Can Broadcasters Beat Aereo at Its Own Game?

Can Broadcasters Beat Aereo at Its Own Game?

Networks could cut into livestreaming service's business by livestreaming themselves

The day may be close when you can watch your favorite broadcast TV shows live on your phone, tablet, or laptop. The question is who might provide them.

Aereo, a New York City startup backed by Barry Diller, would like to be the company that makes livstreaming commonplace. The year-old business transmits live TV shows from broadcast networks – like ABC, CBS, the CW, Fox, NBC, PBS, and Univision – to any device. It does it with lots of tiny antennae.

But it might also be broadcasters themselves — and two of them, ABC and NBC, are already working on livestreaming. That could be bad for Aereo.

Broadcasters aren't fans of the new company for a couple of reasons. First, Aereo wants to pull people away from their TVs. And it also allows them to store shows and then fastforward through the commercials — the commercials that let networks pay for shows. (Viewers can also pause and rewind, just like they can with shows they DVR.)

Also read: Disney's Anne Sweeney Calls Barry Diller's Aereo ‘Opportunistic Piracy’

Networks say they don't consider Aereo a real threat – but they act like they do. They're suing the company under the claim that its use of their signals amounts to illegal retransmission. And several network executives have threatened to abandon the broadcast airwaves for cable, since Aereo only picks up shows reachable by antennae. (That's always been Aereo's main defense – that all it does is harness the power of the humble, and very legal, antennae.)

But networks' best weapon against Aereo may not even be in court. In fact, they may be able to reduce demand for the $8-a-month streaming service by simply livestreaming themselves.

What differentiates ABC and NBC's livestreaming from Aereo's is that no one disputes their right to make their own shows available online at the same time they air on TV.

Also read: Turner Upfront: TNT, TBS to Offer Nationwide Live Streaming, Debut New Slates

Not that broadcasters' reasons for livestreaming have anything to do with Aereo. They say their attempts to make their shows available across more platforms is about making viewers' happy.

“From our own research as well as that of others, we know consumers want choice and flexibility when it comes to when and how they watch their favorite shows," an ABC spokeswoman said. "We've seen there to be a huge appetite for viewing on alternate platforms, especially tablets.”

One broadcast executive told TheWrap that all networks will probably livestream, eventually.

"Through legitimate channels, content is going to be ubiquitously available," the executive said. "In the long run, consumers are going to get their content in multiple ways – including broadcast and live streaming. It's simply the way the market is going."

Also read: Aereo CEO: Hollywood Apathy, 'Irrelevant' Ads Inspired the Controversial Service

Aereo declined comment for this story.

Networks already offer next-day online viewing of their shows on websites ranging from CBS.com to Hulu. But livestreaming allows viewers to watch shows online at the moment they air on television.

It is already becoming more common: NBC livestreamed much of its London Olympic Games last year, and is now livestreaming NHL coverage. By mid-2014, it plans to begin offering livestreaming nationwide through its affiliates.

ABC, meanwhile, is offering livestreaming this summer in several markets, including New York City and Boston, the only two cities where Aereo is currently available. Aereo plans to expand Monday to Atlanta, where ABC has no immediate plans to offer livestreaming.

ABC is following the lead of its corporate cable cousins, ESPN, Disney, Disney XD, and Disney Junior, which already livestream.

And TNT and TBS announced last month that they will soon become the first entertainment networks to livestream nationwide.

Also read: Aereo Expanding to Atlanta Next; Sets June Launch Date

Unlike those cable stations, broadcast networks give their shows away to anyone who has an antennae – and is willing to sit through some ads. Broadcasters also receive retransmission fees from cable companies that carry their programming.

But Aereo doesn't pay retransmission fees or require viewers to sit through ads. That doesn't sit well with networks, which is why they've sued.

In April, the 2nd U.S. Circuit Court of Appeals in New York accepted Aereo's contention that it isn't retransmitting signals. But the court fight continues.

Network executives including Fox's Chase Carey have also threatened to leave the airwaves for cable to avoid the reach of Aereo's antennae. But that would be a worst-case scenario, and won't come true unless Aereo begins to reach a much larger audience.

Even with Atlanta, Aereo will only be available in three markets, though it plans to expand to 20 more. It announced in January that it had raised $38 million, adding to $20.5 million from a previous round of fundraising.

Broadcasters also like to point out that it's unclear how many people have actually signed up for Aereo, since it's a private company that doesn't disclose subscription numbers.

Brian Wieser, a senior analyst at Pivotal Research Group, has suggested broadcasters relax a little. He believes that making big threats will only turn lawmakers against them. He noted a provision in a recent bill by Sen. John McCain that would ban broadcasters from fleeing to cable.

It's unclear when or if other networks will follow ABC and NBC in offering live online programming.

CBS, an investor in the streaming company Syncbak, says it has no near-term plans to livestream. A Fox representative declined to comment on any possible livestreaming plans, and said of Aereo only that the network takes "protecting our copyrights seriously." The CW said it has no plans to livestream.

ABC began livestreaming in New York and Philadelphia in May, and this summer will start in six other markets with stations owned by the network: Los Angeles, Chicago, San Francisco, Houston, Raleigh-Durham, and Fresno. It also has an agreement to offer livestreaming through Hearst-owned ABC stations in cities including Boston, Pittsburgh, Kansas City and Milwaukee. Viewers must be be cable or satellite subscribers to livestream ABC.

When NBC begins offering livestreaming through its affiliates, its viewers will also need to enter proof that they have cable or satellite subscriptions.