
News Corp. Threatens to Pull Fox Off the Airwaves If Aereo Wins - Lightning
http://allthingsd.com/20130408/news-corp-threatens-to-pull-fox-off-the-airwaves-if-aereo-wins/
======
revelation
Let's piece this together.

1) News Co transmits their content unencrypted over the air with kW+ senders

2) News Co finds that doing so enables people to watch that content

3) News Co does not want people to do that

4) News Co threatens to stop broadcasting their content on the publics
valuable frequency spectrum

So why exactly have they not followed through? It seems like a proper
conclusion and solution to their perceived problem.

~~~
w1ntermute
The whole problem here for the broadcast networks is that Aereo sets a
precedent for the cable companies to also avoid paying the retransmission fees
by setting up a million tiny antennas instead of one big one. Nowadays, the
broadcast networks get 70% of their revenue from retransmission fees, and only
30% from other sources, such as advertisements.

Aereo and its users themselves don't matter - they're totally insignificant.
But the court ruling does matter, because if the cable companies stop paying
the retransmission fees, the broadcast networks are _fucked_.

~~~
jonnathanson
Mostly correct, but what's at stake here isn't the cable fees so much as the
local/affiliate fees. Those are still a decent business for companies like
NewsCorp (and others), but let's face it: local affiliate television is dying
on the vine, one way or the other. It faces a fundamental challenge much more
significant than the one posed by Aereo.

The entire premise behind affiliate television is that local station owners
can license the rights to national programming, and then exercise a quasi-
monopoly over distribution of that content to local markets. (If I'm the FOX
affiliate in NYC, for instance, I pay FOX for the rights to its shows, and I
have exclusive rights to air those shows in NYC).

This business model was threatened the minute the internet took hold, really,
because the very idea of local exclusivity is anachronistic now. It's one of
the two horse-and-buggy concepts of the 21st century content distribution
business (the other being time-bound content viewership). It is threatened
much more extensively by Netflix, by YouTube, by Hulu, by Microsoft, by
iTunes, etc., than by any one startup. It is threatened by virtue of its
irrelevancy in the modern, globally connected era.

The idea of moving television networks to paid subscription models has been
bandied about for at least a decade now. IIRC, it was NBC who first proposed
this idea in the early 2000s. Indeed, this may come to pass at some point: not
because of the likes of Aereo, but because broadcast television starts to make
less and less business sense as time goes on (whereas content ownership and
distributorship is still viable). Eventually, we'll probably have nothing
_but_ content shops, who distribute their wares across all channels -- perhaps
offering different tiers of the products at different prices in different
channels, and/or extracting licensing fees to different distributors.

As a consumer, expect a generally upward trend in content pricing in the long
run (i.e., free to paid). It'll just depend on _whom_ you're paying.
Advertising-subsizided, free content will still exist to the extent that
distribution channels like YouTube continue to thrive.

~~~
keithwinstein
This is an interesting-sounding analysis, but unfortunately your statement
about the "premise" of affiliation is 100% backwards.

In major markets, historically it has been the networks who pay the stations
an affiliation fee, not vice versa. The stations have something valuable (a
broadcast license) and the networks want access to it so they can air their
national ads.

Yes, of course the station also gets something valuable out of the
affiliation. On balance, however, the money has tended to flow from network to
station, not vice versa. For example, here in Boston, NBC pays Channel 7 an
affiliation fee of $15 million a year (or did in 2000 and years afterward; I
haven't kept up with it more recently).

See [http://ocw.mit.edu/courses/electrical-engineering-and-
comput...](http://ocw.mit.edu/courses/electrical-engineering-and-computer-
science/6-805-ethics-and-the-law-on-the-electronic-frontier-
fall-2005/projects/newselectionbias.pdf), section 2.2 (page 4).

------
rayiner
I thought the Aereo decision was contrived, but I have to say: if you want to
control distribution of your content, don't broadcast it unencrypted across
the whole country.

~~~
cheald
I think it's a pretty clear solution to the problem, honestly. Broadcasting is
very clearly defined, and Aereo is very clearly unicasting.

If Aereo was using a single antenna and capturing the source to send to
multiple clients, they'd be broadcasting:

    
    
        *===\
        *===A===S
        *===/
    

But instead, they're providing a 1:1 receive-and-transmit, basically turning
them into a DVR with a really long cable:

    
    
        *===A===\
        *===A====S
        *===A===/
    

I think it was really the right ruling. The stations are upset that Aereo is
capitalizing on their content, but what Aereo is selling is a DVR, not their
content. They aren't broadcasting by any means.

~~~
fnordfnordfnord
It's a silly and wasteful answer to a silly problem.

------
eykanal
Can't blame News Corp, really... moving to cable would be a sound business
move. They have their bottom line to protect, and if their revenue source is
threatened, they _should_ investigate moving to a different revenue model.

