It was a major setback for broadcasters on 1 April 2013 when a federal appeals court in New York upheld a ruling in favor of Aereo. The broadcasters have been trying to sue Aereo out of existence for over a year!
This may be the beginning of the end of cable companies.
What is Aereo? It is a technology company based in New York City that allows subscribers to view content on Internet-connected devices. Imagine being able to watch and record live broadcasts on your tablet or smart phone or phoblet as some of them are called now a days !
Why do TV or Cable companies hate, now fear Aereo? Aereo does not pay networks for the free-to-air channels it streams. It allows people to receive content without paying for the bundles of channels from which cable firms derive their profits.
How are Cable or TV companies responding? I am sure the initial response was to simply ignore, later as one would expect waste over a year trying to get the court to shut down Aereo.
Let’s look at the sequence of events that I believe have led to this:
- Tablet (iPad to be precise) is the disruptive innovation that has kicked PC industry to a corner.
- Windows 8 is having no effect on arresting the decline in PC sales. It is said significant number of customers instead of spending money on upgrading their PC’s are buying Tablets and retaining their existing PC.
- Video sharing sites like YouTube brought changes in consumer behavior – most of us watch considerable amount of video on our internet connected devices.
- It was only a matter of time before someone would think of streaming live content to these devices – hence Aereo!
The question why or how cable or TV broadcasting companies did not think of doing it themselves?
If history is any indication, not too long ago recording companies refused to see the changes in their consumer behavior as a result of MP3 and paid the price!
Coming back to the story of Cable companies, now that the court has refused to do their work they have finally started getting their act together. CBS has announced that they have acquired a minority stake in Syncbak a local TV streaming venture.
The question is: Are they already too late?
This would be an interesting space to watch as this is yet another industry that refused to understand changes in their consumer’s behavior driven by technology.