# Aereo and the business model of broadcast television **URL:** \ **Category:** Factual Questions\ **Created:** [April 25, 2014, 10:17pm UTC](https://boards.straightdope.com/t/aereo-and-the-business-model-of-broadcast-television/686994 "2014-04-25T22:17:45Z")\ **Posts on this page:** 12\ **Page:** 1
**Author:** ![bizerta](https://avatars.discourse-cdn.com/v4/letter/b/3be4f8/32.png) [@bizerta](https://boards.straightdope.com/u/bizerta)\ **Post date:** [April 25, 2014, 10:17pm UTC](https://boards.straightdope.com/t/aereo-and-the-business-model-of-broadcast-television/686994/1 "2014-04-25T22:17:45Z")
Aereo and broadcasters have been to the Supreme Court over Aereo’s “right” to over-the-air (OTA) television. Do they really capture OTA television with a dime-sized antenna? or do they simply add “your” antenna to their own dish? I don’t have cable and I receive about 25 OTA channels in the Boston area. If, for example, CBS wants the revenue from Comcast/Verizon/Disn/TimeWarner for retransmission, then why do they allow WBZ to give it to me for free? If Aereo wins, there have been threats by some networks to cease OTA broadcasts. What is the likelihood of that? Will I be doomed to reruns of Taxi, Lucy, and 3-year old network shows? Editorial: Personally, I don’t think this should be a Constitutional issue. Congress should set the rule here. ---
**Author:** ![RealityChuck](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/realitychuck/32/195_2.png) [@RealityChuck](https://boards.straightdope.com/u/RealityChuck)\ **Post date:** [April 25, 2014, 10:27pm UTC](https://boards.straightdope.com/t/aereo-and-the-business-model-of-broadcast-television/686994/2 "2014-04-25T22:27:38Z")
There is a rule. It’s called copyright law. Basically, the networks pay a lot of money to produce TV shows (an hour of drama costs more than a million dollars). If they can’t get that money back, they go out of business. They get their money by charging advertisers, and the rates are set by the number of viewers. If the network can’t provide the viewers, they have to lower their rates and then have less money. Less money = less money for programming = less programming. Aero meanwhile pays nothing for its content. It’s easy to make money when you don’t pay your suppliers. It’s like hijacking cars from car carriers and selling them. If Aero wins, the networks are in big trouble and will have less and less original dramatic programming (comedies, too). It would be nothing but what can be done cheaply: talk shows and reality shows. (Certainly no sports programming, either.) At the very least, Aero has to be forced to pay for what they’re selling. ---
**Author:** ![dolphinboy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dolphinboy/32/330_2.png) [@dolphinboy](https://boards.straightdope.com/u/dolphinboy)\ **Post date:** [April 25, 2014, 10:45pm UTC](https://boards.straightdope.com/t/aereo-and-the-business-model-of-broadcast-television/686994/3 "2014-04-25T22:45:24Z")
I don’t think anyone expects Aereo to win in the SC, but I guess it’s worth a shot. ---
**Author:** ![PastTense](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pasttense/32/14550_2.png) [@PastTense](https://boards.straightdope.com/u/PastTense)\ **Post date:** [April 25, 2014, 10:54pm UTC](https://boards.straightdope.com/t/aereo-and-the-business-model-of-broadcast-television/686994/4 "2014-04-25T22:54:43Z")
There is already an extensive current thread: [http://boards.straightdope.com/sdmb/showthread.php?p=17321724](http://boards.straightdope.com/sdmb/showthread.php?p=17321724) ---
**Author:** ![Precambrianmollusc](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/precambrianmollusc/32/63_2.png) [@Precambrianmollusc](https://boards.straightdope.com/u/Precambrianmollusc)\ **Post date:** [April 25, 2014, 10:56pm UTC](https://boards.straightdope.com/t/aereo-and-the-business-model-of-broadcast-television/686994/5 "2014-04-25T22:56:07Z")
Aero does not let you strip out the advertising, so the same adverts are being seen by people for OTA, via retransmission via cable and by Aero. If anything it is broadening the number of people who see the advertising. Although people using Aero are most likely people who cut the cable, so maybe just keeping the numbers the same. As for the actual question, Aereo do claim to have an antennae for each subscriber, google aereo antennae images to see what they look like. I assume they have to take the signal from those antennae rather than just have them as fake antennae and rebroadcast from a bigger useable antennae. ---
