Big Four Face Conundrum With Aereo Ads

by David Goetzl, Jul 12, 2012, 5:23 PM

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The would-be “Diller Killer," Aereo, has received a green light. Will programmers that want to block it take its green?

The Big Four broadcasters lost their bid Wednesday for a preliminary injunction against the Aereo service, which is backed handsomely by Barry Diller’s IAC. The programmers -- ABC, CBS, Fox, NBC and others -- charge that Aereo, which delivers their stations to mobile devices, is in violation of copyright law.

More to the point: they fear it will cost them carriage fees and lower their ratings, depriving them of ad dollars. Nonetheless, they are pledging to continue their fight to banish Aereo in court, even as the judge denying the injunction suggested that their arguments are considerably challenged.

In the meantime, they might have a chance to sleep with the enemy a bit, though that might prompt questions about how almighty they view the dollar.

Diller was buoyant with the legal win while attending a media summit in Sun Valley today. Aereo, which is up and running in New York, has suggested it may look to expand the $12 monthly service into other markets. Speaking on Bloomberg TV, Diller said, forget the speculation: by sometime next year, the service should be available in every major city.

So far, Aereo has been low-key on the marketing front, trying to create an aura of cool that plays to younger consumers, who may want to use it to cut the cord and drop cable service. It’s available by invitation only. It has a Twitter feed and Facebook presence, though it hasn’t been very successful with either (1,607 Twitter followers, 1,116 Facebook likes.) At the end of May, the company had no revenues, with no more than 3,500 customers still in a non-paying trial period.

Now, however, Diller is indicating some serious promotion is coming. “We're going to go,” he told Bloomberg. “We're going to move. We're going to really start marketing."

IAC has plenty of online properties that could run Aereo banner and other ads. But, what if it wants to run TV spots in New York and then other markets?

Will the very companies fighting Aereo -- whose executives probably grew even more perturbed Thursday when Diller said “I really did think we were on the side of the angels” -- accept Aereo spots?

Some networks reportedly turned away spots from Dish Network recently because it is marketing an AutoHop ad-skipping functionality. The same companies suing Aereo are in court against Dish seeking to block the AutoHop.

That's a lot of legal bills. So, here’s an interesting flow chart: ABC, CBS, Fox and NBC accept ad dollars from Aereo and Dish -- then use the money to keep suing them.

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