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Fox and Univision threaten move to cable over Aereo's tiny TV antennas

Aereo antenna array.

An Aereo antenna compared to a dime.

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.

Peter Kafka is a senior editor at All Things D who has been following Aereo's run-ins with broadcasters.

"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."

About the author

Kai Ryssdal is the host and senior editor of Marketplace, public radio’s program on business and the economy.

An Aereo antenna compared to a dime.

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If the broadcasters "take their ball and go home," do we, the people, get our broadcast spectrum back so we can use it for more useful things, like faster/cheaper/more wireless data services? Spectrum for the broadcasters is basically corporate welfare anyway, so we should be cheering on Aereo.

I would remind those over the air network broadcasters that the real strength they have is not what they produce; but the audience that watches what they produce. So if you decide, Fox, NBC, and other over the air networks, to take what you produce and only sell it to those who will purchase it I assure you there will be others of us who will be more than happy to provide the content to attract the audience and take away the real strength you once held. After all the new media paradigm and audience power is coming and the old media better catch on up or will be in the dark.

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