This is a nightmare scenario for broadcasters, although it appears from The Wall Street Journal’s report this morning that no deals are imminent. The story says that Aereo — the controversial Barry Diller-backed service that streams broadcasters’ over-the-air signals to its subscribers — has been chatting with companies including Dish Network and AT&T about potential package deals. Citing “people familiar with the matter,” the story says AT&T could offer broadband customers a deal that includes Aereo’s TV programming. Dish also could use Aereo as part of a small and low-cost package of channels that it would stream to subscribers. These ideas likely won’t move beyond the talking stage as long as broadcasters — including all of the leading networks — are asking the courts to rule that Aereo infringes on their copyrights. They say it appropriates their programming without their permission, and without paying them a dime. Aereo counters that it merely streams local signals that broadcasters already provide for free to anyone who has an antenna.
The stakes are high for broadcasters: If Aereo wins, then pay TV distributors may want to team with it — or create a similar service of their own — to avoid paying broadcasters high fees for the right to carry their must-have programming. Pay TV distributors shelled out about $1.9B last year for broadcast programming, up 33% from 2011, SNL Kagan estimates. These payments now account for about 14% of stations’ revenues, up from 9% in 2010.