Diller Makes Headlines with Aereo

Media Mogul Barry Diller is making headlines with his investment in Aereo, a new media company that will provide remote DVR storage and streaming of broadcast content. Aereo announced that it has raised $20.5 million in Series A funding led by Diller’s IAC. Diller also has a board seat.

Aereo plans to provide up to 40 hours of DVR space for $12 per month with the content being streamed to internet enabled devices (smart phones, tablets, web enabled TVs, etc.). For starters, Aereo in intends to offer the service to consumers in the New York City DMA starting in mid March. Initial reports of the technology are that it involves an array of tiny antennas, each dedicated to a single customer, feeding the hard drive (DVR) storage. It seems that the company is taking this tact in order to make the claim that they are an antenna rental service and not a multichannel service provider. In doing so, Aereo hopes to avoid the need to negotiate and pay retransmission consent fees and capture the “cord cutting” segment of the market with a product that would complement a consumer’s ability to receive cable programming via the likes of Netflix and Hulu+.

In the mean time, cable operators are reacting to declining subscriber numbers by starting to test and deploy lower cost packages that that have been stripped of expensive sports programming. Broadcasters are still talking about mobile digital broadcast services without much to show for it in the market. Both the cable ops and the broadcasters continue to arm wrestle over retransmission consent fees with the FCC almost a year into the process of a proposed notice of rulemaking on retransmission consent – but that’s another blog entry.

For now the initial news is out about Aereo’s plans have been announced. It is more than likely that New York area broadcasters are huddling with their attorneys this morning on the news to explore their options. One just has to wonder if the next headline will be “Broadcasters Attempt to Shoot Down Aereo with Cease and Desist Orders”.

Miami Retrans Spat Takes Unexpected Turn

In an almost unheard of turn of events, a broadcaster who has withheld their signal in the Miami DMA is permitting DirecTV to air its coverage of this weekend’s NFC Championship game between the New York Giants and the San Francisco 49ers. Fox affiliate WSVN is permitting the satcaster to carry the game as a one time exception while they continue to hammer out a retransmission consent agreement.

Typically, broadcasters leverage their carriage of marquee programming and events in order to gain higher retrans payments. It seems that this time snowbirds in high-rises are causing WSVN to think twice. The typical tact is to encourage viewers to switch providers in order to continue to see their programming. The rub in the Miami market is that many of the people who would be most interested in the game (retirees and folks from the northeast who are in FL to escape the cold and snow back home) are in high rise condo buildings. Many of these buildings have exclusive contracts with DirecTV to provide video to the buildings. For these viewers, antennas and alternate providers are out of the question.

Putting aside the usual “he said, she said” stuff that is tossed around during retrans black-outs, you have to give WSVN credit for permitting carriage of the game. In taking the high road, perhaps they put more pressure on DirecTV; painting themselves as the ones who care more about the viewers. On the other hand, aside from the upcoming Republican Primary and general election, the game is likely one of their more lucrative ad sales opportunities for the year. Why would they not want to have the maximum number of viewers? Either way you slice it, it saves a lot of retirees the trouble of calling their kids back north to ask how cold it is, and while they are on the phone to also ask how to hook up a digital antenna with a DirecTV box and a DVD player.