~~~
jrockway
Their revenue source is ads. They are not going to give up their ad revenue to
get a tiny, tiny bit of retransmission revenue. This is all a bluff and the
only correct response is to roll your eyes so sarcastically that they hurt a
little bit afterwards.

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marssaxman
Let's hope Aereo wins, then.

------
trotsky
Can someone who has been following this story break down the practicalities of
the current judicial environment for services like this? Not black and white
answers, just the general consensus.

I know some others like boxee [1] are trialing services like this in some
markets.

From a bootstrap/startup/DIY perspective what seems to be the current known
framework?

1) content needs to be over the air 2) customer needs to be inside the
content's broadcast area 3) needs to be a 1:1 correlation of receiver/antenna
to viewer

those are my baseline understandings, are there any I missed

I wonder if anyone has any knowledge or informed opinions about:

What is the broadcast area? Is that a regulatory definition, or is it
determined by if you can easily recieve the signal, or could it be anyone who
could receive the signal even if using sensitive equipment and directional
antennas

What would be acceptable in terms of customer is in the broadcast area? Credit
card billing address? Physical mail sent? IP geolocation? mobile gps result?

Obviously you can compress the signal, but what about tampering with it? Would
adding a scroll or bumpers to the stream change the legality?

Is this all based on live transmission only? Would store and forward (ie cloud
dvr) change the picture?

Is there anything about charging that changes things? It could be free, no?
What about subscribe vs. pay per use?

I realize this is a highly fluid situation, I'm just curious if anyone has any
thoughts or insights thats been paying attention.

[1] <http://www.boxee.tv/dvr> cloud dvr, stream live tv to multidevice -
launched in some markets.

~~~
robterrell
I worked with a startup that wanted to do something similar to Aereo (they had
an even better clever hack on the law, in my opinion) but they stopped after
calculating the cost of the inevitable lawsuits and appeals.

> What is the broadcast area?

It's called a Designated Market Area or Television Market Area
(<http://en.wikipedia.org/wiki/Media_market>). I've only hear TV people use
the former term.

> What would be acceptable in terms of customer is in the broadcast area?

I've heard it suggested that a current GPS location is the only thing that
would stand up in court. But that idea has not been tested, as far as I know.

~~~
trotsky
Thanks a lot for taking the time to explain, I really appreciate it.

------
venomsnake
So ... we create a TV that shouts every day "we need no government, government
is stupid, freedom, laises faire, WAAAAAAGH" ... and then we run to the
government like the little crybabies that we are, when somebody does the
things we preach ...

------
mdip
I can't wait until this launches in my area. The reasons I want it are
basically the original reasons Cable TV came to be and precisely what they
advertise. I hope that my use case isn't unusual because I _actually_ need the
very long cable attached to rabbit ears somewhere other than where my vacation
home is located.

I have a vacation home on the US side of Lake Huron. I can receive two
stations OTA... Canadian (CBC and CityTV? I think). To receive those, I
installed a couple of bow tie antennas on a poll ten feet above the roof of
the second floor. It was a pain to install, performed poorly and looked tacky.
A storm solved that for us. I'm not climbing on that ladder again.
DirecTV/Dish aren't an option due to the tree line. Comcast offers service for
about $50 a month that includes 20 fuzzy analog channels. The signal was
unwatchable despite the installers insistence that it was "fine" which ended
up being downgraded to "the best we can do". No competition means no
expectation of quality service (I'm not knocking it, just stating the
circumstances).

Surprisingly, DSL seems to be the only thing we can get up there that performs
at speeds I was used to at home say, 6 years ago, which are fine for 3 "HD"
streams from the usual internet streaming providers.

I have no problem with just using Netflix (and Hulu/Plex/etc). My parents,
however, love sports/local news/the comfort of what they consider "normal TV
viewing" at night. We tried SlingBox App + iPad + AppleTV but it disconnected
too frequently due to upload speeds being lacking in the home the box was
installed. This would eliminate that issue, and would provide the stations the
rest of my family wants to watch on the weekends.

------
thatthatis
More people are watching NYC area stations -> charge more for advertising on
those stations => why is this a problem?

Likewise the issue of "we won't get rebroadcast fees in this area" seems
spurious. If people cut the cord, they won't get the rebroadcast fees either.

This seems to me to be more "change is scary" than "they're stealing our stuff
and not paying us"

------
nhebb
Reading the comments here, I think there is some confusion over which
channel(s) this is referring to. News Corp owns Fox Entertainment Group, which
in turn has a number of divisions. The Fox Broadcasting Company is just one of
many TV divisions. The "Broadcasting" in the name refers the Fox channel
broadcast over the airwaves. The cable channels like Fox News, Fx, National
Geographic Channel, fox Sports, and so forth, are in separate divisions.

Its shows include Family Guy, Hell's Kitchen, Glee, NFL on Fox, etc. Of all
the shows appearing on the broadcast channel, I suspect that NFL on Fox could
be an issue. When the NFL sold them the broadcasting rights, I assume that
broadcasting the games over public airwaves was a factor.

