Time Warner Cable (NYSE: TWC) may be able to stop paying local broadcasters retransmission-consent fees if the courts allow Aereo TV to continue delivering local TV stations to viewers on connected TVs and mobile devices, CEO Glenn Britt told analyst Thursday.
"Aereo I think is a very interesting idea. I have no idea whether the courts will find it legal or not, but it's certainly something we're looking at," Britt said on the MSO's first-quarter earnings call. "Obviously we've been quite interested in the whole retransmission front. So if it's found to be legal--not paying retransmission consent--it's a very interesting thing," he added.
Last month, Aereo launched a platform in New York that allows viewers to access 20 local broadcast channels for $12 monthly. The company, run by Navic Networks founder Chet Kanojia, relies on receiving local broadcast signals from arrays of dime-sized antennas and lets users store programming on network-based DVRs. It can transport live and taped content to connected TV devices, computers and mobile phones and tablets via HTML5.
Aereo could give Time Warner Cable and other cable MSOs leverage to negotiate deals with broadcasters on more favorable terms, and make it more difficult for station owners to pull their signals from multichannel providers that refuse to pay increased fees. But the company, which is backed by Barry Diller's IAC, faces two lawsuits from Fox, ABC, CBS, PBS and other broadcasters that allege copyright infringement. Aereo claims that the same laws that allowed Cablevision (NYSE: CVC) to launch its network DVR protect its platform, and it has hired the attorney that represented Cablevision in litigation sparked by its RS-DVR to battle the broadcasters.
Time Warner Cable has been engaged in several retransmission-consent disputes with broadcasters in recent years, including a dispute with an NBC affiliate in Texas that pulled its signal from cable subscribers in December. Earlier this week, Britt penned a joint op/ed with DirecTV (Nasdaq: DTV) CEO Mike White, in which he chastised broadcasters for hiking retransmission-consent fees sevenfold since 2006. Last year, broadcasters raked in $1.5 billion in retransmission-consent fees.
Also worth noting from Time Warner Cable's Q1 earnings call:
- Britt said Time Warner Cable is talking to consumer electronics manufacturers about delivering programming to new devices, suggesting cable programming could become available on connected TVs and mobile devices. "If people have devices with great user interfaces, we would consider publishing APIs (application programing interface) to them. We're in discussions with a number of different companies about doing just that," Britt said.
- Time Warner Cable added 73,000 wideband subscribers during the first quarter. About 14,000 of its new wideband customers came from subscribers that ordered its premium Signature Home package, Time Warner Cable COO Rob Marcus said.
- While Time Warner Cable recently kicked off joint promotions with Verizon Wireless (NYSE: VZ) in which the companies are offering $200 gift cards to subscribers that order new services, the companies are more focused on offering "product enhancements that can only be experienced if a customer is a subscriber to both services," Marcus said. Verizon, Time Warner Cable and other cable MSOs have formed a joint venture focused on innovation as part of their recent spectrum and marketing deals.
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