Aereo, a two-year-old startup backed by media mogul Barry Diller, has infuriated the major broadcasters because the company pays nothing to capture free, over-the-air TV programming using thousands of dime-sized antennas that are rented to individual users. Aereo then transmits that content to its customers over the Internet for $8-$12 per month. The broadcasters, including ABC, CBS, NBC and FOX, say this amounts to blatant theft.
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If the Supreme Court rules that Aereo’s service is legal, the decision could throw a wrench into the highly lucrative broadcast business model, in which cable and satellite companies pay billions to the TV companies for the right to broadcast popular programming. Such retransmission fees are projected to reach $4 billion this year and $7.6 billion by 2019, according to research firm SNL Kagan.
The broadcasters say that an Aereo victory could prompt them to yank their programming from free TV and move it to pay channels like Showtime. The National Football League and Major League Baseball, which are supporting the TV companies, have threatened to take high-profile broadcasts like the Super Bowl and World Series to cable. Aereo says such a move would “disenfranchise” millions of Americans who still rely on antennas for local news and other programming.
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