Aereo: You Need to Know

Spot-On has written a lot about Aereo, the Internet-enabled TV viewing service but we’re pretty sure that some of our readers are still in the dark about the importance of the company is having on the TV advertising landscape.

So here’s an analogy: Aereo is like Napster – a new service that’s changing how consumers watch TV. Its very existences makes television broadcaster livid.

The folks at Aereo would almost certainly say they’re more like iTunes – a service that adapts to the new online reality. Consumers aren’t watching TV the way they used to. They’re watching what they want, when they want, how they want. And to hell with any schedule. Or even a big screen.

Regardless of your analogy – and we like Napster ’cause of all the lawsuits involved – Aereo is worth watching. Here’s a look at why.

Main reason:  TV broadcasters are worried. They’ve asked the Supreme Court to shut Aereo down. That’s probably not going to happen. But the broadcaster are making point, telling Aereo they’re ready to do battle inside the Beltway.

That’s because they’re not getting any traction with the lower courts. And because they see Aereo cutting into their main source of revenue: advertising.

There’s only one little problem with the broadcaster’s strategy. It assumes they have the power over lawmakers that they’ve enjoyed since the Federal Communications Commission started handing out licenses and someone got the bright idea to run political advertising. Not so fast, we say.

Consider: 30% of younger persons don’t bother with a TV set. (There’s some other interesting data about upper-income well-educated households – i.e., swing voters – in that report as well). What’s that mean? It means Aereo – moving as fast as it can to grow the business – may have more traction with voters than with lawmakers.

That means any decision to outlaw the services is going to run into the same buzz saw that Hollywood ran into when it tried to get Congress to pass stronger anti-piracy laws.  And it is clearly Aereo’s strategy to have enough customers so that when there’s Congressional action, plenty of customers – voters – will chime in with their opinions. It may not have the same ring as “I Want My MTV” but the idea’s no different.

Here’s another interesting point.  Deep down in this story, a TV network exec conceded that only 40% of all shows are watched live. So a time-sensitive placement like a political ad isn’t reaching as many people as it once did.

What’s this all mean for political campaigns? Don’t bet on broadcast. And look at alternatives to television ads.