News Corp threatens to move FOX to cable

[trev57 46]

Because I'm to lazy to right my own article...

 

 

NEW YORK (CNNMoney) — News Corp. is threatening to make Fox a pay-TV channel if streaming TV startup Aereo stays in business.

 

“We believe that Aereo is pirating our broadcast signal,” News Corp.

president and COO Chase Carey said in a statement. “[W]e won’t just sit

idle and allow our content to be actively stolen.”

 

Broadcasters have tried to kill Aereo for a year, suing to put the

service out of business. But a federal appeals court last week upheld a

ruling that said the startup can legally allow subscribers to stream or

record live broadcast TV.

 

Networks think Aereo should have to pay them to retransmit their

programming, just like its affiliates, cable companies and satellite

providers do. These range from less than $1 per subscriber for some

broadcast channels, to $55 for premium content like Disney’s ESPN.

 

Aereo’s defense is its technical setup: The company houses thousands

of tiny antennas in its data centers, and it assigns each customer a

unique antenna. People who get broadcast TV over the airwaves (which

Aereo users technically do) are legally allowed to record and stream

that signal digitally.

 

Broadcasters say the antenna setup is an unfair dodge that allows Aereo to commit piracy.

 

That’s why News Corp. is taking an “us or them” approach.

 

It’s very unlikely that the media giant would actually yank Fox from

the broadcast lineup: About 10.6 million U.S. households get television

exclusively over the air and would no longer be able to watch Fox if

News Corp. actually made Fox a cable channel.

 

In its bluster, the News Corp. clearly wanted to make a point. The

company complained that broadcasters need both advertising and

subscription revenue to remain viable, and that all News Corp. wants to

do is “remain in the driver’s seat of our own destiny.”

 

But News Corp. and its broadcaster friends haven’t convinced the

courts. Soon after Aereo’s early 2012 launch in New York, it was slapped

with copyright infringement lawsuits from News Corp., ABC parent

Disney, CBS and Comcast’s NBC Universal. (CNNMoney parent company Time

Warner is not involved in any litigation against the company.)

 

Last July, a Manhattan federal court denied the broadcasters’ request

for a temporary injunction to shut Aereo down; last week, an appellate

court upheld that ruling. The company is launching in 22 new U.S.

cities, including Atlanta, Boston, Philadelphia, Dallas, and Houston,

this year — but it’s avoiding states like California, where it may face a

tougher legal climate.

 

Aereo’s big-name investors are determined to keep the startup

running. That star-studded list includes Highland Capital Partners,

FirstMark Capital and Barry Diller’s IAC. Ironically, Diller built the

Fox network from the ground up and served as its CEO until 1992.

 

[T.L. Hughes 760]

For those who doubt that this will happen, keep in mind that Fox is the same network that downgraded affiliates in about six markets in 2011 and 2012 (even dropping news-producing stations for stations who outsource news programming) because the affiliates they had then didn't want to pay a larger share of retrans revenue. If Fox is willing to do that, the network transitioning to cable-only wouldn't be completely impossible.

 

That being said, there are a lot of people who would have something to say about it. It's easy to see how such a move by any broadcast network could impact local stations. The roughly 10% of those who receive television strictly over-the-air (myself included) would be impacted since such a move could involve the networks turning local affiliates and O&Os to cable and satellite-only services. ABC, NBC, CBS or Fox going cable-only could also have a devastating impact on their affiliates, if they went against transitioning to a subscription model, which may result in them going dark unless they can find a way to make an independent model work (a la several of the indie stations that became network affiliates in 1995) - the same issue if the networks required their affiliates to go cable-only. Either or, that would cause problems - putting some people in areas where natural disasters like tornadoes, winter storms and hurricanes are prevalent in serious danger. My hometown is part of Tornado Alley (and is at the top of the list of metropolitan areas that have historically been struck by twisters), so the risk of losing over-the-air stations that provide emergency information - especially during severe weather season - is a pretty scary thought.

 

Even though the FCC has caught some flack with the coming spectrum auction shutting down some OTA stations once their spectrum is sold off for telecom use, the agency could have serious reservations if Fox or any other networks actually went forward with what Chase Carey threatened. The sports organizations that the networks have deals with might have an issue, too. The networks would also sacrifice part of their audience net with such a move, that could result in the Big Four getting ratings comparable to many cable channels. To sum up, while I'm not sure if Fox will pull the trigger on this (and have doubts that it will), for Fox or any broadcast network that is thinking of going cable-only, it's not worth the drawbacks and risks involved. Which is why they shouldn't do it and likely won't any time soon.

[Mrtraveler01 737]

For those who doubt that this will happen' date=' keep in mind that Fox is the same network that downgraded affiliates in about six markets in 2011 and 2012 (even dropping news-producing stations for stations who outsource news programming) because the affiliates they had then didn't want to pay a larger share of retrans revenue. If Fox is willing to do that, the network transitioning to cable-only wouldn't be [i']completely[/i] impossible.

