology, involve the same witnesses, and implicate the same legal and factual issues” raised in New York. Broadcasters may want to find a friendlier venue after the U.S. Appeals Court in New York rejected their effort to shut Aereo during the trial. Justices said that there was a good chance that Aereo could win.
Les Moonves is out to get Aereo by any means necessary, but he “doesn’t lose sleep over it,” the CBS Corp president and CEO told the Milken Institute’s Global Conference today. “Barry Diller has done what he likes to do, disrupt things,” Moonves added. However, the CBS chief did say that if the situation couldn’t be resolved in the courts, he is more than willing to take CBS to cable. “We can do it in a few days. If we go to cable, if we are forced to, then about 10% of America will not get our signal and I don’t think they will like that,” Moonves said Tuesday. The CBS chief said that with around 2,000 subscribers in NYC, the “illegal” Aereo won’t hurt the network but that he still intends to shut them down. “We will go after them in the courts and if that doesn’t work there are other remedies. There are financial remedies; there are congressional remedies.” On Monday at the conference, IAC CEO Diller said that CBS and the other broadcasters suing Aereo want Congress to save them if their copyright infringement suits fail. Fox and Univision have also threatened to move to cable if Aereo prevails.
The IAC chief, a major investor in Aereo, says that’s what’s behind recent threats by Fox, CBS, and Univision execs to turn their broadcast networks into pay TV channels if they lose their copyright infringement case against the streaming service. “The law of the U.S. is that if you …
That’s the day when 4.5M people served by Boston’s TV stations who pre-register will be able to stream local broadcast programming from Aereo. Others in Massachusetts, New Hampshire and Vermont will be able to subscribe at the end of May. This is the first time Aereo will offer its service outside the New York City area, and is part of the company’s announced plan to expand to 22 markets in 2013. But it also could intensify the Barry Diller-backed company’s fight with broadcasters: It will stream programming from 28 over-the-air channels in Boston without their permission. (Aereo also has an agreement with Bloomberg Television to offer its pay TV channel.) Broadcasters in New York have already taken Aereo to court, alleging that it violates their copyrights. The company counters that it simply rents antennas, enabling subscribers to watch programming that’s already available to them for free. It adds that consumers also have the right to stream their content, much like they would if they bought a Slingbox.
Listen to (and share) our audio podcast Deadline Big Media With David Lieberman as our executive editor and host David Bloom talk about broadcaster threats to abandon the airwaves for pay cable if Aereo wins; a gloomy Fitch’s report on the exhibition business just ahead of next week’s CinemaCon gathering in Las Vegas; and what ultrafast internet connections such as Google Fiber might mean for Hollywood.
CBS‘ Chief Research Officer David Poltrack wouldn’t directly answer this morning’s big question: whether his company might turn its broadcast network into a pay TV channel if the courts rule that Aereo can stream over-the-air programming without payment — something that Fox and Univision said yesterday that they’re weighing. But the CBS exec left no doubt that it considers the attacks to its business model from Aereo and Dish Network’s Hopper DVR — which can automatically skip over ads in recorded shows — to be front-burner issues. Content “is our most important asset, and we’re going to protect it every way possible,” Poltrack said at a pre-upfront market panel about changes in TV advertising. He added that “Aereo is an example” of a view among lawmakers and others that broadcasting can withstand the new challenges. “They’re so confused and misinformed about the nature of the business, and that is a danger.” Still, he had some fun with the issue, telling Fox Cable Networks’ ad sales EVP Bruce Lefkowitz that he wanted to congratulate him “on the addition of Fox Broadcasting to his cable portfolio.”
BREAKING…This would be a nuclear option for News Corp, which owns 27 TV stations and serves dozens of affiliates. But the company COO’s threat to take Fox off the public airwaves — made today at the NAB annual confab in Las Vegas — suggests how deeply concerned broadcast moguls are about the possibility that they might lose their legal battle against Aereo, and how much that could undermine their ability to extract retransmission consent fees from cable and satellite providers. Aereo uses tiny antennas to capture broadcasters’ over-the-air signals which it then streams to local subscribers. It does so without TV stations’ permission, and without paying them a dime. Broadcasters say that violates their copyrights. But last week a U.S. Appeals Court rejected the industry’s plea to shutter Aereo during the trial over that claim. What’s more, it seemed to favor Aereo’s counterargument that it simply rents antennas, enabling customers to watch transmissions already available to them for free.
If Aereo prevails — and cable and satellite companies decide that they, too, can retransmit broadcast signals for free — then Carey says “We have no choice but to develop business solutions that ensure we continue to remain in the driver’s seat of our own destiny. One option could be converting the Fox broadcast network to a pay channel, which we would do in collaboration with both our content partners and affiliates.” News Corp-owned stations collected about $308M in retransmission consent fees last year, SNL Kagan estimates. That’s up 20% vs 2011 and accounted for about 19% of their total revenues.
Listen to (and share) our audio podcast Deadline Big Media With David Lieberman as our executive editor and host David Bloom talk about a big win in the courts for Aereo’s video service and what that means for broadcast investors; whether we’ve reached Peak Netflix as company shares began a precipitous fall this week; and if CBS is going to ruin the stock buyback party for all of its big media counterparts.
Aereo‘s Chet Kanojia made the comment today on CNBC. He mostly reveled in the potentially important court victory yesterday that allows his streaming service to continue operating while it defends itself against a suit from broadcasters who say it violates their copyrights. The appeals court ruling …
The Barry Diller-backed Aereo got a big legal win from the Second Circuit Court of Appeals today, but broadcasters vow to fight on. The federal court says a U.S. District judge was right last year to refuse broadcasters an injunction against the controversial service that streams broadcasters’ over-the-air signals to its subscribers. “We conclude that Aereo’s transmissions of unique copies of broadcast television programs created at its users’ requests and transmitted while the programs are still airing on broadcast television are not “public performances” of the Plaintiffs’ copyrighted works under Cablevision,” said Judge Christopher Droney writing for the majority (read it here). Said Aereo CEO Chet Kanojia in a statement after the ruling: “We may be a small start-up, but we’ve always believed in standing up and fighting for our consumers. We are grateful for the court’s thoughtful analysis and decision and we look forward to continuing to build a successful business that puts consumers first.”
This is a nightmare scenario for broadcasters, although it appears from The Wall Street Journal’s report this morning that no deals are imminent. The story says that Aereo — the controversial Barry Diller-backed service that streams broadcasters’ over-the-air signals to its subscribers — has been chatting with companies including Dish Network and AT&T about potential package deals. Citing “people familiar with the matter,” the story says AT&T could offer broadband customers a deal that includes Aereo’s TV programming. Dish also could use Aereo as part of a small and low-cost package of channels that it would stream to subscribers. These ideas likely won’t move beyond the talking stage as long as broadcasters — including all of the leading networks — are asking the courts to rule that Aereo infringes on their copyrights. They say it appropriates their programming without their permission, and without paying them a dime. Aereo counters that it merely streams local signals that broadcasters already provide for free to anyone who has an antenna.