Stations Could Overpower Aereo With Own Initiatives
All of the interest in Aereo is warranted. Travel back to 2005 and think how cool it would be to watch live TV – from the NFL to “Grey’s Anatomy” – on a tablet-size screen at the beach. The cost? As little as $1 a day or $8 a month.
If the Aereo reality is no longer as breakthrough, consider it has backers and enemies with some pretty big heft. With the encouragement of Barry Diller, who’s been a step ahead many times, IAC has invested heavily in the venture. And, the Big Four broadcasters are engaged in litigation looking to shut it down, believing its live streams of their stations will cost them carriage payments and ad dollars.
Yet, Aereo isn’t waiting for a judge or jury to decide its fate, making the announcement Tuesday that it would expand its platform beyond New York into 22 cities this year.
But even if it clears legal challenges, broadcast stations might be able to simply overpower it with their own mobile-TV services, which could be as easy to use and cheaper. Maybe more importantly, the broadcasters have the promotional might that Aereo probably won't be able to match.
Notable broadcast groups are behind two mobile-TV initiatives gaining some steam, carrying the consumer brands Dyle and MyDTV. The Dyle group includes NBC and Fox, which are part of the anti-Aereo litigation.
Dyle and MyDTV work differently than Aereo, using an over-the-air mobile signal for delivery, rather than an Internet connection. Both efforts have some catching up to do to with Aereo, which is ready for prime time in New York and probably can swiftly expand to the other markets.
Aereo is accessible via an array of devices, while both Dyle and MyDTV are more difficult to use. Both need to find more hardware to carry the embedded capability to easily watch their live station feeds via a free app.
The Dyle service is available in 35 markets, but apparently can only be accessed via a new 8-inch RCA Mobile TV Tablet; by MetroPCS customers with a particular Samsung phone model; or by purchasing an external antenna for about $100. The antenna works with iPads and iOS devices, but not Android-powered devices yet.
Besides NBC and Fox, station groups behind Dyle include Belo, Gannett and Hearst. The Fisher and Hubbard groups are taking a leading role with MyDTV – where Nexstar, Sinclair and Tribune are also involved -- with a trial in Seattle and Minneapolis.
The MyDTV alliance is handing out 750 receivers in each of those markets, allowing for access via iPhones and iPads. Once the receivers are plugged in and the app downloaded, the service is free. It offers a “live record feature” that would appear to resemble Aereo’s DVR-like functionality (Dyle isn't there yet).
Aereo already competes with Dyle in New York and will in many of the markets it plans to move to this year, including Atlanta, Chicago and Washington. Aereo is also planning on launching in Minneapolis, where MyDTV has its experimentation.
Some may say it’s a rogue maneuver, but one advantage Aereo has is that it offers NFL games. The NFL has a mobile distribution deal with Verizon, which prevents Dyle from carrying its games.
Other than that, Aereo might consider ramping up its marketing – which has been minimal – to get a sense how viable a business it has. Otherwise, the potential for Dyle and MyDTV to become more popular is significant.
Start with cost. Both the Dyle and MyDTV apps are free for now. (Dyle has pledged to keep it that way through 2013.) One-time hardware costs do come into play, but could go way down. Aereo has a subscription model.
Aereo consumption is subject to data caps, meaning users might find themselves having to pay more to watch it if their plans are tapped out. Mobile over-the-air TV is delivered through a different mechanism. It can also be used without an Internet connection, so even beyond WiFi range.
Also, stations have an ideal promotional platform that even Barry Diller’s money might be challenged to match: their airwaves. Directing people to the mobile feeds during newscasts and promos is free with wide reach.
There’s one other advantage the broadcast groups have over Aereo: they aren’t running up huge legal bills fighting the major networks.