Tuesday, April 22, 2014

American Broadcasting Companies vs. Aereo

On Tuesday, April 22 the American Broadcast Companies will present their case in the Supreme Court against Aereo for copyright infringement. Aereo is a technology startup that crowd-sources antennas to deliver HD quality broadcast television to users with an internet connection for $8/month.

The Broadcasting Companies assert that the rebroadcasting of their content without paying due fees is copyright infringement. However, due to new laws concerning public/private performances, Aereo could be operating legally. The Supreme Court will eventually rule whether new laws infringe on the original copyright, and whether Aereo owes the broadcasting companies rebroadcasting fees.

This instance is a good example of the blue ocean/red ocean strategy we had discussed in class. The American Broadcast Companies operate in blue ocean strategy. Their format has been challenged by competing media in the past, but this is the first time that a legal product has infringed on its strategy. In the past, broadcast television held an advantage that it was able to deliver time-sensitive content such as sporting events, news, premieres, and special events to the masses. It shaped its strategy around this concept, even providing content online for free through delayed methods. Aereo acts as a digital cloud antenna, possibly allowing it to bystep fees. In the event that the Supreme Court rules in Aereo's favor, fees paid to broadcasting companies from other sources such as Hulu, Amazon, and Apple could be at risk.

Aereo is developing its own red ocean strategy in disrupting the antenna/broadcast television medium. It created a market for internet provided broadcast television. It is questionable whether the Broadcasting Companies have considered them a real threat. It is likely that the Broadcasting company considered legal action as its strategy against copyright infringement; however, there is a chance that legal action may not be effective. Broadcasting companies could have been exploring methods of alternative delivery for content, which would have made it more competitive against Aereo-like startups that charge for its content.

It will be interesting to see how the case plays out, as it can change delivery methods (and strategy) of traditional broadcast media.

Source: http://www.thewire.com/business/2014/04/aereo-supreme-court-hearings/360998/

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.