**Author:** ![friedo](https://avatars.discourse-cdn.com/v4/letter/f/8edcca/32.png) [@friedo](https://boards.straightdope.com/u/friedo)\ **Post date:** [April 25, 2014, 10:58pm UTC](https://boards.straightdope.com/t/aereo-and-the-business-model-of-broadcast-television/686994/6 "2014-04-25T22:58:56Z")
> [@RealityChuck](#): > > Aero meanwhile pays nothing for its content. Neither does anyone else (in the USA) who receives OTA television. > [@](#): > > It’s easy to make money when you don’t pay your suppliers. It’s like hijacking cars from car carriers and selling them. This is an absurd statement. > [@](#): > > If Aero wins, the networks are in big trouble and will have less and less original dramatic programming (comedies, too). It would be nothing but what can be done cheaply: talk shows and reality shows. (Certainly no sports programming, either.) The networks are not in any trouble of Aereo wins. They will continue to make money by selling advertising. Cable companies pay television networks for retransmission rights because they are required to do so under the Cable Television Protection and Competition Act of 1992. Prior to that, cable companies were not required to pay fees to retransmit OTA signals. (If they wanted to make a separate arrangement with local stations to receive a direct feed, then they could pay to do that, but it wasn’t required.) Cable companies are in fact _required_ under the 1992 Act to carry local OTA stations. The only exception is if a station owner elects to demand retransmission consent under the “must carry” rule. In that case, the cable operator is free to pay for retransmission rights or drop carriage of the channel. This rule was designed as a subsidy of sorts for independent broadcasters: they could ensure that their signal would always be carried by cable if they did not demand a fee. It actually had the effect of strengthening affiliated stations who were in a much better position to bargain for access, and weakening independent stations who would be dropped if they chose to forgo “must carry.” > [@bizerta](#): > > Do they really capture OTA television with a dime-sized antenna? or do they simply add “your” antenna to their own dish? They really do use big arrays of relatively tiny antennas. (They don’t have any dishes.) The signals from the antenna are routed via their specialized hardware over the internet for people to stream. They only allow one customer to use an antenna at a given time, though you don’t have a dedicated antenna that belongs to you. They are assigned on an as-needed basis when you use the service. > [@](#): > > I don’t have cable and I receive about 25 OTA channels in the Boston area. If, for example, CBS wants the revenue from Comcast/Verizon/Disn/TimeWarner for retransmission, then why do they allow WBZ to give it to me for free? Broadcast television operators make their signals available for free over the air. Anybody with an antenna is free to receive them at no cost. This does not apply to cable stations (like CNN or HBO) who only transmit their signals to cable companies. > [@](#): > > If Aereo wins, there have been threats by some networks to cease OTA broadcasts. What is the likelihood of that? Will I be doomed to reruns of Taxi, Lucy, and 3-year old network shows? It seems unlikely to me. A lot of executives in the broadcast industry are still gearing up to fight the last century’s battles. Many don’t understand that Aereo actually increases their viewership and value to broadcasters, as if their transmitter towers are getting a boost for free. If the Court decides that Aereo meets the definition of a “multichannel video programming distributor,” then the stations will have the right to negotiate for retransmission fees. Aereo will probably just increase the price of their service rather than shutting down. ---
