The Supreme Court delivered a major setback to online TV startup Aereo but a win for the media business, industry watchers said Wednesday.
David Bank, a media analyst at RBC Capital Markets, called the court’s ruling that the startup violated copyright law a win for consumers.
Launched in 2012, Aereo sought to revolutionize the TV industry. The service enabled customers in several cities to watch TV online via a remote antenna controlled over the web.
“Had Aereo been victorious, the risk would have been the broadcasters would have been forced to become cable channels to prevent Aereo and other technologies from monetizing its content without being paid,” Bank said.
“Today that risk is gone,” he said. “So the consumer wins because there’s still a viable broadcast system.”
Janney Montgomery Scott senior media and entertainment analyst Tony Wible described mixed outcomes of the decision.
Now that the TV system is sustained, peoples’ “cable bills will likely move higher” due in part to the rising price of sports content.
Overall though, he said the ruling produced a “status quo” for TV viewers and “that if Aereo had won, the programming on broadcast would have gotten worse.”
“Inevitably, I’ve always seen Aereo as a vampire that would have killed its host,” Wible added.
While BTIG media analyst Richard Greenfield said the decision “feels like a near-term loss for the consumer,” it “is clearly a big win for media.”
The service, which cost as little as $8 per month, had many in the cable and broadcasting industry up in arms by threatening lucrative network retransmission fees. These fees totaled roughly $3.3 billion last year, according to a report from SNL Kagan.
Following the ruling, broadcasters’ shares rose in midday trade. (Click here to track media stocks after the ruling.)
While Aereo simplified access to broadcast, Greenfield pointed out that consumers can still access it themselves.
“It means that nothing will change in terms of your access to broadcast TV,” Greenfield added. “Essentially you can lease an antenna but not in the cloud.”
“The toll bridge is reestablished,” said Smead.
As for pricing, Smead said TV’s still an affordable form of entertainment.
“You might not be able to afford to go to Disney World, but you can afford to have your kids to go to the Disney Channel,” he added.
Disclosure: CNBC’s parent company, NBCUniversal, is among the broadcasting and cable companies that opposed Aereo on copyright claims before the Supreme Court.