 

That being said, there are a lot of people who would have something to say about it. It's easy to see how such a move by any broadcast network could impact local stations. The roughly 10% of those who receive television strictly over-the-air (myself included) would be impacted since such a move could involve the networks turning local affiliates and O&Os to cable and satellite-only services. ABC, NBC, CBS or Fox going cable-only could also have a devastating impact on their affiliates, if they went against transitioning to a subscription model, which may result in them going dark unless they can find a way to make an independent model work (a la several of the indie stations that became network affiliates in 1995) - the same issue if the networks required their affiliates to go cable-only. Either or, that would cause problems - putting some people in areas where natural disasters like tornadoes, winter storms and hurricanes are prevalent in serious danger. My hometown is part of Tornado Alley (and is at the top of the list of metropolitan areas that have historically been struck by twisters), so the risk of losing over-the-air stations that provide emergency information - especially during severe weather season - is a pretty scary thought.

 

Even though the FCC has caught some flack with the coming spectrum auction shutting down some OTA stations once their spectrum is sold off for telecom use, the agency could have serious reservations if Fox or any other networks actually went forward with what Chase Carey threatened. The sports organizations that the networks have deals with might have an issue, too. The networks would also sacrifice part of their audience net with such a move, that could result in the Big Four getting ratings comparable to many cable channels. To sum up, while I'm not sure if Fox will pull the trigger on this (and have doubts that it will), for Fox or any broadcast network that is thinking of going cable-only, it's not worth the drawbacks and risks involved. Which is why they shouldn't do it and likely won't any time soon.

It's incredibly stupid though. How would a cable-based Fox differentiate from its networks like FX and the new comedy-oriented FXX?

 

As you mentioned with the sporting contracts. Something tells me the NFL would not be too thrilled having its NFC rights on a cable-only network since I think they try to have as many NFL games OTA as they can.

 

But then again, foresight and News Corp rarely go together in the same

sentence.

[CircleSeven 1945]

It looks like Univision might be thinking the same thing. This would not be good. Especially in the 3rd largest market, where most of those viewers watch it OTA.

[Samantha 2878]

That would be even worse for the high-OTA-population that is Hispanic viewers.

[Pavelsauce 12]

To reiterate what others have said, I really don't think it's a good decision. Besides, they already have multiple cable channels.

[channel2 874]

All this when cord-cutting has been picking up and when a lot of members of the coveted younger demo are skipping pay TV entirely.

 

These people live in Bizarro World.

[News 9 Viewer 100]

It's incredibly stupid though. How would a cable-based Fox differentiate from its networks like FX and the new comedy-oriented FXX?

 

As you mentioned with the sporting contracts. Something tells me the NFL would not be too thrilled having its NFC rights on a cable-only network since I think they try to have as many NFL games OTA as they can.

 

But then again, foresight and News Corp rarely go together in the same

sentence.

Fox would probably shut those networks down and move the most popular FX shows (It's Always Sunny in Philadelphia, Louie, and Sons of Anarchy) to Fox.

 

The NFL could always move NFC games to NBC. The Peacock Network would love to have Sunday afternoon games to lead into SNF (not that it needs them). The Saturday Wildcard games could be split between CBS and NBC or given to ESPN and aired on ABC.

 

But Murdoch isn't stupid. He won't allow a News Corp owned network to lose millions of viewers and risk losing the NFL, a league Fox owes nearly all its success to.

[mre29 1343]

I imagine a lot of Fox affiliates would be rather upset if Fox up and moved to cable, too.

[Twigz1 9]

I imagine a lot of Fox affiliates would be rather upset if Fox up and moved to cable, too.

So true. Especially since a lot of them just got their new O&O graphics for their newscasts; some even made adjustments to their sets, talk about a huge problem IF that happened. But, anything can happen as the kids say.

[AaronQ 260]

So true. Especially since a lot of them just got their new O&O graphics for their newscasts; some even made adjustments to their sets, talk about a huge problem IF that happened. But, anything can happen as the kids say.

And don't forget that WJZY/WMYT is going to be owned by FOX within 2 month from now.

[mre29 1343]

I imagine those affiliates that have Fox on their .1 channel and another of the major networks on their .2 or .3 would simply move that network to the .1.

 

I wonder what would happen to MNTV, though.

[Guest Former Member 207]

It looks like Univision might be thinking the same thing. This would not be good. Especially in the 3rd largest market, where most of those viewers watch it OTA.

In Univision's case, unlike Fox, they're still available only on cable and satellite in a lot of other markets, although has continued to dwindle in the last several years with the growth of its OTA station base. Fox, too, does have an history of being offered only on cable and satellite through its FoxNet feed back during the 1990s.

