We all know television is big business. And that how we get our television is possibly even more lucrative. Whether it's Netflix, Hulu, or HBO GO, innovations in broadcast are all the rage.
But there's one company that has TV executives tearing their hair out. It's called Aereo, and it's making a splash using a very old tool: the good old fashioned antenna.
Aereo grabs the broadcast networks' free-to-air signal and beams it to your iPad or computer. You as the consumer pay Aereo for the service. The broadcaster, however, does not get a slice.
"Supposedly there's a warehouse in Brooklyn full of tiny little sort of quarter-sized antennas," Kafka says. "You tell Aereo, 'hey I want to record something,' it tells one of these antennas."
That recording is then sent almost in realtime to your computer or tablet. Broadcasters call it piracy, but so far, courts have upheld Aereo's right to grab the free airwaves, in the same way consumers can use a personal antenna to watch TV.
Network executives are so perturbed, the COO of News Corp. told an industry conference, Monday, that it might take its subsidiary network Fox off the free TV airwaves altogether. Univision followed with a similar threat.
It's merely a threat, Kafka says. "This is the definition of saber rattling. Even if they wanted to take their ball and go home, they couldn't do so right away."
Univision acknowledged that going to cable-only would have a big impact on its viewership. In a press release the Spanish-language broadcaster noted that Hispanics watch free TV through an antenna at twice the rate of the average viewer.
So far, Aereo is available only in the New York City market. But it plans to roll out in 22 additional U.S. cities later this year. Interested consumers have two service plans to choose from, at a cost of $8 and $12 per month. Or $1 for a single day pass.
Whether the company can turn a profit on those supercharged rabbit ears remains to be seen.
"I'm not convinced this is a mainstream product," Kafka says. "Remember what they're doing is giving you access to broadcast TV, that's 4 or 5 major networks, and nothing else right now. I don't think most people who get cable TV would be satisfied with that."