Article

Streaming Revolution

Changing Viewer Expectations Mean Big Changes for the TV Business

By Devin Felix

May 8, 2014

Aereo ceased operations in Utah and Colorado in February after U.S. District Court Judge Dale A. Kimball ruled against the company in a case brought against it by local TV stations KUTV Channel 2 and KSTU Fox 13. The stations argued that Aereo violates copyright law because it doesn’t pay the same fees paid by cable and satellite companies for the right to rebroadcast their content. Aereo argues that it doesn’t infringe on copyright because it’s not actually rebroadcasting anything. Instead, Lam says, the company provides a service that allows consumers to access and use a remotely located antenna, just as they would for free with an antenna in their own home.

Aereo’s argument held up earlier in court in similar suits brought against it in Boston and New York City. The stations in New York who lost the case appealed, and the U.S. Supreme Court agreed to hear the case. Oral arguments took place April 22 and a ruling is expected sometime in the next few months. Lam says if the court rules in favor of Aereo, the company will restart its Utah operations and continue opening in new markets across the country. It has launched in 13 markets so far and is currently operational in all but Utah and Colorado.

Regardless of the outcome of the Supreme Court case, the trend toward watching video over the internet seems certain to continue, across the country and particularly in tech-savvy Utah. Ashdown says the state has a higher-than-average rate of home broadband internet penetration, which also means a higher portion of the state subscribes to Netflix.

Lam says high level of internet connectedness was a major reason Aereo chose Utah as one of its first markets, as well as a high number of video-capable mobile devices. She declined to give precise numbers on how many Utahns signed up for Aereo during the six months it was in operation, but the initial response was “overwhelming,” she says. “It made a lot of sense to come to Utah.”  

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