CBS and FOX May Switch To Subscription-Only Model To Fight Against Aereo

Posted Apr 10, 2013

Executives at CBS Corporation and News Corporation are planning on making their TV networks a paid subscription because of a court decision that upholds Aereo’s right to stream broadcast TV without having to pay retransmission fees.  FOX and CBS are looking for alternative ways to monetize their TV content including cutting off broadcast signals for a subscription-only model.

Aereo is currently only based in the New York metropolitan area.  They plan to expand to over two dozen cities later this year.  ABC, CBS, NBC, and Fox filed two lawsuits against Aereo for infringing on copyrights by streaming broadcast content without having to pay retransmission fees.

The broadcasters asked a federal court in New York for an injunction on Aereo’s service before it went live last summer.  The federal court denied the injunction.  Aereo made a strong argument that customers own the antenna, which means that Aereo is not responsible for paying the retransmission fee.

“We need the dual revenue stream model of retransmission fees and advertising to sustain our business,” stated News Corp. COO Chase Carey at the National Association of Broadcasters’ trade show. “We will pursue our rights fully both legally and politically to protect our rights. But if we can’t get our rights protected, we will pursue business solutions to take our network and turn it into a subscription service.”

News Corp. said that they would work closely with their affiliates to stop broadcasting the Fox channel free and make it accessible only by paid subscription.  People that receive over-the-air TV free using antennas may be forced to pay.  CBS CEO Leslie Moonves said that he wholeheartedly supports what Chase said.

CBS is currently involved in a legal battle against Dish Network over an ad-skipping technology product that they developed.