Half of streaming households would drop pay-TV for Aereo
April 9, 2014
Just a little over a year after Aereo’s last victory in federal appeals court, on April 22nd the Supreme Court will settle the question of Aereo’s legality once and for all. Broadcast networks in the US want Aereo to pay retransmission fees while Aereo says retrans fees do not apply because user-operated individual antennas are akin to a personal recording tool.
Pending this month’s Supreme Court decision, Aereo’s market expansion has been modest. The service is currently available in fewer than 20 markets nationwide. If Aereo wins in court later this month, the company will be free to forge ahead with offering a low-cost alternative to expensive pay-TV bundles to a much wider consumer audience. Centris surveyed its Evolution of Video Community (EOVC) to gauge interest in the service.
It appears that the pay-TV operators’ fears that Aereo has the potential to erode their market share are well-founded. Four out of ten pay-TV households said they would be likely to cancel their TV service and replace it with Aereo if it was available in their market. An additional 13 per cent were undecided, suggesting potential for even greater conversion as consumers learn more about the service. The threat is stronger among pay-TV households that currently subscribe to an online video streaming service, with 45 per cent likely to and 17 per cent not sure if they would replace their pay-TV service with Aereo.
Even if broadcast networks fail to get retrans fees from Aereo, the service does appear to have the potential to broaden the audience base for local networks among households with no current pay-TV service. More than half (53 per cent) of these households said they would be likely to adopt Aereo should it become available in their area.