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‘Legal’ Hybrid IP Service Competitors Race to Fill Aereo Void

Several fledgling companies that offer similar yet slightly different technology send out releases and public notices stating they have the solution to Aereo's fans.

Soon after the U.S. Supreme Court ruled that nascent Hybrid terrestrial/IP service Aereo was re-transmitting broadcasters’ content illegally, several fledgling companies that offer similar yet slightly different technology were quick to send out releases and public notices stating they had the solution to Aereo’s fans.

Literally a day after the Aereo ruling last week, company called Simple.TV took to Twitter with direct messages designed to attract new users to its service. “Former Aereo customer? Join the Simple.TV Family,” the company wrote on Twitter. Later that same day, a Cupertino, California-based technology vendor of Cloud TV and Connected Home solutions called Entone announced a “legal version of Aereo,” called Fusion TV, that is offered through broadband service providers and combines over-the-air (OTA) and over-the-top OTT video services bundled with broadband Internet. In markets where copyright agreements have been secured, particularly those outside the U.S., FusionTV supports the delivery of live television over the open Internet.

Commenting on the Aereo case and his company’s perspective, Steve McKay, Entone’s CEO, said in a statement that, “While we admire the bold vision and disruptive potential of Aereo, there are other ways of delivering lower-cost services to consumers without costly copyright battles.”

Not a direct-to-consumer service, Entone’s FusionTV service—which uses both HLS for streaming and DIAL protocol for mobile and second-screen applications—supports broadband providers (such as cable, satellite and Telcos) that have chosen not to provide a premium Pay TV service, but still want to offer a video-centric broadband tier to their subscribers. The company said that by leveraging OTA video and presenting that seamlessly alongside numerous OTT services, “the consumer can increasingly approximate the richness of a premium Pay TV service.”

Indeed, soon after the Supreme Court ruling, many had speculated that the judges’ 6-3 vote would stifle new innovation regarding the delivery of video content because, as part of the ruling, “public performances” of copyrighted content were deemed illegal. [A single user with an antenna on their roof constitutes a “private” performance and is thus legal.]. The broadcast industry has countered that the case was simply a matter of copyright infringement and not paying broadcasters the retransmission fees they feel they are legally entitled to.]

However, entrepreneurs like Mark Ely, founder of Simple.TV, and others appear undeterred by the broadcasters’ threats. “We’re telling Aereo customers: ‘Your favorite service is going away. Here’s an idea that isn’t,'” Ely told the New York Times. Founded in 2011, Simple.TV, for $200 a year, offers customers a small set top box (which the company calls “your own private TV server”) that can record and distribute live HDTV channels to “up to 5 of your friends and family at the same time – no matter where they are.” [In fine print the company says features like out-of-home streaming, series recordings, and download and sync to mobile devices for off-line playback require the Simple.TV Premier service, at $250 per year).

The Simple.TV box sits on a consumer’s home network, connects to an aerial antenna (or ClearQAM cable), and streams TV to their devices, plus records to storage that the user can attach (and expand as necessary).

What’s becoming clear is that the marketplace will not stop at trying to get a piece of a $167 billion American television market. This includes OTT stalwarts like Apple TV, Roku, Sling Media, Amazon Fire TV and others. According to research form SNL Kagan, 101 million households in the U.S. subscribe to pay TV (which was a decrease of about 7 percent from 2013). However, the number of households with Internet-connected “smart” TVs and/or “chord-cutters” using OTT services to watch TV has increased to 7.6 million, up about 30 percent from 5.8 million in 2013.

“It’s quite possible this ruling will spur even more innovation around Internet delivery of TV services,” said Mark Evensen, founder and CTO of Entone, in a statement. “We expect to see operators and broadcasters team together to offer re-transmission of broadcast television services over the Internet. We are already working with numerous global operators to do just that, leveraging our FusionTV software platform including adaptive bit rate streaming of live TV programming.”

The Simple.TV box sits on a consumer’s home network, connects to an aerial antenna (or ClearQAM cable), and streams TV to their devices.

Indeed, throughout the Aereo vs. Broadcasters’ dispute, many in the industry have challenged the networks to come up with their own version of a hybrid OTA/IP service to reach more viewers faster and on viewers’ own schedule. Various “TV Everywhere” models have been experimented with, but they are not available in all markets or from all cable, satellite and Telco service providers.

“I don’t think you are going to find a silver bullet to disrupt the broadcast industry,” said Kenneth Lerer, a venture capitalist who has invested in a series of digital media start-ups, to the Times. “I think you are going to find a lot of little bullets. Aereo was hoping it was a silver bullet.”

Indeed, there are many such “bullets” waiting in the wings, although different than Aereo in that they require the customer to own the antenna (again, thus making TV viewing a private performance”). And Aereo itself said it’s not done. In a statement to reporters a few days after the unfavorable court ruling, said the ruling would cause it to “pause” the business but that it was “not shutting down. Aereo is consulting with the court and mapping out next steps.”

The Aereo service was officially “paused” on Saturday, June 28th (11:30 a.m. ET) and the company said it would refund subscribers their last paid month.

The open letter from Aereo founder Chet Kanojia read:

“The spectrum that the broadcasters use to transmit over the air programming belongs to the American public and we believe you should have a right to access that live programming whether your antenna sits on the roof of your home, on top of your television or in the cloud.

“On behalf of the entire team at Aereo, thank you for the outpouring of support. It has been staggering and we are so grateful for your emails, Tweets and Facebook posts. Keep your voices loud and sign up for updates at – our journey is far from done.”

In response to criticism that broadcasters were attempting to protect an aging, monopolistic television business model, Leslie Moonves, CEO of the CBS network, told the Times, “We are not against people moving forward and offering our content online and all sorts of places, as long as it is appropriately licensed,” he said. “Innovation is still alive and well and thriving.”