What the broadcasters don’t get about Aereo

Screen shot from Aereo.com retransmission of Marvel's Agents of S.H.I.E.L.D. on ABC
Screen shot from Aereo.com retransmission of Marvel's Agents of S.H.I.E.L.D. on ABC

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Aereo TV Lawsuits

If the television viewer of the future is anything like me, then broadcasters are making a mistake in thinking streaming service Aereo is the enemy.

Aereo, which streams broadcast channels over the Internet in 11 cities including Boston, will make its case to the US Supreme Court today for why its service is legally sound (in short, because it uses antennas). The broadcasters — including ABC, Fox, CBS, and NBC — will tell the court why they think that’s nonsense.

I’ve been writing a lot about Aereo, whose service was engineered in Boston, over the past year. But some of the best insights I’ve gotten into the service have come from actually using it — and from reflecting on my own habits as a TV viewer.

I don’t own a television set, but I’m a heavy user of Netflix and Hulu. If shows aren’t available on those sites, they basically don’t exist to me (“Breaking Bad” and “Mad Men” are exceptions — I’ve paid to download those shows from iTunes).

I’m clearly not alone: A fifth of households with a Netflix or Hulu account don’t subscribe to cable or satellite TV. And the total number of “cord-cutters” has grown 44 percent over the past four years, to 7.6 million households.

Still, I opted to subscribe to Aereo a few months ago (for $8 a month) so I could watch a few broadcast shows live. Last week, for instance, I was enthused enough about the upcoming episode of “Marvel’s Agents of S.H.I.E.L.D.” on ABC to watch it live on Aereo — thus subjecting myself to the commercials that come with watching live broadcast TV.

And that brings me to my point: I saw a number of ads that I wouldn’t have seen without Aereo. Putting it another way, if Aereo didn’t exist, ABC and its advertisers just would not have had me as a viewer of their live broadcast (and Nielsen ratings do count Aereo’s users for advertising purposes).

So, among people like me at least, Aereo is in fact bringing viewers back to the broadcast networks.

Broadcasters could use the help. The industry saw minimal growth in its advertising revenue last year, from $39.6 billion to $40.1 billion. Meanwhile, the Internet for the first time surpassed broadcast TV as the largest advertising market, surging to $42.8 billion last year from $36.6 billion the year before, according to the Interactive Advertising Bureau.

Just to emphasize: That’s an incredible jump. And it shows once again where Americans’ eyeballs are going to consume content.

On the matter of Aereo, the broadcasters would argue that any benefit they get from the service will be annulled if the doomsday scenarios come true — such as cable companies setting up their own Aereo-like technology and rescinding billions in annual retransmission fees from the broadcasters.

But I’m not so sure that should be their biggest concern. The reason being, those fees are still small compared to the advertising revenue broadcasters receive.

The bigger worry for broadcasters ought to be whether TV viewing habits such as mine become the norm over the next decade. That’s a trend that threatens their much larger business. And it would appear one of the few things with the potential to counter that trend — at least that’s emerged so far — is Aereo.

A version of this article appears on page B7 of the Boston Globe on April 23, 2014, with the headline: Far from enemy, Aereo gives broadcasters more eyes on ads.

Kyle Alspach has worked in journalism in Massachusetts since 2005 and was one of the original staff writers at BetaBoston.
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