Internet TV 'will cut customers bills in half' in New York City
A new Internet TV service to be launched next month in New York has the cable companies - providers of much of the television in the US - quaking in their shoes.
New York: half-priceTV on the way
A new company called Aereo will provide what Adweek calls " the holy grail in the streaming wars." - first-run broadcast content.
The New York Times called it potentially " a new cord-cutting threat for cable and satellite distributors." At a Manhattan news conference yesterday Aereo demonstrated its service, which will go on sale on March 14. It will cost $12 a month and will only work in New York City for the moment.
Aereo will stream all the programming of the major networks (ABC, CBS, Fox, NBC) and will include an Internet-powered digital video recorder.
The Web-based service will be available on platforms like Roku and Apple TV. Among its backers is IAC's Barry Diller, founder of Fox 30 years ago. Diller helped raise $20.5 million in funding, and has joined Aereo's board.
Time Warner Cable's cheapest package in New York is $42 a month - about twice what a subscription to Netflix streaming and Aereo would cost combined.
Chet Kanojia, the founder and chief executive of Aereo said , “if you have this and you have Netflix, you absolutely have the ability to not have a standard cable subscription.”
The New York Times explained how it works: Aereo has set up thousands of tiny antennas - each the size of a thumb - at an undisclosed location in the city . Each subscriber has an individual antenna, which captures TV's digital signals and sends them to him. As long as it keeps the customer-to-antenna ratio at 1:1, the company can argue it is simply an antenna rental service, say some lawyers.
Adweek predicts an inevitable legal scrap over whether or not renting antennas is different from pirating a signal.
Barry Dill said in a statement, “Aereo is the first potentially transformative technology that has the chance to give people access to broadcast television delivered over the Internet to any device, large or small, that they desire.
"No wires, no new boxes or remotes, portable everywhere there’s an Internet connection in the world. Aereo is the first potentially transformative technology that has the chance to give people thousands of tiny TV antennas so that each subscriber has an individual antenna.
"No wires, no new boxes or remotes, portable everywhere there’s an Internet connection in the world."
If Aereo succeeds and withstands the inevitable legal challenges, says Adweek, t will change the business profoundly, and it won't be good for cable operators.