It remains to be seen whether cable operators will try to mimic Aereo if its approach to delivering broadcast TV — without paying for it — passes muster at the Supreme Court.
But at least one major MSO was interested enough in Aereo that it was ready to buy a stake in the company: Liberty Global, the international cable operator led by chairman John Malone, at one point considered investing in the TV-streaming startup but ultimately decided not to, according to chief technology officer Balan Nair, speaking at the Cable Show 2014. He declined to elaborate on why Liberty Global passed.
Other top tech execs at cable companies are watching the case closely, which will decide the fate of Aereo’s service for providing live TV and DVR capabilities for broadcast programming delivered to various Internet devices. The Supreme Court will issue a ruling in the case by early July.
Those execs with an eye on the case include Yvette Kanouff, exec VP of corporate engineering and technology for Cablevision Systems. The Supreme Court upheld the legality of Cablevision’s network-based DVR in 2008, and that decision is a key precedent Aereo is using to defend its service.
Kanouff, speaking on a panel of cable CTOs, said that after the Supreme Court heard oral arguments in the case last week, “We feel really strongly about our position… and what we can offer.” Cablevision and other MSOs are concerned that a ruling against Aereo could threaten the legal status of network DVRs if the decision is rendered broadly.
Broadcasters have sued Aereo for copyright infringement. Aereo has argued that it complies with copyright laws by allocating dedicated antennas and DVR storage to individual users, in the way Cablevision’s remote DVR does. IAC chairman Barry Diller, whose company is an investor in Aereo, has said Aereo will be “finished” if it loses the case.
Tony Werner, exec VP and CTO of Comcast Cable, said the case was too close to call. “I think both lawyers made good arguments,” he said. “It’s going to be a tough job for the Supreme Court to make a decision. What’s clear to me is they were concerned about how it relates to cloud computing and cloud storage.”
For cable operators, offering an Aereo-like service could help them avoid paying billions in retransmission-consent fees to broadcasters. But making such a move would be complicated by long-term deals the MSOs already have with broadcasters. Meanwhile, the media companies that own the broadcast nets also own cable channels and could withhold their cable programming if MSOs go down the Aereo path. And for Comcast, there’s the added wrinkle that it owns NBCUniversal.
New York-based Aereo has raised about $97 million in funding to date. Investors include IAC, media investor Gordon Crawford, Himalaya Capital Management, Highland Capital Partners, FirstMark Capital, High Line Venture Partners, Lauder Partners and SV Angel.
Aereo is currently available in 11 metro areas: New York, Boston, Atlanta, Miami, Houston, Dallas, Detroit, Baltimore, Cincinnati, San Antonio and Austin, Texas. The startup — if it prevails at the Supreme Court — plans to launch in additional cities throughout 2014.