 

That said, I think Fox is bluffing a lot of ways, and I think the main reason why Fox stays over-the-air is because they don't want to face the wrath of its affiliate group through lawsuits due to breach of its affiliation agreements. Eventually, Aereo will cooperate with Fox, either offering a retransmission agreement, or they'll pull the signals down.

[A3N 996]

In Univision's case, unlike Fox, they're still available only on cable and satellite in a lot of other markets, although has continued to dwindle in the last several years with the growth of its OTA station base. Fox, too, does have an history of being offered only on cable and satellite through its FoxNet feed back during the 1990s.

 

That said, I think Fox is bluffing a lot of ways, and I think the main reason why Fox stays over-the-air is because they don't want to face the wrath of its affiliate group through lawsuits due to breach of its affiliation agreements. Eventually, Aereo will cooperate with Fox, either offering a retransmission agreement, or they'll pull the signals down.

Good points. I think that maybe FOX and the other broadcasters are threatening to put their signals on cable-only as an excuse to use in court. If their lawyers argue that Aereo could force them to cable, then maybe a judge might be more inclined to side with the broadcasters. Plus, by going public with it, FOX wants the viewers/politicians to be afraid/angry and maybe spur some change.

[Weeters 1812]

A group of stuffy old media execs responding to technology in the only way they know how (crying and demanding it goes away)? Say it ain't so!

 

Hey. Hey FOX. Hey CBS. Here's a free TVNTip for you: If you're so concerned about this service becoming so popular you lose money why don't you just offer it yourself? $1 gets you 24 hour access to a feed of their flagship station. Hell, it wouldn't even be sourced over the air so the quality would be better and it wouldn't be affected by storms moving through the NYC area.

 

But no! Gotta get rid of those gat-danged gizmos that are moving forward while they want to stay stationary.

[News 9 Viewer 100]

A group of stuffy old media execs responding to technology in the only way they know how (crying and demanding it goes away)? Say it ain't so!

 

Hey. Hey FOX. Hey CBS. Here's a free TVNTip for you: If you're so concerned about this service becoming so popular you lose money why don't you just offer it yourself? $1 gets you 24 hour access to a feed of their flagship station. Hell, it wouldn't even be sourced over the air so the quality would be better and it wouldn't be affected by storms moving through the NYC area.

 

But no! Gotta get rid of those gat-danged gizmos that are moving forward while they want to stay stationary.

Post of the year candidate here.

[T.L. Hughes 760]

A group of stuffy old media execs responding to technology in the only way they know how (crying and demanding it goes away)? Say it ain't so!

 

Hey. Hey FOX. Hey CBS. Here's a free TVNTip for you: If you're so concerned about this service becoming so popular you lose money why don't you just offer it yourself? $1 gets you 24 hour access to a feed of their flagship station. Hell, it wouldn't even be sourced over the air so the quality would be better and it wouldn't be affected by storms moving through the NYC area.

 

But no! Gotta get rid of those gat-danged gizmos that are moving forward while they want to stay stationary.

The irony is some network are doing so, with Fox incidentally being the only one that has decided to go forward with it, for a launch this year... Granted it is part of the TV Everywhere initiative, so only pay TV subscribers will have access to the station feeds.

[CircleSeven 1945]

Look at this y'all.

 

TVNewsCheck states that Sen. John McCain is pushing a bill that if the big networks shift network programming towards cable, then the FCC can revoke their TV licenses. So he's basically giving the networks an ultimatum. And this comes after this craziness with Aereo, retransmitting OTA signals without compensating those stations. I don't think this bill will pass, though.

[speed053 35]

This is far worse! This is going to affect FOX 32 in Chicago and other Fox related stations too. Why do NewsCorp want to move FOX to cable instead of over-the-air methods? Why NewsCorp Why!

[24994J 5280]

This is far worse! This is going to affect FOX 32 in Chicago and other Fox related stations too. Why do NewsCorp want to move FOX to cable instead of over-the-air methods? Why NewsCorp Why!

Whoa there, cowboy...nothing's set in stone, if it even happens at all.

[channel2 874]

This is far worse! This is going to affect FOX 32 in Chicago and other Fox related stations too. Why do NewsCorp want to move FOX to cable instead of over-the-air methods? Why NewsCorp Why!

Money.

 

Pay TV brings in more money with exorbitant pricing on the providers' end and extraction of ever-increasing monetary compensation by the owners of the channels (though this is at least in part because of advertising revenues being lower).

 

This model is not good for consumers, and there is increasing rebellion against it, but the execs don't care about adapting.

[Mrtraveler01 737]

Money.

 

Pay TV brings in more money with exorbitant pricing on the providers' end and extraction of ever-increasing monetary compensation by the owners of the channels (though this is at least in part because of advertising revenues being lower).

 

This model is not good for consumers, and there is increasing rebellion against it, but the execs don't care about adapting.

I still think that if they were to entertain this option, the NFL might have a say in it since they make an effort to have as many games OTA as possible.