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Aereo Provides Cloud TV Service, but Faces Challenges

By mrHTN – HTN Guru from Orlando, FL
Feb 16 2012 08:43 am

Aereo is launching in early March with a solution to the “cable company” problem. Customers are understandably frustrated with the high prices and the poor customer service cable companies provide. Paying for over 1000 channels when customers only want to watch a few shows gives an opportunity for a startup like Aereo to convert cable subscribers to cloud subscribers.

Aereo has an interesting approach to the legal mess that has kept cable companies in control of what people watch. Broadcast TV stations such as ABC, NBC, and FOX provide free Over-The-Air (OTA) HD quality TV signals that anyone within range can pickup with an antenna. Yes, … an antenna similar to the old bunny ears used on older TVs. However, Aereo has new modern day antennas which are the size of a dime. They built a huge array of these miniature antennas and assign one to each of their customers.

Each Aereo customer can then stream the OTA TV shows captured by Aereo through the cloud and to their iPads, tablets or phones. Customers get 40 hours of storage in a virtual DVR for $12/month. Services will only be available in NYC to start, but their plans are to expand.

Besides the legal battles Aereo will eventually be engulfed in, Aereo faces other challenges. Here are just a few:

  1. Hulu Plus with seasons worth of TV shows which include broadcast networks and some cable networks seem like a better value at $7.99/month.
  2. Aereo lacks content from cable channels like ESPN, Nickelodeon, or Comedy Central.
  3. Installing a TV card for $40 in a computer and then using free software to stream does require some technical skill, but it might be worth it to save $12/month.
  4. Time Warner, U-verse, Cablevision and others already offer streaming video services to tablets and phones.
  5. App capable TVs with built-in OTA antennas will be available to offer the same service for free through apps.
  6. Did I mention the legal challenges?

Any disruption to the cable provider market is welcome and it will be interesting to watch Aereo try to overcome these challenges.

 

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