Two years ago, I joined a growing population of TV watchers in cutting the cord from my cable company. I canceled my cable TV service from Time Warner and switched my plan to Internet only, which costs me about $40 per month.
My setup is now a 55-inch TV connected to an Apple TV box and a $20 "rabbit ear" HD antenna that lets me pull in network TV from over the airwaves. I pay $7.99 for Netflix (which I stream through my Apple TV) and use an HBO GO password a friend was kind enough to give me so I can keep up with two of my favorite shows, "Game of Thrones" and "Veep." And I can get many cable shows like "Mad Men" (another personal favorite) the next day by ordering it on my Apple TV through iTunes.
It's the perfect setup for me. My cable subscription came with a zillion channels I had no interest in watching, so now my Internet-only diet lets me only pay for the stuff I want to see. Most importantly, I've saved a boatload of money over the last two years.
If the future of TV watching really is something like my setup, then a startup called Aereo, which lets you stream live network TV over the Internet, is perhaps the most important company trying to make it happen today. And networks are trying to kill it, suing it all the way to the Supreme Court.
But Aereo is a conundrum. If it loses its legal battle, it could slow down innovation not just in TV, but cloud computing in general. For that reason alone, I hope Aereo comes out on top. Still, Aereo as it works today is a pointless service, a workaround of existing copyright law that charges you $8 per month for something many people probably don't realize they can already do for free.
Here's how it works. In the handful of U.S. cities Aereo operates, it packages together thousands of dime-sized antennas that work just like the traditional rabbit ears you're familiar with. Those antennas pull in over-the-air broadcast networks like ABC, NBC, and CBS and then send the signal over the Internet to a customer's computer, smartphone, or tablet. Aereo subscribers also get a virtual DVR service that lets them program recordings to stream later. Since Aereo assigns each customer her own antenna, it argues that it operates no differently than a company that rents antennas and DVRs and installs them directly in the household.
And that's why Aereo is basically useless for most people. There's no need to pay $8 per month for something that's already free. If you want all the free network TV you can handle, you can just do what I did and buy an antenna for around 20 bucks. Paying for Aereo is like paying for tap water at a restaurant.
Aereo today feels more like a proof of concept, a challenge to traditional broadcasters that says, "Hey, if you won't give us TV over the Internet, we'll find a way to make that happen." It works as advertised, but unless you don't own a TV, there's no value in paying for it. I don't see Aereo as a useful product, but a bold statement about what TV should be in the Internet age.
The best case scenario would be for Aereo to win its case against the networks and continue to operate. But instead of letting Aereo stomp all over them, the networks should realize they need to treat the Internet just like they treat the airwaves and start broadcasting their shows online.
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