Why Media Is Threatening Self Destruction … to End An App

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If you haven’t heard of Aereo, it’s because the media doesn’t want you to know about it.

No conspiracy theories here — the world’s biggest media conglomerates, including Disney, News Corp., Comcast and CBS, all want Aereo dead. And, shockingly, they’re willing to put their own relevance on the line to shut Aereo down.

Aereo, a service that launched in mid-2012, is essentially an app for phones and tablets that allows users to watch local over-the-air channels in select cities. It’s the app equivalent of an antenna, including only channels you get for free, and over the air — no cable or satellite signals included.

But four of the world’s most powerful media conglomerates have filed a joint lawsuit against Aereo. Also, joining in the fun are Univision and taxpayer-subsidized PBS.

On paper, the battle is arguably the most lopsided legal disputes ever — a startup app versus a half-dozen media empires. It’s David versus a small army of Goliaths.

Aereo is present in just 11 markets — four of them in Texas — but the heft of the case has already landed it with the U.S. Supreme Court, which will hear the case later this year.

That’s when Aereo, like David, will prevail — and must prevail.

So, what’s the problem anyway?

The media giants put forth the idea that Aereo, in making local broadcasts available via the Internet, is “stealing” their free signal and infringing on their copyrighted material.

While free over the air, these few media companies sell “redistribution rights” to existing cable and satellite companies at mutually agreed-upon per-subscriber rates, so they say Aereo should have to pay up too — something the startup clearly could not afford to do.

But Aereo says if companies pump their advertisement-funded channels to the public for free — the public should be able to watch those free channels wherever they are.

The battle is over revenue streams: television companies want to be able to charge both advertisers and anyone who distributes their free signal — precisely because television companies know their demise is inevitable.

That’s why CBS CEO Les Moonves is threatening (though I believe he’s bluffing to gain support from lawmakers) to turn CBS into an Internet-only channel. Because TV is doomed, unless they can take out the Internet first.

With most young people turning almost exclusively to the Internet for entertainment, this poses a big threat — although largely hypothetical right now. It is inevitable that the Internet will take over television as a medium.

Last year, millions of people watched movies and TV shows online through “legal” sources like iTunes and Hulu. Millions more streamed movies and TV shows from free websites like Primewire, TubePlus and Popcorn Time. Websites like ATDHE and FirstRowSports broadcast “pirated” television streams of live sporting events from thousands of beard- and eyepatch-less everyday people who, incidentally, share it all for free because they believe access to society’s culture should be free.

Millions — even billions — already know the Internet has won. The cat is out of the bag. You can’t pretend any corporation of government can stop it (unless, of course, they shut down the entire Internet).

Aereo wants to know why sharing free stuff online is wrong. It’s not like they’re cutting out all the commercials. They’re sharing what companies already share for free, to new audiences who could potentially buy the same products advertised on those channels.

Not so fast.

“Piracy,” charges ABC Television president Anne Sweeney when asked about Aereo. “I think Aereo is wrong.”

She clearly isn’t even using the term “piracy” consistently. Piracy, as communicated by big media in the past, is theft, depriving honest creators of their hypothetical profits.

Aereo’s saying — if networks broadcast this stuff to the anonymous public for free — what profits are they missing out on?

Sweeney — and many traditional media tycoons — don’t realize the nature of the Internet. Communication is done in 1s and 0s that merely represent real-world voices, products and services. Piracy is not in fact theft, because piracy only copies and shares that information that represents real products. It doesn’t physically take from anyone the experience of watching a movie in a theater, or popping a disc into a CD or DVD player.

And frankly, the industry has pushed back against new technology in the past too. The once-thriving movie industry struggled to compete with color televisions in the 1950s. Then it struggled to find a way to stay relevant with the VCR, DVR and now fully digital entertainment. Banning innovation has never worked and won’t work here either.

In fairness, it’s easy to see why big media is threatened. After decades of a booming, expanding television empire that made immortal titans out of nerdy businessmen — television now has to compete again.

The entertainment industry still holds the reins, but they can’t stop the wagon. They’ll either drive into the future or be dragged into it.

They know all this. They just want to ride a few more miles while they have the strength to hold on. Aereo — and other innovative services with growing popularity and market demand — be damned.

It’s the reason News Corp CEO Rupert Murdoch condemns piracy on Twitter. It’s the reason CBS mandates all employees immediately report instances of “unauthorized” pirated CBS television shows, or risk losing their jobs.

The Aereo case represents a desperate appeal to government authority to protect media conglomerates that see their ad dollars declining and their golden age disintegrating into the same irrelevant white noise television was at its birth.

It’s a battle to halt innovation from competitors, like upstart Aereo, which share only what is free already.

It’s a battle in which David beats Goliath, if only in time.

Much like ending prohibition and same-sex marriage, there is a right side of history. The media companies apparently don’t want to be part of it.


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