In just the last few years we’ve seen a plethora of alternatives to cable TV. It was only a few years ago in 2014 when the Supreme Court rules against Aereo for offering a product that allowed people to bypass the cable company to watch local channels anywhere within a market. In retrospect is looks like Aereo’s biggest sin was being too early to market, because today Sling TV is offering a product that feels the same to customers.
Sling TV’s product is AirTV. The company provides several options, all which include a settop box that includes an antenna to receive local over-the-air networks. AirTV then integrates the local channels into the Sling TV OTT offering for a seamless mix of local and on-line channels. The box let’s a user watch the local channels on any device within range of the customer’s WiFi network. The box also will upload your local channels to the cloud to watch anywhere else while you are traveling.
The differences between AirTV and Aereo are subtle. Both companies avoided paying retransmission fees for the local networks. Both companies used antennas to receive off-air channels like ABC, CBS, FOX, NBC and PBS. AirTV places the antenna in the home while Aereo had an individual antenna for each customer at the central office and then beamed the shows to an Aereo box in the home. A non-technical customer would probably be hard pressed to describe the difference between the services, because from the end-user perspective the products offer the same end result.
The Supreme Court’s ruling again Aereo was also subtle. They ruled that Aereo had infringed on network copyrighted material by beaming the signal from an Aereo customer antenna located at a hub and the customer site. Now only four years later these same content owners seem to have no issues with AirTV beaming local content over the Internet to reach a customer who is traveling.
The big obvious difference between 2014 and now is the proliferation of numerous other OTT offerings that are using subsets of the traditional cable offerings to compete with cable companies. Some of the biggest ISPs like Comcast and Verizon even have their own OTT offering to compete against their own cable products.
It seems like the genie is out of the bag now and anything goes in the programming world. We recently saw Charter introduce a package that feels like a la carte programming where customers only get the channels they want. We see millions of customers opting for smaller packages by cutting the cord or migrating to smaller packages.
If you go back and read the big cable company complaints against Aereo you could make many of the same arguments against AirTV – and yet they are not being pushed out of business, as happened to Aereo. The cable companies can’t stop anybody from selling rabbit ears, but one would think they would have a valid complaint against a company that bundles the rabbit ears with other programming without paying retransmission fees.
One reason that AirTV might not be getting push-back is because they are owned by Dish Networks. A lot of the alternative programming today is being offered by the biggest players in the industry, and perhaps Aereo was singled out because they were a brash outsider. Clients ask me all of the time about creating their own small packages and I regret having to tell them that the programmers won’t even talk to small companies about the possibility.
Smaller cable operators don’t have the same options as Comcast, Charter, Dish Networks or AT&T. Small cable providers must still follow FCC rules that require traditional cable TV packages and lineups. Any small cable provider that wants to buck these rules probably ends up on the wrong side of a lawsuit or else is threated by the programmers with losing their programming contracts. Small cable operators, who are already losing money on cable TV are not willing to risk a legal battle with one of the big programmers.
I love seeing companies like AirTV blazing new ground because I hope that what they are doing will eventually filter down to the rest of the market. Sling TV has made it clear that they don’t expect to make money on AirTV and their real goal is to create stickiness for the Sling TV product. I know a lot of small cable operators who would be thrilled to reach breakeven with a cable product, and I’m hopeful that in the next few years they might have the option to resale a bundle like Sling TV and AirTV rather than continuing to lose money with traditional cable.