------
ichtet31
Please do, you will not be missed.

------
forgotAgain
Aero must be really shaking up the cable companies for this degree of
response. Its the cable companies pulling Fox's tail that's causing the
outcry.

I'm currently in the sweet spot for Aero. I live in the Suburbs of NYC and I
have to have cable because the over the air signal is weak in my area. That
combined with the fact that cable companies own pretty much all of the
suburban news channels means that without cable I don't have access to local
news. There are millions of others in the same boat.

I heard about Aero about a month ago. I'll be dropping my cable television
package over the summer.

------
mtgx
Sounds like win-win to me.

------
ctdonath
No talk of what audience they _would_ pick up? I can't get the local broadcast
stations, and would appreciate some service making them available via
streaming data. I'm _not_ signing up for "cable TV" at its price just to get
what normally would be free save for quirks of geography.

Contrast the "I Heart Radio" <http://www.iheart.com> app service, making
broadcast radio available everywhere free - rescuing many stations from
oblivion. Whither "I Heart TV"?

------
kyllo
I won't miss it. Last time my wife and I moved, we simply declined to transfer
our cable subscription to our new address. TV over the internet is an idea
whose time has come, there's no stopping it now. The big TV companies will
have to choose whether to adapt or die. They will fight it tooth-and-nail
because it costs them money, but they will adapt.

------
ChuckMcM
I wonder if News Corp realizes just how many people support Aereo now given
this threat.

------
taylodl
I'll sure miss Fox when they pull off the airwaves said no one ever.

------
DanielBMarkham
It continues to amaze me how that once you do something one way for a few
years (or a few decades) how established businesses are willing to fight tooth
and nail to keep doing it that way _even if it stops making any sense to the
consumer to do so_.

We have this same fight with RIAA, and with IP in general. Once a business
model gets established, it's the dickens trying to change course.

This is what concerns me most about the internet: when we were putting this
all together, it was just a bunch of hacks out there pressing buttons, seeing
which ones would work. Web pages are a kind of location, like a street
address? Okay, let's run with that. Search is a way to monitor user intent?
Okay, that works. Facebook should be the new version of the yellowpages? Yeah,
that's the ticket.

Watching all of this happen, I've been amused, concerned, and finally blasé. I
mean if Facebook doesn't work as a universal phonebook, or if it starts
thinking it owns the net, who cares? Surely somebody else will come along
eventually. But it concerns me that the patterns we've set up over the last
ten years or so are going to be just as hard, if not harder to overcome than
these decades-established ones.

Everybody loves riding the rocketship up, and milking the cash cow. It's a
completely different picture when technology starts making your model
obsolete.

He has to know how weak his cards are. My money says they're bluffing. This is
a cry for support, not a real option.

------
lifeisstillgood
Murdoch has a fundamental problem :

The value of a newspaper / journalism outlet is its wide distribution. He
famously said to a (probably many) politicians "you can have headlines
praising you, or you can have a bucket of shit in your doorstep each morning"

The more paywalls he erects (wsj, the times, and now fox) the smaller his
distribution and the less value.

It's not the end of the world now, but there is a value in say the Democratic
Party funding it's own free newspaper

~~~
leethax0r
What does that quote even /mean/?

~~~
defen
_Cracks knuckles_ "It really would be a shame if that nice reputation of yours
were to be damaged in any way..."

------
cycomachead
Pulling Fox News off the air seems to be yet another argument for Aereo.

------
malkia
Please don't forget to cabelize Faux News too.

------
sultezdukes
Taking out of context, but I found _"Having a television antenna is every
American’s right.”_ to be pretty funny.

~~~
dmckeon
From a UK context, it may be less funny:

 _In the United Kingdom and the Crown Dependencies, any household watching or
recording live television transmissions as they are being broadcast
(terrestrial, satellite, cable, or internet) is required to hold a television
licence. Since 1 April 2010 the annual licence fee has been £145.50 for colour
and £49.00 for black and white._

[https://en.wikipedia.org/wiki/Television_licensing_in_the_Un...](https://en.wikipedia.org/wiki/Television_licensing_in_the_United_Kingdom)

~~~
dkulchenko
As someone living in the U.S., I'd happily pay the ~$18.50/month to have
unlimited access to the programming (plus web streaming) that U.K. citizens
do.

~~~
lifeisstillgood
It is rather nice.

You guys ought to try it.

~~~
twoodfin
I'd put Netflix ($8/month) + Amazon Prime Video ($6.50/month and Prime
shipping included!) up against the BBC's streaming library any time.

~~~
tomrod
Dr. Who--does Amazon Prime update more frequently than Netflix?

------
baggachipz
ButtHurt [buht-hert]. _Noun_. An inappropriately strong negative emotional
response from a perceived personal insult. Characterized by strong feelings of
shame. Frequently associated with a cessation of communication and overt
hostility towards the "aggressor."

