While viewed largely as saber-rattling, the idea that the networks could be converted into cable channels gained attention in the television world because such a move would have wide-reaching implications for viewers and station owners.
The possibility had not been publicly broached by a major broadcaster until Chase Carey, the chief operating officer of Fox’s parent, News Corporation, spoke at a conference of broadcasters on Monday morning.
Later in the day, Haim Saban, the chairman of Univision, lined up with Fox, calling Aereo a pirate and saying, “To serve our community, we need to protect our product and revenue streams and therefore we, too, are considering all of our options — including converting to pay TV.”
One week ago, a federal appeals court rejected broadcasters’ attempts to shut down Aereo. The service uses an array of tiny antennas to pick up free signals from stations in New York, including two owned by News Corporation, and streams the stations to paying subscribers’ devices.
Aereo is promoted as an alternative to cable, with only a fraction of the channels but at a fraction of the cost, and it allows for easy viewing of live TV on phones and tablets.
Aereo says its service is legal because each viewer has an individually assigned antenna, not unlike viewers with rabbit ears hooked up to their TVs. But owners of local stations disagree. Aereo is backed by Barry Diller, who founded Fox with Rupert Murdoch nearly 30 years ago.
“Aereo is stealing our signal,” Mr. Carey said Monday, repeating what owners have said since a group of them sued the service a year ago. He said the stations would keep up their legal battle, though he did not specify how.
He said that although News Corporation is committed to the broadcasting business model for now, it could abandon the airwaves if Aereo remains intact.
The comments seemed aimed at lawmakers who might side with broadcasters in responding to the perceived threat posed by Aereo. The threat is specifically aimed at retransmission fees, which have become a crucial second source of revenue for stations as ad losses mount.
The appeals court ruling in favor of Aereo could lead cable and satellite operators to set up their own antenna arrays and use them to avoid retransmission fees, or at least threaten to do so.
Reacting to Mr. Carey’s comments, Aereo said in a statement, “It’s disappointing to hear that Fox believes that consumers should not be permitted to use an antenna to access free-to-air broadcast television.” Aereo invoked the origins of TV, when Congress handed over valuable public airwaves “with the promise that they would broadcast in the public interest and convenience, and that they would remain free-to-air.”
Article source: http://www.nytimes.com/2013/04/09/business/media/fox-hints-it-might-leave-the-airwaves.html?partner=rss&emc=rss
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