Oops, U.S. supreme court kills cable TV industry

by Steve Blum • , ,

On the other hand, cable still has a fistful of dollars.

Well. That didn’t take long. Barely a fortnight after the U.S. supreme court ruled that Aereo “looks-like-cable-TV” so it must be treated like cable TV (in dissenting justice Antonin Scalia’s phrase), Aero has told a federal trial court judge, OK, we’re cable TV

The Supreme Court’s holding that Aereo is a cable system under the Copyright Act is significant because, as a cable system, Aereo is now entitled to the benefits of the copyright statutory license pursuant to the Copyright Act…Aereo is proceeding to file the necessary statements of account and royalty fees.

The U.S. broadcast networks that originally sued Aereo aren’t buying it, but it’ll be up to the judge – and maybe, eventually, the supreme court again – to sort it out. But if Aereo wins this new argument, the result could be total disruption for the cable industry.

Up until now, if you wanted the benefits of being a cable company, you had few practical choices other than to string wires from poles or launch billion dollar satellite constellations. If Scalia’s caustic logic holds, though, any garage-class start-up can start serving cable TV via the Internet. Technically, it’s still linear programming, but because subscribers access channels on demand, the de facto descent into an a la carte subscription model will be sudden and final.

With virtually no barriers to entry, the days of the $200 a month cable TV bundle will be over. You’ll still need a company with wires to sell you Internet access, though. Without a captive TV market to milk, those companies will either raise their prices or try to run their networks in decidedly non-neutral ways.

Fortunately for them, they’re not common carriers. Yet.