# Will Fox Shut Down Their OTA Network Over Hopper And Aereo?



## SayWhat? (Jun 7, 2009)

Apparently, it's being discussed according to several news items.



> LAS VEGAS (Reuters) - Broadcast TV network Fox could become a subscription service that customers would have to pay for if the courts are not able to protect Fox's business from the startup Aereo, News Corp Chief Operating Officer Chase Carey said on Monday.
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> Carey's comments come a week after a U.S. appeals court rejected a petition by the major broadcasters to stop the online service Aereo, which offers a cut-rate TV subscription for consumers by capturing broadcast signals over thousands of antennas at one time.
> 
> "If we can't have our rights properly protected through those legal and political avenues, we will pursue business solutions. One such business solution would be to take the network and turn it into a subscription service," said Carey,


http://www.chicagotribune.com/business/sns-rt-us-newscorp-foxbre9370vv-20130408,0,6194910.story

Other articles mention that another (as yet unnamed) major OTA network may be considering the same move.


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## lparsons21 (Mar 4, 2006)

At this point I think they are chest beating, but at some point in time the broadcast mode may very well disappear. And for most people that would probably be OK, but there would be many in the more rural parts of the country that might not be so thrilled.


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## SayWhat? (Jun 7, 2009)

Something just crossed my mind. They mention 'subscription' without really saying shut OTA down. With the digital OTA broadcasts, could they be considering scrambling the broadcasts and selling/leasing/renting a form of set top box to decode the signals?


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## sigma1914 (Sep 5, 2006)

I don't think it'll happen for 1 big reason ... NFL games.


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## Gloria_Chavez (Aug 11, 2008)

If Fox Broadcasting were to do so, the government would immediately take ownership of the national radiospectrum which Fox currently exploits.


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## scooper (Apr 22, 2002)

The broadcasters are REQUIRED to leave at least one stream unencrypted (note the lack of HD/SD distinction). There is no reason they could leave a 2MBPS audio/video stream unencrypted then encrypt everything else that goes out the antenna.


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## Hoosier205 (Sep 3, 2007)

Gloria_Chavez;3207258 said:


> If Fox Broadcasting were to do so, the government would immediately take ownership of the national radiospectrum which Fox currently exploits.


Exploits...haha


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## Stewart Vernon (Jan 7, 2005)

scooper said:


> The broadcasters are REQUIRED to leave at least one stream unencrypted (note the lack of HD/SD distinction). There is no reason they could leave a 2MBPS audio/video stream unencrypted then encrypt everything else that goes out the antenna.


Yeah... so many people think digital = HD... but they could easily decide to encrypt the higher-quality HD signal OTA and then leave a low-bandwidth SD signal unencrypted.

They also could just encrypt primetime or certain programming in this manner.

Or they could just stop putting their good stuff on FOX and moving much of it to FX. That would be a good way to test the waters... leave the NFL OTA on FOX, but move primetime lineups to FX and ask for a rate increase on FX Network at the next negotiation.


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## SayWhat? (Jun 7, 2009)

scooper said:


> There is no reason they *could* leave a 2MBPS audio/video stream unencrypted then encrypt everything else that goes out the antenna.


I think you dropped these *n't*. 


Stewart Vernon said:


> They also could just encrypt primetime or certain programming in this manner.


See, that's what I was thinking, encrypt Primetime and the sports programming. Leave a subchannel open with reruns.


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## James Long (Apr 17, 2003)

scooper said:


> The broadcasters are REQUIRED to leave at least one stream unencrypted (note the lack of HD/SD distinction).


Basically Fox would be shutting down their broadcast network and losing all of their affiliates. It would be a lot cheaper to transmit a single national feed or regional time zone feeds to cable and satellite than install and maintain any home subscription scrambling service.


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## djlong (Jul 8, 2002)

Those over the air stations become almost worthless - and all that borrowed money that paid for buying up all those stations comes due with an even more severely reduced revenue stream.

How many lawsuits of non-Fox-owned stations would be screaming "We borrowed money to buy a Fox station and now they're taking all the programming away - destroying the value of our station"

Remember - those retransmission fees from cable, DTV and E* are the fees that Fox (and other OTA networks) get for THE FREE SIGNAL THEY ARE TRANSMITTING OVER THE AIR.


