Aereo, the startup that wants to deliver broadcast TV to any device, said it would offer NYC residents a free hour of TV a day and charge $1 per day for access to its service. The new pricing structure was announced two weeks after 17 broadcast networks who are suing the company lost their request to suspend the service ahead of a trial.
Aereo is using a unique structure to get around some older legal rulings, but essentially what it is doing is broadening the way people access broadcast TV — and in the process taking some of the control over distribution from the broadcasters. Folks can record shows and access broadcast TV on any device via the web — something that is difficult for many subscribers who may not have a cable subscription or who want to see older episodes of shows that might not still be playing on the broadcasters’ own web sites.
This allows time shifting, storing shows and fast forwarding through advertising. It also undercuts broadcasters’ value to cable companies that pay retransmission fees for access to some broadcast channels. For example, a person using Aereo could have watched the Olympics opening ceremony (yes, the edited NBC version) a day later even if they didn’t have cable. For people– and there are more than you might think — who can’t get access to the over the air TV signals (it can be challenging for apartments dwellers or those in valleys) this would have given them an option outside of buying cable.
Unfortunately for those outside of New York City, the Aereo service is not available to you (the company is promising to expand soon). But for those who can get it, here’s the new pricing plan:
At $1 a day, this means people on the go, could use their iPad and a Wi-Fi network to watch a one-time sporting event in real time, or record it for later. At $8 a month it offers a credible alternative to Hulu, which also offers many broadcast television shows and is owned by some of the broadcasters. In fact, Aereo might be considered better since you can skip ads and if you record the shows they won’t slip off the service after a week or two. Plus, if Hulu goes to a model where users can only access certain shows if they have a cable subscription it becomes much less valuable to cord cutters.
Judging from this pricing plan, Aereo is both using a marketing gimmick with its one hour free, but it’s also clearly stating a value for over the air broadcast content. And that value isn’t one that the broadcasters (and likely content owners will like).