Aereo May Have Unlikely Ally

Aereo might call a Wall Street analyst as a witness in its case versus leading broadcasters. Entities linked with the major networks have charged that the service could deprive them of carriage or retransmission consent fees, but Barclays’ Anthony DiClemente disputes that in a report issued this week.

DiClemente isn’t making the case to defend Aereo, but simply to suggest to investors that the service doesn’t pose much of a threat to the value of major media companies.

There have been suggestions that if Aereo, which streams live TV to digital devices with DVR functionality, prevails against media companies that want to shut it down. Cable operators might look to develop similar technology allowing them to skirt the retrans payments. That could, of course, hurt networks. 

But DiClemente writes their parent companies have little to worry about. They tend to “bundle” broadcast stations' in package deals with cable assets and aren’t likely to allow a cable operator to get one without paying for the other. “Distributors could have a hard time disaggregating the two to save” on retrans payments, the analyst says.



Furthermore, DiCiemente writes that if Aereo, which is backed by IAC and fronted by Barry Diller, gains “wide adoption,” networks could launch their own apps, “undercutting Aereo’s business.”

Broadcasters believe Aereo is engaging in violation of copyright rules, which poses a threat to both retrans and ad dollars. It has one two court battles allowing it to continue operating and has announced nationwide expansion plans.

In a trial, it will likely look to defend itself partly by presenting evidence that it will barely --if at all -- curtail broadcasters' revenues. It may turn to expert witnesses to buttress its argument.

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