With Aereo shot down, what's next for web TV?

Aereo's business model was ruled illegal by the Supreme Court, but many customers have balked at costly cable service.
Aereo's business model was ruled illegal by the Supreme Court, but many customers have balked at costly cable service. Aereo

Providers seek to win back those viewers who found cable television too expensive

Los Angeles - The Supreme Court shot down Aereo's business model this week, but that doesn't mean customers' desire for a better TV experience is gone.

Americans are still fed up with huge channel bundles, high prices, poor service and the lack of ability to watch all their shows on all their devices. That's part of why Aereo was attractive: It offered local broadcast channels and a few others on multiple devices for just $8 a month.

Industry watchers say the pay TV business must continue to evolve to win over unhappy customers, even if the nation's top court said grabbing signals from the airwaves and distributing them online without content-owner permission isn't the way.

"Even without Aereo, the reason people were cutting the cord, for cost reasons and so on, those don't go away," said Robin Flynn, an analyst with research firm SNL Kagan.

Last year, the number of pay TV subscribers in the U.S. fell for the first time, dipping 0.1 percent to 94.6 million, according to Leichtman Research Group.

Into that breach have leapt companies that have offered quality TV content online for low cost, like Netflix and Amazon. Hulu, which is owned by major broadcast networks ABC, NBC and Fox, offers full episodes of popular shows the next day for free.

While that's not live TV, which Aereo offered, for many it's a good-enough substitute.

The decision against Aereo is a setback, but not a fatal one for people who want to break away from traditional TV, said Bill Niemeyer, senior analyst at TDG Research.

"While the content on the major broadcast networks is very important for some people, it's not important for everyone," Niemeyer said. "So it's a dent, but I don't think it's going to significantly change the trends."

If anything, the rise and fall of Aereo has highlighted an important fact - that high-quality TV signals are available on the airwaves for free - something that might have been forgotten if Aereo hadn't insisted that its technology simply replicates the antenna and wire that an average person could set up on their own.

"What Aereo has really done in our perspective is to address the lack of understanding that over-the-air is free," said Mark Buff, CEO of Mohu, a company that makes flat indoor antennas that attach to walls.

Mohu has sold 1.5 million antennas that work in dense urban areas like New York where Aereo is believed to have had a small subscriber base. It is about to launch Mohu Channels, a device that blends Internet video services like Netflix with free-to-air TV in a single channel guide.

"We certainly do see and believe that the cord-cutting movement is on the rise," he said.

Dish Network Corp. said it's preparing to launch an online TV service with channels like ESPN, ABC, Disney Channel and others for about $20 to $30 a month before the end of the year. The target audience is young urban professionals who don't want to watch more than 20 or 30 channels.

Since last year, Comcast Corp. has offered a slimmed down package combining Internet service, a little more than 10 local TV channels and HBO for $40 a month for 12 months. That's just $10 more than getting the Internet alone.

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