Tuesday, April 9, 2013

This is Capitalism

And Corporations hate Capitalism

Some time ago, I cut my cable (well, for TV) and started using a service called "PlayOn" which allows me to watch internet TV.  It serves all my needs (I only watch OTA broadcasts for sports anyway) quite well.  However, many people do not like such services (PlayOn is not the only one), because they do not provide live TV.  If you want live TV, you're limited to what's available with your antenna, or you have to keep cable (or satellite, or whatever).

Or, rather, you did.

Let me introduce you to a cool company of which few (if any) of you have heard: Aero.  It seems the minds behind Aero were also rather distressed at the idea live sports were only available if you had cable, satellite, or if they were OTA in your area.  So they did something about it.  They capture the OTA signal, digitize it (well, it's already digital now- maybe I'll get into the irony of that later), and pipe it through the internet into your home.

Now, right-thinking, entrepreneurial types look at that idea and say, "Why didn't I think of that?"  The big Media Corporations look at it, and say "No!  Thou shalt not!"

At the root of their argument is the idea that they, and only they, should be allowed to transmit their content outside a given viewing area.  Their argument fails, unless they want to take PlayOn, AppleTV, GoogleTV, Hulu, and a host of other groups to court.  See, these other groups have been doing exactly what Aero will be doing, with the exception of sporting events and with the exception of "live," for quite some time.

Now, I don't want to get too far into the weeds about the legal argument here, but it is important background information.  In fact, the Media Corporations have made exactly this argument, and so far no court has agreed with them.  They don't have to broadcast OTA.  Given that they broadcast OTA, that content is "free."  The media company's only option (currently) is to stop broadcasting over the air.  They could move to a subscription only model.

However, Big Corporations are actually anti-capitalist.  Well, many Big Corps are.  Using Government interference, they force competitors out of business.  It's true all the time.  If you ever hear of GE or P&G or Exxon or whoever "supporting" new regulation, the reason is that regulation will be difficult for them to follow, but it will be impossible (or near enough so) for smaller competitors to follow.

And the same is true here.  News Corp is threatening to take all their content to subscription only.  That would be dumb, but it's their right (I like Bones; I don't like it enough to subscribe to cable for it.  I like NFL football; I don't like it enough to subscribe to cable for it.)  Most other companies, however, are threatening something much more ominous:
“If Aereo’s model is ultimately upheld,” Stifel Nicolaus analysts Christopher King and David Kaut wrote in a recent note, it could force “the broadcast/content companies to seek Congressional relief.”

Yes, you read that correctly: rather than compete with new services, rather than find some way to offer the same service at a price people are willing to pay, the media companies will "seek Congressional relief."  That is, they will seek to change the law in a way that benefits them and hurts its competition- not to mention consumers.

As of now, there is no legislation that I know of about this.  But it's something to keep an eye on.  Competition is good for consumers.  Big Corporations are not.

1 comment:

  1. Reg Ace post I want to wish you Best of Luck! On your LLc.