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Aereo's "Sold Out" Service In NYC Only 300,000 Subscribers

Feb 3 2014, 12:50am CST | by

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Aereo's "Sold Out" Service In NYC Only 300,000 Subscribers
 
 

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Aereo's "Sold Out" Service In NYC Only 300,000 Subscribers

Last Friday, subscribers who tried to sign up to Aereo’s streaming TV service in the NYC area got a message saying the company was out of capacity, with no ETA as to when more would be added. While some in the media used the “sold out” reference to imply that Aereo must be signing up a lot of people, being sold out of something doesn’t mean much unless you know what quantity of the product or service the company had available.

Aereo won’t publish, disclose or comment on the number of subscribers they have per city or overall, but some investors in the company have been telling multiple people in the industry that to date, Aereo has signed up “less than 500,000″ subscribers in NYC. One told me the number was lower and closer to “300,000 paying customers” in the NYC area. There is no way to verify these numbers, however, based on statements Aereo has made in media interviews before, these numbers would make sense. In 2012 when Aereo was building out their service, the company said that a large market to them, at the time, would be about 300,000 customers in one city. Just over a year and a half ago, we know Aereo only had a few thousand paying customers, and services like this take time to scale.

With Aereo running out of capacity in NYC, it’s just another example of how their streaming TV service, isn’t going to replace cable TV, for a large portion of the market, ever. Streaming services are not as easy to scale out as cable TV services are. Internet based services don’t have the same level of video quality or content choices as cable and are subject to many more technical challenges. This isn’t the first scalability and roll out problem for Aereo, nor will it be their last. The company originally planned to offer their online TV service in Chicago in September, but over four months later, the service still isn’t available due to issues with their beta site. Adding to their problems, the company announced plans to offer an Android app in 2012, but released it more than a year later, in October of last year.

To date, Aereo has raised almost $100M in funding and even if they had 1M subscribers overall, they still would not have captured even 1% of the pay TV market. Aereo is just another example of many that shows how expensive it is to scale out video based services over the Internet, and that’s without Aereo spending any money on content licensing costs. Even with these numbers, many in the media are so quick to make general, high-level statements about Aereo without pointing out any of the important facts, which will keep Aereo from being a mainstream service. As we have seen from consumers time and again, the content services that succeed in the market are ones that have a deep catalog of content to pick from and work across a lot of devices. Unfortunately, Aereo has neither of these.

Of the thirty three channels Aereo has available in the NYC area, ten of them are foreign language based, two are home shopping related and three focus on local NYC issues. That leaves eighteen other channels of which probably half, most consumers would have no interest in watching. Out of the thirty three channels, the average subscriber would realistically be interested in ten or less. That’s not a deep selection of content channels to pick from and none of them include cable TV channels, other than Bloomberg TV. When it comes to streaming devices in the living room, Aereo is only supported with a dedicated app on one streaming box, the Roku. They have no support on smart TVs, connected Blu-ray players or gaming consoles and while many report that Aereo has Android support, their app only works on devices that run Android 4.2 and above. According to Google, those devices represent only 24.6% of the total Android devices in the market today.

The media as a whole has fallen in love with Aereo as most writing about the company have never even used their service, seen the limitations and don’t know how Aereo works. Many have only even heard of Aereo because they are being sued by broadcasters, which makes them think Aereo must be a threat. However it’s not Aereo the broadcasters are worried about, it’s the idea behind Aereo. As a company, Aereo does not have the money, brand or technology to scale their service to impact broadcasters, but someone with more resources might. If Aereo can get away with not paying retransmission fees, then what happens if a larger company takes Aereo’s idea and improves upon it? Aereo’s service itself isn’t very compelling and isn’t disruptive, it’s the idea of how Aereo is going about it that is.

Running out of capacity in the NYC area could not have come at a worse time for Aereo, two days before the Super Bowl. And with the Winter Olympics starting in only three days, Aereo will take a big hit if they can’t add more capacity this week. There was also some interesting news last week from the Supreme Court, which announced they decided to use the broadcasters’ formulation of the question in dispute to be resolved by the Court, which you can read an analysis of here. As we have seen from consumers time and again, the content services that succeed in the market are ones that have a deep catalog of content to pick from, work across a lot of devices, are reliable with good video quality and are easy to use. Unfortunately, Aereo has none of these things going for their service or their business.

Source: Forbes

 

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Update: 6

Aereo CEO speaks on future of company, industry as broadcasters challenge it in Supreme Court

Source: Canadian Business Online

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NEW YORK, N.Y. – The future of Aereo, an online service that provides over-the-air TV channels, hinges on a battle with broadcasters that goes before the U.S. Supreme Court next week. For as little as $8 a month, Aereo subscribers in New York and 10 other markets can watch shows live or record them using Aereo’s online digital video recorder. Subscribers access programming with computers, smartphones and other devices, as well as with TVs with Roku or Apple TV streami ...
Source: Canadian Business Online   Full article at: Canadian Business Online 4 hours ago, 3:47pm CDT
 


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Update: 5

The ABCs Of Aereo: Streaming Service Wants “Something For Nothing”, Former Top Federal Lawyer Says

Source: Deadline

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Editors Note: This is the second of three Deadline posts that lay out the issues in the Aereo case, which Deadline Legal Editor Dominic Patten will cover from the Supreme Court next week. Today: An interview with former Acting Solicitor General Neal Katyal, who is serving as an adviser to the broadcasters in their case against the streaming service.  Related: The ABCs Of Aereo: What Is Aereo And Why Are Broadcasters Taking It To The Su ...
Source: Deadline  Full article at: Deadline 8 hours ago, 11:31am CDT
 

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Update: 4

Aereo and broadcasters spar ahead of do-or-die Supreme Court trial

Source: The Verge

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Aereo is trying to win over public support ahead of its big battle with broadcasters in the Supreme Court next week. The service, which allows customers to stream broadcast TV on demand, has launched a website called Protect My Antenna to explain how Aereo works and what challenges it's facing in the court. Aereo CEO Chet Kanojia also sat down for a lengthy interview with Katie Couric, which also includes with a lengthy explainer on how Aereo works and why it believes t ...
Source: The Verge  Full article at: The Verge 10 hours ago, 9:40am CDT
 

Update: 2

The ABCs Of Aereo: What Is Aereo And Why Are Broadcasters Taking It To The Supreme Court?

Source: Deadline

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Editors Note: The first of three Deadline posts that lay out the issues in the Aereo case, which Deadline Legal Editor Dominic Patten will cover from the Supreme Court next week. Today: A primer about Aereo and what’s at stake in the dispute with broadcasters. U.S. Supreme Court justices are so mistrustful of technology that they bar TV cameras from their proceedings and require visitors to check their smartphones at the door. But on April 22 they will ...
Source: Deadline  Full article at: Deadline 1 day ago, 12:01pm CDT
 

Update: 1

Aereo Sets A Date With Google’s Chromecast

Source: Broadcasting & Cable

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In a move that will bring live TV to the popular Chromecast streaming adapter, Aereo announced Thursday that its broadband video and cloud DVR service will be “Google Cast Ready” on May 29. That’s a little more than a month after the U.S. Supreme Court is scheduled to hear oral arguments in the case between Aereo and major ...
Source: Broadcasting & Cable   Full article at: Broadcasting & Cable Apr 10 2014, 2:49pm CDT
 

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