As Aereo awaits for the decision of the US Supreme Court about the company's future on Tuesday, Businessweek said that even if the court sided in favor with the Internet-television service, it may not change television the way people see it.
Television broadcasters have complained that Aereo's service is violating their copyrights via its farms of antennas and renting them to its subscribers. On the other hand, Businessweek said that the broadcasters' concern is rather on the economics side, as Aereo's business model allows them to not pay retransmission fees. Citing SNL kagan, the revenues broadcasters generate from the fees, which started about a decade ago, will reach $4 billion this year. Other than that, the argument that Aereo will threaten the pay-television industry actually has its holes, Businessweek said.
For one, Aereo is not the only one in the market that is offering a lower cost, convenient way to view programs. As a company who offers digital video recorders to access broadcast signals via digital antennas, it is facing competition from TiVO (TIVO), Simple.TV, and Tablo. Moreover, Businessweek said that considering the fact that television service has been waning in favor of cable for years, Aereo's broadcast content relies much on pay television. Also, the startup's market is definitely small, as it currently offers its services in 11 cities in the US.
But broadcasters might have been sweating over the Supreme Court's decision on the legality of Aereo's services for another, much more threatening reason. The decision might give way to deep-pocketed cable companies and bigger Web companies who are looking into integrating some of Aereo's antenna-farm concept.
Digital media analyst Dan Rayburn told the news agency, "Aereo doesn't have the name recognition or the reach to really disrupt the market. The reason the broadcasters are fighting this is that they're worried about the idea."
