Wednesday, August 27, 2014

Aereo - The death of a new idea

Since the United States of America turned off the analog TV signal and went digital, I lost my ability to view over-the-air content.  The simple fact is this:  I live in the shadow of a mountain, meaning the new digital TV signal is being blocked by a mountain.  If you look at a signal map, my house is in the mountain's "shadow".  Therefore, if I want to watch TV, I must get cable or satellite TV.  Even for basic cable (local broadcast channels), the fee is between $15 and $20 per month.  I don't like TV enough to pay for that.

Then along comes Aereo.  They open in my market.  Problem solved!  I subscribe for a Netflix price of $8/month and I get my local content streamed to me over the Internet, plus a DVR in the cloud.  Happy days!  Long live Aereo!

Then on June 25, 2014 the Supreme Court of the United States of America issued a ruling that effectively killed Aereo.  Aereo changed tactics and decided to become a cable operator, but on July 17th, they were again snubbed by the US Copyright Office and they weren't given a chance to operate even as a cable TV operator.

Here is what I believe the crux of the whole problem.  People are paying a lot of money for content they don't watch.  If you have cable TV, how many channels do you regularly watch?  I could care less about MTV, VH1, all the various cooking and home shopping channels.  They are fluff.  People realize that they are paying $50 per month ($600 per year) for a lot of stuff that really doesn't matter to them.  They want to get the content they are interested in at a reasonable price.  They are even willing to go without.  I am willing to pay a nominal fee to get some local channels and possibly some sports games, but I don't want more than that.

I think the broadcasters may have won the battle, but over time, the demographic will change on them.  Broadcasters will need to think about how they will appeal to a new generation of people who are willing to go without because the service being offered to them isn't a significant value to the end user.  My advice...  Cut the cord.  The more people who cut the cord, the more clearly the consumer voices will be heard.  Broadcasters are in it to make money.  So you have to reward or punish them with your money.  Sooner or later they will figure it out and follow the money.  Too bad it will now be later than sooner.