Aereo Case Prompts Debate on Consumer-Driven Entertainment Consumption

Apr 30, 2014

Article ImageLong Island-based technology company Aereo provides a service that many entertainment consumers want: the ability to stream their favorite TV shows live or record them to view later.  The company accomplishes this by leasing its customers a remote antenna that can pick up 28 different channels, including the major broadcast ones, and offering DVR recording space using their cloud service. Its customers can use the service on Windows, Mac, and Linux computers, as well as via iOS devices or a Roku box. Aereo currently serves eleven main cities across the United States, and plans to cover 19 more in the near future.

The success of Aereo has spawned a new wave of discussion on how the general public wants to experience its entertainment choices. For many consumers, being able to choose when and how they can watch TV shows dictates where they spend their money. For example, they'd prefer to invest in a service like Aereo instead of paying for cable.

Ben Dobyns, CEO of Zombie Orpheus Entertainment, understands this rising interest in consumer-controlled entertainment because he's worked directly with the public on fund-raising campaigns and distribution. "In large part, I've done that because the traditional film and television distribution mechanisms don't know how to deal with innovations like Aereo," he says.

This consumer-controlled market is part of the reason why some U.S. television networks have sued Aereo and have taken the case to the U.S. Supreme Court. The networks claim that the company's business model steals content, and allows it to be displayed as "public performance." If the networks are right, this means Aereo would be required to obtain retransmission consent from them.

However, Aereo's defense is that they aren't stealing anything, just allowing consumers to view already publicly-aired content according to their own distribution preferences. As a cloud DVR service provider, Aereo argues they aren't breaking any rules because both DVR services and antennae use by consumers have already been approved by the courts as legal form of entertainment consumption.

Dobyns says, "My general attitude is I can spend a lot of time and money trying to fight what the internet does best, which is finding amazing new ways to make perfect copies of my work available for free to other people, or I can figure out how to turn that into an asset."

 "If these [cable] companies were more focused on embracing and working with these new models, rather than trying to create artificial scarcity and lock their products down, Aereo would be much less of a threat to them."

The idea that consumers want more control over their entertainment experiences is only enhanced by a recent deal made between Time Warner Cable and Fan TV. Fan TV, whose motto is "Touch the Future," has created a set-top device that "that combines live TV, video-on-demand and streaming services in a unified discovery experience." Just this last month, the company penned an agreement with Time Warner Cable that would allow the cable company's eligible channels to be streamed live through Fan's device. Essentially, the agreement between Fan and Time, though it takes what some would see as a more "legal" approach, supports the same idea Aereo's promoting, that entertainment consumers want to be able to determine how they consume their content.

This doesn't even touch on the huge success of Netflix-which just announced a deal with three small cable companies to deliver Netflix content through set-top TiVo DVR boxes--Hulu, and Amazon Prime Instant Video over the past few years, streaming services which are further proof that consumers are willing to invest in products and services that give them the content they want in the way they want it.

"What the future [of consumer-controlled entertainment] looks like depends on who gets there first," Dobyns says. "We kind of have a Wild West situation right now, where everybody's trying to come up with the solution that's going to be adopted and that will make sense to the most people."

"The future I would like to see is one where fans are much more empowered to directly fund the content that they love," he says, "because that's a future that establishes a much stronger relationship directly between fans and media producers."

(Image courtesy of Shutterstock.)