A top executive with the Fox broadcast network is threatening to convert the network to a pay-TV channel if Internet startup Aereo continues to "steal" Fox's over-the-air signal and sell it to consumers without paying for rights.
“Fox and its affiliate stations would stop broadcasting and serve only pay-TV customers to protect the billions of dollars spent annually on programs, along with advertising revenue and hard-won fees from pay-TV systems,” Bloomberg notes, citing recent comments made by News Corp. Chief Operating Officer Chase Carey.
Carey’s comments come after a U.S. appeals court last week threw out broadcasters’ attempts to shut down Barry Diller’s Aereo.
For those unfamiliar with Diller, he’s actually responsible for the creation of Fox. He now backs Aereo, which takes broadcast signals for free from the air and sends them to subscribers' computers, tablets and smartphones:
“Carey is threatening to upend traditional broadcast TV to counter the peril posed by Aereo,” Bloomberg reports. “If CBS, NBC and ABC follow, it would and mark an end to television as it’s been known since ‘The Honeymooners’ aired in the 1950s. Fox and other networks are evaluating what to do next after the appeals court ruling.”
Although all broadcasters send out free-to-air signals, they usually require payment when those signals are retransmitted by a cable or satellite company.
“We need to be able to be fairly compensated for our content,” Carey told TV executives today in Las Vegas. “This is not an ideal path we look to pursue, but we can’t sit idly by and let an entity steal our signal. We will move to a subscription model if that’s our only recourse.”
Bloomberg explains the recent Aero lawsuit:
The broadcast networks sued Aereo in March 2012, claiming it infringed copyrights by capturing their over-the-air signals with tiny antennas and delivering shows to subscribers on computers and smartphones.
With the appeals court ruling, Aereo can go ahead with a planned national expansion of its service from its base in New York, Diller said in an e-mail last week.
“It’s a shot across the bow to the courts, and maybe to Congress, that broadcasters take this Aereo threat very seriously,” said Paul Gallant, Washington-based managing director at Guggenheim Securities, said in a recent interview. “Eighty-five to 90 percent of homes are pay-TV homes, so the threat is more credible now than it was 10 years ago.”
Fox owns 27 TV stations that thrive on such signals. Carey didn't explain how they might be affected.
“We will continue to aggressively pursue our rights in the courts, as well as pursue all relevant political avenues, and we believe we will prevail,” Carey said in a statement.
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The AP contributed to this report. Featured image digitaltrends.com