Bloomberg News

No Aereo? Alternatives Require More Money, Savvy

June 27, 2014

Aereo

The potential demise of Aereo’s $8-a-month service eliminates one of the easiest options for viewers who wanted to watch live football and basketball games, late-night talk shows and local news at a fraction of the cost of cable. Photographer: Andrew Burton/Getty Images

For cord cutters who want to ditch their cable service, watching broadcast TV on a computer or tablet is still possible even if Aereo Inc. disappears.

Companies like TiVo Inc. and SiliconDust USA Inc. make products that work with TV antennas to turn live programs into digital bits and bytes. And online, many shows from networks like NBC and Fox are available through Hulu LLC. Still, those alternatives don’t offer the same combination of ease of use, affordability and up-to-the-minute programming that Aereo does.

The potential demise of Aereo’s $8-a-month service eliminates one of the easiest options for viewers who wanted to watch live football and basketball games, late-night talk shows and local news at a fraction of the cost of cable, which can cost $75 a month. That’s presenting a challenge to a new generation of consumers who have grown accustomed to viewing the programs they want on any device at any time, not just on a television on a network’s schedule.

“I should be able to get on my phone or any device and watch what’s on TV, and that’s been difficult for so many years,” said Jason Gaylor, a 38-year-old freelance application designer from Springfield, Missouri, where Aereo isn’t available. “If I want to watch the Super Bowl or the Oscars or anything that’s a huge part of American culture, I should be able to get it as easily as possible.”

In Limbo

Part of the reason other services don’t measure up is that Aereo may have been too good to be true. In a decision released this week, the Supreme Court ruled against Aereo because it determined that the startup violated broadcasters' copyrights. Aereo said it hadn’t given up its fight, without saying how it planned to respond to the court decision. Broadcasters cheered the ruling, saying it was a victory for the makers of video content because their copyrights were protected.

Officially, the startup’s legal status hasn’t changed yet. Under the Supreme Court’s standard practice, the justices won’t return the case to the lower courts for another month. Meantime, Aereo is still operating and even promoting a month of free service to new subscribers.

Aereo has helped fuel the growth of American cord cutters. The number of Americans who pay for TV through cable, satellite or fiber services fell by about 251,000 last year to about 100 million, the first full-year decline, according to research firm SNL Kagan.

That’s partially because services like Netflix Inc. (NFLX:US), which offers a collection of movies and older TV series, have given viewers an alternative. Netflix had 35.7 million customers at the end of March. Aereo hasn’t disclosed subscriber figures, saying only that it has thousands of customers.

Moving On

People who want to prepare for life without Aereo may consider a hardware alternative that could let them watch broadcast channels without paying for a cable subscription.

TiVo (TIVO:US) sells video-recording boxes for $199.99 to $599.99 that connect to an antenna. To stream recorded shows to tablets or other devices instead of the TV, customers must buy another device for $129.99. In addition, the gadgets require a monthly service plan of $14.99 a month or a one-time payment of $499.99.

SiliconDust’s HDHomeRun tuner can play broadcast programming on computers or stream to other devices for as much as $149.99. The customer needs to download compatible software to be able to watch, pause and record programming on the computer.

Roku Inc.’s devices, which cost $49.99 to $99.99, let customers stream music, movies and TV shows from the Internet, including from Netflix and Hulu, directly to their TVs. To stream live broadcast programming, a customer must buy another device with an antenna from Really Simple Software Inc.’s Simple.TV for $199.99 to $349.99.

‘Whole Package’

The $7.99-a-month Hulu Plus service offers shows like “New Girl” and “Family Guy” after they’ve already aired on TV. It doesn’t offer live programming like sports or awards shows.

For some Aereo customers, the other options just don’t measure up.

“For me to be able to do the same thing via TiVo or any other DVR product, not only would I have a high upfront cost to buy the box, but they also require a monthly fee for just having the guide,” said Cliff Lipple, a 28-year-old management consultant from Atlanta. “For the same price I pay for having the guide, I get the whole package. That’s what put me on to Aereo.”

Dark Ages

Now Lipple is trying to figure out how to get his daily “Jeopardy!” fix -- even if it means going back to the dark ages.

“I guess I’ll have to watch it live, like I’m in 1990 or something,” he said.

For others, like Louis Nelson of Chicago, Aereo’s probable disappearance is the last straw. Giving up cable made sense when it was still possible to access live TV through Aereo, said the 47-year-old application architect at Blommer Chocolate Co.

Now, he said, he’s probably going back to his cable provider to get the live events that Netflix, Amazon.com Inc. and Hulu don’t offer through their streaming services.

“Sometimes I get tired of Netflix and being disconnected from what’s happening currently,” Nelson said. “Netflix just has timeless content. When you watch broadcast TV, you’re more plugged in to the culture right now.”

To contact the reporters on this story: Alex Barinka in New York at abarinka2@bloomberg.net; Caitlin McCabe in New York at cmccabe11@bloomberg.net

To contact the editors responsible for this story: Sarah Rabil at srabil@bloomberg.net Crayton Harrison, Reed Stevenson


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Companies Mentioned

  • NFLX
    (Netflix Inc)
    • $333.65 USD
    • 17.21
    • 5.16%
  • TIVO
    (TiVo Inc)
    • $11.72 USD
    • 0.00
    • 0.0%
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