MRG: Aereo court win not the final word

According to MRG Senior Analyst Mike Paxton, the recent court ruling allowing Internet streaming service Aereo to continue operating was a “big win” for the company, but not the final word on the company or on its controversial business model.

“Most legal experts point out that this case could drag on for a long time, and here at MRG, we suspect that it may end up being like the Cablevision RS-DVR case. In other words, it could take years to settle,” he says.

“In the meantime, there has been a lot of industry speculation that Aereo might be amenable to some kind of deal or partnership with either the broadcasters or with one or more pay-TV service providers. Rumorus abounded this past week that Aereo has been holding clandestine talks with AT&T, Dish Network, DirecTV, and others in an attempt to both broaden its availability and sign up one or two powerful pay-TV allies,” he notes.

“Some of the more specific rumours mentioned that DirecTV had considered partnering with Aereo, but opted not to after reviewing the legal situation. Dish Network, meanwhile, is reportedly another potential suitor. However, it recently denied plans to buy Aereo, but conceded that it is following the service with interest. As for AT&T, the speculation was that it was interested in bundling Aereo’s service with AT&T’s broadband and/or mobile broadband service,” he says.

According to Paxton, it’s hard to figure out what Aereo’s end-game may be, but if any of these recent rumors are based on anything concrete, then the company does seem to be open to being acquired or possibly changing its business model in order to become a bit more ‘industry friendly’. “Here at MRG, we’ll keep an eye on Aereo and its business and legal challenges,” he advises.

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