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## mkdtv21 (May 27, 2007)

I'm not sure if there is another thread for this but I couldn't find one.

http://www.latimes.com/entertainmen...t-ct-fox-cable-aereo-20130408,0,4681713.story


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## charlie460 (Sep 12, 2009)

This will never happen. They'll lose their NFL contract and I would imagine be breaking a lo of contracts with local affiliates.


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## myselfalso (Jan 26, 2006)

charlie460 said:


> This will never happen. They'll lose their NFL contract and I would imagine be breaking a lo of contracts with local affiliates.


I don't see why they would break a lot of contracts. I honestly can't see this happening for at least 10 years, so I would think they could negotiate contracts that would position themselves to make the move. I'm sure a lot of cash would be involved...but it's not like News Corp. doesn't have the money.

As for the NFL, the renewed deal starts in 2014 and ends in 2022. There's no reason why A) the NFL could want to take Sunday afternoon games to cable or B) FOX could be outbid. It also may not matter, depending on how the TV Everywhere concept goes. If I can watch NFL games via the Internet on my TV (or computer, phone, etc.), and FOX is still making money off the broadcast, why do they need it OTA? Presumably, most people would have the Internet, and most people would have smart TVs, as you'd think most people would have replaced their current TVs by 2022.

It's a lot of "what if's," and while I think it's unlikely to happen even in ten years time, I think it ultimately will.


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## gov (Jan 11, 2013)

Would there be an element in the government tempted to decree a basic tier of service from cable or satellite providers to be FREE ??


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## anex80 (Jul 29, 2005)

Am I missing something here? It looks like Aereo is only available in metro NYC area. Why would Fox be all up-in-arms over a startup in a small part of the country? Are there plans for Aereo to extend their reach?


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## gov (Jan 11, 2013)

The Aereo business plan (which is what is triggering the lawsuits) keeps prevailing in court cases.

That's the equivalent of a shot across the bow for Fox's business plan. Fox has a responsibility to their shareholders to protect them if the courts neuter their ability to make a profit.


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## Beerstalker (Feb 9, 2009)

anex80 said:


> Am I missing something here? It looks like Aereo is only available in metro NYC area. Why would Fox be all up-in-arms over a startup in a small part of the country? Are there plans for Aereo to extend their reach?


Yes Aereo is planning on expanding into many other major cities.

http://techcrunch.com/2013/01/08/ae...g-its-streaming-tv-service-to-22-new-markets/

My guess is if they can keep winning these lawsuits they will eventually end up setting up service in every major US market, and maybe even start thinking about minor ones.


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## James Long (Apr 17, 2003)

Once the concept clears the court hurdles other companies will likely follow. There is a lot of trust in the company that they are following the rules. I believe Aereo uses IP address filitering as well as zip codes on payment cards to attempt to make sure that their customers are within their subscription area. But who is auditing them?

I suspect that Fox and the other broadcasters will set up illegal accounts just to prove it can be done. Personally I doubt the validity of their "one antenna serves one subscriber" claim. But if they prevail the decision may affect how channels are carried on DirecTV and DISH Network.


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## Gloria_Chavez (Aug 11, 2008)

James Long said:


> I suspect that Fox and the other broadcasters will set up illegal accounts just to prove it can be done. Personally I doubt the validity of their "one antenna serves one subscriber" claim. But if they prevail the decision may affect how channels are carried on DirecTV and DISH Network.


And when Fox informs Aereo of an unlawful account, I'm certain that Aereo will disable said account, the same way that Youtube takes down copyrighted content when Fox informs Google of its existence.


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## KyL416 (Nov 11, 2005)

James Long said:


> Personally I doubt the validity of their "one antenna serves one subscriber" claim.


