Broadcast TV networks have failed twice to get the courts to stop a start-up called Aereo Inc. from capturing the networks’ broadcast signal on an antenna leased to a subscriber and then piping a stream to that subscriber. Now News Corp. (NASDAQ: NWSA) says it could eliminate its Fox broadcast network signal and become solely a cable channel.
In addition to the threat from Aereo, broadcasters and cable channels are raging at Dish Network Corp. (NASDAQ: DISH) and its Hopper DVR that allows subscribers to record a program and then replay it without advertising.
That may be a lose-lose situation though, because there are still more than 11 million households in the U.S. that still receive broadcast signals. Going cable-only would force these households either to pay for a subscription to Fox or find some other channel to watch. The other broadcast networks, CBS Corp. (NYSE: CBS), ABC, owned by The Walt Disney Co. (NYSE: DIS), and NBC, owned by Comcast Corp. (NASDAQ: CMCSA) face the same threat and may end up as cable-only channels as well.
News Corp.’s COO told Bloomberg:
We need to be able to be fairly compensated for our content. This is not an ideal path we look to pursue, but we can’t sit idly by and let an entity steal our signal. We will move to a subscription model if that’s our only recourse.
CBS has already threatened to pull its programming from Dish’s satellite system in response to the Hopper ad-skipping device. So far, Dish hasn’t blinked, but if CBS gets serious, Dish may have to back down or its 14 million subscribers will lose NFL football and other popular programming.
Aereo doesn’t face the same threat. The broadcasters will surely appeal the court decisions against them, all the way to the Supreme Court. If they lose there, then the switch to a cable-only network may be their only choice.
One thing remains certain: there are serious changes in the making with some serious money at stake.
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