Bloomberg News

Cable-Cutters Will Rejoice at Aereo TV: Rich Jaroslovsky

February 20, 2013

Aereo’s Online TV

Aereo’s online service provides access to broadcast television over the Internet. Photographer: Marc Perrier/Bloomberg

It’s little wonder so many television networks are suing Aereo.

The upstart online service, which provides easy, low-cost access to broadcast TV over the Internet, is more than just nirvana for would-be cable-cutters. It may also be a huge step toward a future when programming options come a la carte, divorced from the expensive packages assembled by cable and satellite carriers.

If, that is, it’s allowed to stay in business.

Aereo is currently available only in New York City, but the company has announced plans to expand the service to 22 more cities this year, starting in the spring. San Francisco, where I’m based, isn’t one of them, but the company set me up with a temporary account allowing me to use the service as if I were in New York.

I found it both powerful and easy to use, turning my tablet and smartphone into go-anywhere TVs, complete with DVR features to record shows for later viewing -- and, of course, skip over the commercials.

The key to the service -- whose backers include IAC/Interactive Corp. (IACI:US) Chairman Barry Diller -- is a tiny, coin- size antenna, deployed by the thousands at Aereo facilities. When you sign in, you’re assigned two of them, which pull in local over-the-air broadcast signals, just like the full-sized aerials that still dot many rooftops.

Streaming Signal

Aereo takes the signal received by “your” antennas and streams it over the Internet to you. The two antennas allow you to record one program for later viewing while you’re watching another live.

There’s no app or special software to download. You log into Aereo through a standard Web browser and can authorize up to five devices for viewing.

I tried it using Apple (AAPL:US)’s Safari browser on an iPhone and an iPad; Google (GOOG:US)’s Chrome on the iPad, Samsung’s Galaxy S III phone and a Windows PC; and Internet Explorer 10 on a Microsoft (MSFT:US) Surface Pro PC-tablet.

All were successful except for the Galaxy; the company says it’s still working on support for Android devices. (On the Surface, I couldn’t use the Windows 8 “tile” version of IE, but the desktop version let me in.)

The service can also be used on a television that’s equipped with Roku’s streaming-media player or by using an Apple TV box’s AirPlay feature.

To view your Aereo programs, you can choose low, medium or high-quality streams, depending on the speed of your Internet connection, or have Aereo automatically configure itself to your signal.

Remarkably Good

The quality on both live and DVR’d content was remarkably good over both Wi-Fi and 4G LTE, with little of the buffering and stuttering that can sometimes make video over a wireless connection a painful experience.

Video quality over 3G is lower; as with LTE, you also run the risk of rapidly chewing through any data limits imposed by your carrier.

As the service rolls out, customers will only be allowed to subscribe to the channels available in their markets; you won’t be able to watch Providence stations in Tampa, for instance. But the biggest weakness of the service is the programming that’s available -- or more precisely, the programming that isn’t.

Once I logged in to the service, I had access -- via the over-the-air New York City stations -- to all four major broadcast networks: NBC, CBS, ABC, and Fox. I could also get the Public Broadcasting Service and its PBS Kids offshoot, the CW network, retailer HSN (HSNI:US) and Spanish-language broadcasters Telemundo and Univision -- 31 channels in all.

But almost all the big cable networks were missing. No ESPN, no CNN, no Fox News, no HBO or Showtime. Many of their corporate parents, including Walt Disney Co. (DIS:US), Comcast Corp. (CMCSA:US), News Corp. (NWSA:US) and CBS Corp. (CBS:US), are among those driving so-far unsuccessful legal efforts to shut the service down.

Cable Names

The best-known cable network on the service may be Bloomberg TV, which has signed an agreement with Aereo. (The channel is owned by Bloomberg LP, parent of Bloomberg News.)

While the choices are limited, the cost is too: Aereo is a fraction of the typical cable or satellite bill.

For $8 a month, you get all the channels live, plus 20 hours’ worth of storage space for your recorded content; four dollars more doubles the storage to 40 hours. There are also options for an annual subscription -- $80 with 40 hours of storage -- and a $1 day pass.

At those prices, and given the disruptive potential of the service, many established players are reacting as if it poses a major threat. CBS -- whose Chief Executive Officer Les Moonves last year said Aereo was “not something I lose sleep over” -- has since gone to the extraordinary length of barring CNET, the technology-news website it owns, from reviewing the service.

I can’t speak to the legal issues involved. But in terms of Aereo’s power, flexibility and quality of service, it’s a winner.

(Rich Jaroslovsky is a Bloomberg News columnist. The opinions expressed are his own.)

Muse highlights include Jason Harper on cars and Greg Evans on TV.

To contact the reporter on this story: Rich Jaroslovsky in San Francisco at rjaroslovsky@bloomberg.net. On Twitter: www.twitter.com/richjaro.

To contact the editor responsible for this story: Manuela Hoelterhoff at mhoelterhoff@bloomberg.net.


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