If the television viewer of the future is anything like me, then broadcasters are making a mistake in thinking streaming service Aereo is the enemy.
Aereo’s business of capturing over-the-air signals of major networks and then redirecting their shows for streaming over the Internet is being challenged by the broadcast industry for copyright infringement, and the US Supreme Court heard oral arguments in the case Tuesday. The company has its engineering offices in Boston.
I’ve been writing a lot about Aereo over the past year. But some of the best insights I’ve gotten into the service have come from using it — and from reflecting on my own habits as a TV viewer.
I don’t own a television set, but I’m a heavy user of Netflix and Hulu on my laptop. If shows aren’t available on those sites, they basically don’t exist to me (“Breaking Bad” and “Mad Men” are exceptions — I’ve paid to download them from iTunes).
I’m not alone: A fifth of households with a Netflix or Hulu account don’t subscribe to cable or satellite TV, according to Experian Marketing Services. And the total number of cord-cutters — viewers who do not subscribe to any satellite or cable service — has grown 44 percent over the past four years, to 7.6 million households.
Still, I subscribed to Aereo recently at $8 a month so I could watch a few broadcast shows live. Last week, for instance, I was enthused enough about the upcoming episode of “Marvel’s Agents of S.H.I.E.L.D.” on ABC to watch it live on Aereo — thus subjecting myself to the commercials that come with watching TV shows.
And that brings me to my point: I saw a number of ads I never would have without Aereo. Put another way, if Aereo didn’t exist, ABC and its advertisers would not have been able to reach me (and Nielsen ratings do count Aereo’s users for advertising purposes).
So, among people like me at least, Aereo is in fact bringing viewers back to the broadcast networks. Do the advertisers that support the broadcasters really want to miss out on the generation of young people that make up Aereo’s core subscriber base?
And the broadcasters could use the help. The industry saw minimal growth in advertising revenue last year, from $39.6 billion to $40.1 billion. Meanwhile, the Internet for the first time surpassed broadcast TV as the largest advertising market, surging to $42.8 billion in 2013 from $36.6 billion the year before, according to a new report from the Interactive Advertising Bureau.
That’s an incredible jump. And it shows once again where Americans’ eyeballs are going to consume content.
On the matter of Aereo, the broadcasters would argue that any benefit they get from the service will be annulled if their predicted doomsday scenarios come true — such as cable companies setting up their own Aereo-like technology and rescinding billions of dollars in retransmission fees they pay each years to the broadcasters: some $4 billion in 2014, according to SNL Kagan, which follows the media industry.
But I’m not so sure that should be their biggest concern, as those fees are still small compared with the advertising revenue broadcasters receive.
The bigger worry for broadcasters ought to be whether TV viewing habits such as mine become the norm over the next decade. That’s a trend that threatens their much larger business. And it would appear one of the few things with the potential to counter that trend — at least that’s emerged so far — is Aereo.