It's not true at all, I was able to watch multiple channels at the same time just by grabbing the urls in the media cache file on my iOS device. All of them point to the same stream urls with an expiring auth code as the only thing unique to each user. The "live DVR buffer" is something built into the open source Strobe Media Player they use and works with any stream that uses http dynamic streaming. The "waiting for antenna" message when you first tune to a channel is just a fake javascript delay. Anyone with a packet sniffer and knowledge of streaming technology can figure it out, but the real question is will a judge understand all the technical terms if they're brought up in court or will it just go over their head.

And that's not even counting the physics involved. Good luck getting reliable reception of VHF stations with one of those tiny antennas alone, or explaining how they can pick up VHF-lo channels like WACP (4) and WPVI (6) with one of those when they launch in Philly. NYC is one of the few markets where most of the locals come from one general direction, other markets have multiple tower farms and even have channels coming from opposite directions. Are they going to claim that not only these microantennas can receive the entire DTV band with no breakup but they're omnidirectional too? If it were true they would make way more money selling the antennas than the legal bills they now have fighting the stations.

If they do prevail, they'll likely have to be treated as a CATV service and abide by their rules like must carry and retransmission consent. And since they now expanded beyond OTA to include Bloomberg TV with plans to add other channels, they might have to follow EAS rules too.

They use browser based location services for PCs and GPS for mobile devices, both of which are easy to spoof, the IP address doesn't matter. I just did the free trial, so they might also take the billing address into consideration for subscribers.

Fox's and other broadcaster's problem is that (a) not even the network and stations have streaming and on demand rights to all their programming (i.e. Verizon has exclusive mobile rights to the NFL nationally, MLB is very restrictive with their rights, not even the stations are allowed to stream the footage online during newscasts and until their recent renewal even ESPN had to blur the screen anytime MLB highlights appeared on Watch ESPN) and (b) they're using the "each user has their own antenna" excuse to get around the retransmission consent, when it's clearly false.

There is another streaming startup called Syncback. However in that case they are working with the broadcasters directly, getting permission before launching any channels, and blackout anything the broadcaster doesn't have streaming rights too. So it's limited to local news and select syndicated programming.


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## DawgLink (Nov 5, 2006)

Anything that massively disrupts the industry is good for us

The VCR was going to bankrupt the entertainment industry
The DVR was going to force massive cuts at entertainment corporations

Now, Aereo is lighting a fire under these companies butts and I love it

How hilarious is it to have these guys talk about fairness?


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## theedger (Mar 31, 2008)

If the stream is 100% of the 'air' feed, what's the problem? I thought advertisers like people watching their commercials? I thought TV stations liked people watching their programming. More eyes...higher ratings...more revenue. If these Networks/TV stations don't get on board, they'll be left behind. Consumption of media is changing.


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## joshjr (Aug 2, 2008)

theedger said:


> If the stream is 100% of the 'air' feed, what's the problem? I thought advertisers like people watching their commercials? I thought TV stations liked people watching their programming. More eyes...higher ratings...more revenue. If these Networks/TV stations don't get on board, they'll be left behind. Consumption of media is changing.


OTA does not reach everyone. I think someone posted a good point earlier when stating if Philly gets the NY stations OTA then we know something is up.


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## SayWhat? (Jun 7, 2009)

Word is CBS may be the other network making threats.


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## dpeters11 (May 30, 2007)

Dwight Silverman from the Houston Chronicle has gotten a response from the NFL that they support Fox in opposition.

http://blog.chron.com/techblog/2013/04/cbs-fox-threaten-to-convert-their-networks-to-pay-tv/


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## lparsons21 (Mar 4, 2006)

You present a worst case scenario. OTA could certainly go away I suppose, but then there is no 'requirement' that 'local' channels be offered at all unless they change the rules.

Most of the broadcast networks could just move their programming to existing 'cable' type channels they own. Of course they wouldn't do it that way, they'd just add new 'cable' type channels and try to peddle them.

Could make for some interesting negotiations.


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## jsk (Dec 27, 2006)

If Aero clears the legal hurdles, cable & satellite providers could incorporate this technology in their receivers and not have to pay retrans fees. However, most likely, the TV stations will probably lobby congress to get the laws changed to close this loophole.

If this loophole is closed, I wonder if that will restrict E*'s ability to use Sling technology to retransmit OTA TV stations (which currently works using at least the 722k).


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