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Tackling Tech

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What Aereo’s Loss to Broadcasters Means for NFL Fans and TV Innovation

Posted Jun 25, 2014

In this week’s column Bob explains what Aereo’s loss to broadcasters in the Supreme Court means to football fans across the U.S.

Despite today’s Supreme Court 6-3 ruling in favor of broadcasters and against web streaming upstart Aereo, the decision has set in motion a chain of events expected to change the way consumers – including football fans – watch their teams’ games live.

How’s that? Though it lost to broadcasters whose local market programming it sent over the web to consumers without any compensation for $8 a month, sports fans now have proof positive that a TV service (with a DVR) can be offered for far, far less than typical cable, telco and satellite packages.

Of greater importance to the TV masses than the actual ruling is what Aereo and its dime-sized antennas located in the cloud (not in your home) proved: that innovation is achievable and deliverable by broadcasters when it comes to offering better and more flexible TV. Cable companies may themselves seek an Aereo-like approach to avoid paying broadcasters retransmission fees.

Recap

Launched roughly two years ago, Aereo offered a package of local market channels along with a DVR feature that are streamed over the web to smart TVs (ones connected to the Internet), smartphones, and tablet computers without any wires or equipment required in the home. 

Since content owners such as the NFL use broadcast TV to show their games in local markets, Aereo subscribers were able to watch their favorite team’s games throughout the season, as well as games featured on Sunday Night Football.

However, Aereo’s channel lineup lacked additional football content found on ESPN (including Monday Night Football), The NFL Network, special offerings such as NFL Sunday Ticket and regional sports networks (RSN) found in countless large and small TV markets.

Click here for the link to last week's article.

What Now?

Aereo’s loss does not mean NFL fans can’t stream live game casts to their mobile devices. In fact, the league and its partners already offer low-price apps that let these devices watch wherever, with yet others that offer game rewind (on-demand) and fan-customization (NFL Now) capabilities.

Those NFL fans who were also Aereo subscribers, will likely grab these apps as they are low-priced compared to “cable TV” and because these viewers are already very comfortable with TV that’s delivered over the Internet.

The Big ‘But’

However, those football fans that have enjoyed streaming live games to their connected TV, are now in a bind as the NFL’s apps (and those from its partners) are targeted almost solely at mobile devices, not the big screens in your residence.

Given recent research that claims half of all U.S. TV households have at least one smart TV, coupled with fan’s ravenous appetite for live games and more, you can expect the NFL to embrace streaming to non- mobile devices. It’s just not clear when that will happen.

Case Open

Another in the chain of post-ruling events should have broadcasters embrace Aereo’s service and live streaming in general as a means of evolving from a longtime limited innovation or none status-quo, to a group of corporations that need to explore technology aggressively and at least supplement their business model ( whereby those whose content they carry pay increasingly expensive retransmission fees.)

Because Aereo didn’t pay, it was a serious threat to the very way broadcasters have long done business. The same holds true for groups that own and create content for broadcasters such as the NFL. Free instantly became a four-letter word for them when Aereo launched.

Dream On or Full-Stream Ahead

Live content owners including the NFL and other professional sports leagues that don’t live stream games to TVs in the home have been presented with a gigantic opportunity to expand their brands and those of their advertiser/sponsors thanks to the web.

The league’s don’t want to lose the fees they get from broadcast TV deals, as an Aereo success may have led to, but they want to cash in on what its essentially a new distribution option for their coveted live sports content.

Direct Affect

Remember, that the NFL is in the middle of an exclusive negotiating period with DIRECTV to determine of the satellite TV provider will retain the rights to carry the wildly successful NFL Sunday Ticket package after the 2014 NFL season.

Why is that important? It’s important because if the deal isn’t closed by the end of that period, the NFL could shop the precious property around to one or more other companies. One option the league had would be to sell the streaming rights for live games to most any service provider, including those building large broadband networks such as Google.

The NFL Sunday Ticket is so incredibly valuable that AT&T has stated that if DIRECTV fails to hold on to the pro football package, the loss is legal grounds for the company (AT&T) to ditch its plan-in-progress to buy DIRECTV.

The Bottom Line

Though Aereo lost to the broadcasters, it would be foolish to believe that innovation from these companies is a pipe dream. Aereo showed consumers just how flexible and affordable streaming can be. Football fans should expect advancements and enhancements in the way the league packages, prices and delivers America’s Game.

Stay tuned.

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The opinions, analysis and/or speculation expressed on the Tackling Tech column represent those of individual authors, and unless quoted or clearly labeled as such, do not represent the opinions or policies of the New England Patriots organization, front office staff, coaches and executives. Authors' views are formulated independently from any inside knowledge and/or conversations with Patriots officials, including the coaches and scouts, unless otherwise noted.

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