**Author:** ![Lord\_Feldon](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lord_feldon/32/341_2.png) [@Lord\_Feldon](https://boards.straightdope.com/u/Lord_Feldon)\ **Post date:** [April 25, 2014, 11:00pm UTC](https://boards.straightdope.com/t/aereo-and-the-business-model-of-broadcast-television/686994/7 "2014-04-25T23:00:27Z")
> [@bizerta](#): > > Editorial: Personally, I don’t think this should be a Constitutional issue. Congress should set the rule here. AFAIK this is what’s happening. The courts are deciding what rules Congress has set. > [@RealityChuck](#): > > They get their money by charging advertisers, and the rates are set by the number of viewers. If the network can’t provide the viewers, they have to lower their rates and then have less money. Less money = less money for programming = less programming. 😕 People using Aereo _are_ viewers. ---
**Author:** ![friedo](https://avatars.discourse-cdn.com/v4/letter/f/8edcca/32.png) [@friedo](https://boards.straightdope.com/u/friedo)\ **Post date:** [April 25, 2014, 11:04pm UTC](https://boards.straightdope.com/t/aereo-and-the-business-model-of-broadcast-television/686994/8 "2014-04-25T23:04:56Z")
Most Supreme Court cases do not involve Constitutional controversies. They spend most of their time interpreting existing statutes and resolving differences in precedent between the appellate courts. ---
**Author:** ![Precambrianmollusc](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/precambrianmollusc/32/63_2.png) [@Precambrianmollusc](https://boards.straightdope.com/u/Precambrianmollusc)\ **Post date:** [April 25, 2014, 11:21pm UTC](https://boards.straightdope.com/t/aereo-and-the-business-model-of-broadcast-television/686994/9 "2014-04-25T23:21:43Z")
> [@friedo](#): > > It seems unlikely to me. A lot of executives in the broadcast industry are still gearing up to fight the last century’s battles. Many don’t understand that Aereo actually increases their viewership and value to broadcasters, as if their transmitter towers are getting a boost for free. To my mind the networks should have embraced Aereo and worked with them and sorted out a way that each viewer would see the programs and the adverts which would be targeted adverts based on the Aereo viewer profile/ watching habits. Could have saved the networks huge amounts of cash in infrastructure when they set up their own streaming services. ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [April 26, 2014, 12:54am UTC](https://boards.straightdope.com/t/aereo-and-the-business-model-of-broadcast-television/686994/10 "2014-04-26T00:54:41Z")
One analysis I read of the Aereo case suggested that if Aereo wins, the cable companies might stop paying the retransmission fees they pay to the broadcast networks (these fees amount to about three billion). And if that happens, the broadcast networks could decide to stop broadcasting and become cable networks. ---
**Author:** ![urban1a](https://avatars.discourse-cdn.com/v4/letter/u/e47c2d/32.png) [@urban1a](https://boards.straightdope.com/u/urban1a)\ **Post date:** [April 26, 2014, 1:18am UTC](https://boards.straightdope.com/t/aereo-and-the-business-model-of-broadcast-television/686994/11 "2014-04-26T01:18:15Z")
I doubt that cable (as we currently know it) will still be in existence in 10 - 15 years. People (especially young people) don’t want to pay for hundreds of bundled channels anymore when they only watch a few. The likely replacement will involve the internet in some way with consumers paying only for the shows they want. I don’t know whether Aereo will still be involved, but there likely will continue to be OTA broadcasting. You heard it here first (or second). Bob ---
**Author:** ![engineer\_comp\_geek](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/engineer_comp_geek/32/504_2.png) [@engineer\_comp\_geek](https://boards.straightdope.com/u/engineer_comp_geek)\ **Post date:** [April 26, 2014, 1:37am UTC](https://boards.straightdope.com/t/aereo-and-the-business-model-of-broadcast-television/686994/12 "2014-04-26T01:37:45Z")
**Moderator Action** This thread has strayed well outside of GQ territory. I think merging this into one of the existing threads about Aereo would just cause confusion. so I am just going to close this one and direct those who wish to make further comments to this thread in Great Debates: > **[Keep your fingers crossed Aereo customers. Today's our day in the SCOTUS.](https://boards.straightdope.com/sdmb/showthread.php?t=721514)** > > I really hope they win. I waited for these guys to come to my city before I cut the cable. I don’t know what I’ll do if they lose! Thread closed.