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Tv broadcasters are threatening to go nuclear in the battle over Barry Diller’s renegade startup, Aereo.
News Corp. Chief Operating Officer Chase Carey dropped a bombshell on the TV industry yesterday when he revealed that the company might convert its Fox broadcast network into a cable channel to prevent Aereo from pirating its signal.
“This is not an ideal path we look to pursue, but we can’t sit idly by and let an entity steal our signal,” Carey said at an annual gathering of broadcasters in Las Vegas. (News Corp. also owns The Post.)
The company is considering the pay-TV transition after an appeals court last week allowed Aereo to continue streaming programming from Fox and other broadcasters through its online service without paying for shows.
If Fox forges ahead, industry observers said the other major broadcasters — CBS, NBC and ABC — would likely mull a similar move.
Indeed, Haim Saban, the chairman of Spanish language broadcaster Univision, told The Hollywood Reporter that his company was also considering converting to pay TV.
Aereo uses antenna farms to snatch over-the-air broadcast signals and stream them via the Internet to tablets and other mobile devices in exchange for a monthly fee.
Although viewers can watch broadcast TV for free with an antenna, most people get it as part of a cable package. Broadcasters charge cable and satellite companies “retransmission fees” for the right to distribute their programming to subscribers.
Aereo threatens to cut out the cable middleman — and billions in retrans fees in the process.
In addition to the broadcast-to-cable conversion, Fox is also looking to pursue more favorable rulings in other district courts.
“We believe Aereo is pirating our broadcast signal,” Carey said in a statement yesterday. “We will continue to aggressively pursue our rights in the courts, as well as pursue all relevant political avenues, and we believe we will prevail.”
Fox, alongside partners PBS, WNET and Tribune, has sued Aereo. CBS, NBC and ABC are part of a separate suit against the company; those networks’ lawsuit is pressing similar copyright claims.
“It’s disappointing to hear that Fox believes that consumers should not be permitted to use an antenna to access free-to-air broadcast television,” Aereo spokeswoman Virginia Lam responded in a statement yesterday.
Aereo has a small subscriber base in New York, where it promotes its $8-a-month service, but it is rolling out in several big cities, including Boston, Philadelphia and Dallas.
If Fox makes good on its threat, there are pros and cons. It would gain additional national advertising revenue but give up local ads as well as the cost of local programming.
Only those households without cable would be deprived of Fox in a switch.
One headache would be how to deal with national distribution of certain sports events such as the NFL, which have restrictions on local markets.