Little Antennas, Big Questions – How Aereo is Disrupting US Broadcast System

Have you heard about Aereo yet? It’s a US company that manufactures tiny antennas and apps, and it’s ruffling a lot of feathers over at the major US networks even though it’s only been offering its services in New York City for a year now, and in Boston for just a matter of days.

The principle behind Aereo is quite simple. Instead of fiddling around with awkward rabbit ears or installing a giant rooftop antenna, Aereo gives you the option to rent a tiny antenna that’s no bigger than a quarter and will transmit terrestrial signals from the major US networks to your device. The company has built large data centres to arrange and store their antennas so customers don’t have to worry about complex installations and cumbersome hardware. To get cable into your home, Aereo provides you with a high-speed connection that enables you to watch the signals their antennas pick up live on your tablet, smartphone or TV screen (iOS only, for now, through a streaming device like AppleTV or Roku). Aereo also lets you store on-demand content like any conventional recorder and watch programs from the last seven days in case you missed out on anything interesting. Using an interface that looks like your average programming guide, you’re able to watch live or recorded TV from the smart screen of your choice. So how much does this amazing service cost? Subscriptions run US$8 to $13 a month.

Because Aereo is an “antenna” it can only pick up local signals that are close to the address you provide when registering with/renting from the service. By geolocating your home with an IP address or GPS, Aereo knows exactly where you are and what channels and/or programs you’re allowed to watch through its service. Whether you live in New York City where Aereo has been operating for a year, or in Boston where the service has been on offer for just a few days, you won’t be able to pick up a single signal if you physically move away from the terrestrial broadcasting area as established when you first set up your account.

A breach in US regulations

Sounds simple enough, right? Not really. Because ever since Aereo launched its service, traditional terrestrial signal broadcasting and distribution networks have been on a legal warpath. And unfortunately for them, they’ve lost the first few battles in the war. In fact, the United States Court of Appeals for the Second Circuit ruled in favour of Aereo over nearly two dozen plaintiffs, including media giants CBS, NBC, ABC and Fox, who argued that the small company was stealing the intellectual property of broadcasters. The Court’s judgement reads as follows:

“It is beyond dispute that the transmission of a broadcast TV program received by an individual’s rooftop antenna to the TV in his living room is private, because only that individual can receive the transmission from that antenna, ensuring that the potential audience of that transmission is only one person. Plaintiffs have presented no reason why the result should be any different when that rooftop antenna is rented from Aereo and its signals transmitted over the internet.”

Reactions to these legal rebuttals – which have identified one of the very few loopholes in US Federal Communications Commission regulations – were deeply divided. A few broadcasters, including Fox and CBS, said they were tempted to do away with terrestrial broadcasting altogether and to only broadcast their content by cable. Problem is, that would jeopardize their own licence terms. Other key players have expressed great fear regarding the royalties that affiliates pay to parent companies for the rights to locally rebroadcast TV signals. And cable distribution companies like Time Warner Cable are looking into copying the Aereo business model if it is officially declared legal.

The first Aereo users in Boston, where the service became available on May 30, 2013, are all extremely happy with the product even though image resolution isn’t the greatest and, of course, pay-tv channel content is not offered. Aereo is already planning on making its services available in over 20 other US markets, and that’s just for starters.

But companies like Aereo are not the only ones focusing on terrestrial broadcasting in the major structural and technological debates on the future of distribution models. Terrestrial airwaves are being coveted by cell phone providers in Canada, the US and Europe as well to help meet excessive demand for certain shows during live broadcasts such as major sporting events. For example, come Super Bowl time, NBC and Verizon will once again offer a mobile app that will let subscribers watch the game live. These providers will have to make a significant shift towards terrestrial broadcasting to supplement their distribution needs in order to meet the very high demand of their customers. Terrestrial broadcasting plays a major role in the development of wireless broadband internet structures in Canada, as in other parts of the world, when developing a wired network is just too expensive. And now multinational corporations like Google, which is still rolling out its Fiber network, are also showing interest in terrestrial airwaves.

Terrestrial broadcasting in Europe

The issues surrounding terrestrial signals and their use as part of a broader technology package have been on the European Commission agenda for several years now, and their “Preparing for a Fully Converged Audiovisual World: Growth, Creation and Values” green paper published on April 24, 2013 focuses on some of these issues.

“Convergence raises the issue of the future role of terrestrial broadcasting in the provision of such services. Industry actors are increasingly exploring hybrid models combining the advantages of broadband in delivering individual choice of on-demand content with the efficiency of broadcasting in making content (e.g. live sports or entertainment events) simultaneously available to a large audience.”

As a matter of fact, the “broadcast and broadband,” or HbbTV, hybrid services implemented and marketed in Europe are booming. These services combine the use of antennas and the internet in a single device that gives them access to the terrestrial airwaves of public broadcasters, a few digital channels and, in the near future, internet channels as well.

“HbbTV is an ETSI standard applied by a number of broadcasters, content providers, networks and consumer device manufacturers in Europe to link broadcast and broadband content. One functionality of HbbTV is to trigger broadband content through the broadcast signal.”

And while all these new developments are unfolding, other projects are in the works in the UK. One of these projects, YouView, is setting itself apart from the competition through its partnerships, the services it offers, its business model and its interface. Launched in July 2012, YouView is the next logical step (and what many are calling an upgrade) to the Freeview service and the BBC’s iPlayer. A huge success for the last 10 years, Freeview allows users to watch, save, store and archive programs from public and private broadcasters without having to subscribe to a wired or satellite service provider since boxes, recorders or TVs with integrated services are connected to a conventional antenna. On the other hand, this service offers lower picture quality than cable and satellite, and is not suitable for interactive activities.

Originally called “Project Canvas,” YouView – which offers two types of connection (antenna and internet) – was finally rolled out after six years of development and many complicated negotiations involving the BBC, Channel 4, ITV and Arqiva (all partners in the project) and internet providers BT and TalkTalk. After being online for a year, YouView now has close to 500,000 subscribers. The service currently offers programming and control interfaces for iOS smart devices, and it will soon do the same for Android smart screens as well. But even though all of this sounds great, certain British media observers remain skeptical.

Whether you consider it a public resource, digital dividend or channel of interactivity like synchronized applications, terrestrial broadcasting will definitely undergo major changes in the short and medium term. Guess we’ll just have to stay tuned to find out exactly what they are.

Suzanne Lortie
Suzanne Lortie holds a diploma in production from the National Theatre School of Canada as well as a MBA from HEC Montreal. She became a professor at Université du Québec à Montreal in July 2012. She has also worked as a production manager and line producer for television since 1992 (major variety and cultural series that won several Gémeaux and ADISQ awards, documentaries) and is a consultant in new media strategies.
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