Fox Cable Threat: Network to Use Charge Customers After Court Ruling?
Executives at Fox's broadcast network have threatened to remove Fox from cable television and shift to a paid television subscription model.
The reason for the possible change is due to the fact that the 2nd U.S. Circuit Court of Appeals in New York issued a preliminary ruling that allowed internet startup Aereo to continue to retransmit broadcast television signals that are captured with an antenna and provided to paying online customers.
As of now, a person can use an antenna and capture a television signal for free, but cable and satellite companies usually have a financial agreement with stations and networks so they can provide content to their customers. With this ruling, anyone can drop their television subscription and use Aereo's service, which is considerably cheaper than current satellite and cable plans.
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"This is not an ideal path we look to pursue, but we can't sit idly by and let an entity steal our signal," News Corp Chief Operating Officer Chase Carey said in a statement. "If we can't do a fair deal, we could take the whole network to a subscription model."
Carey worries that this ruling could change the television industry by undercutting a major source of revenue for the industry in both transmission fees and advertising dollars, which bring in billions of dollars every year and provides for the current domestic television industry model.
Aereo was able to get around current laws by revealing that it uses thousands of antennas to capture the free broadcast signal and then redirects that signal, which is then broadcast through the internet.
"We believe that broadcasting in this country, irrespective of Fox, is a very powerful, fundamental presence," Aereo Chief Executive Chet Kanojia told the Associated Press. "We think somebody will be there to take advantage of that great idea of reaching this mass audience."
