ott providers hit turbulence with local broadcast stations
Local broadcast content from stations like NBC, ABC, Fox, and CBS is a critical content component of any TV product. Realizing this, there are a few emerging OTT providers who are attempting to bundle OTT video from sources like Netflix and Hulu with this local broadcast content. Companies like Skitter TV and Aereo are trying to stream these channels over the Internet, creating a bundled package of sorts. But increasingly, local broadcast stations are objecting, and bringing this streaming approach into question.
Take for example Skitter TV, who streams local broadcast channels to external OTT set-top-boxes like the Roku box. They recently announced a deployment of this type in Oregon, only to have the broadcasters in that market object, and pull their signal http://www.multichannel.com/article/484379-Portland_Broadcast_Affiliates_Pull_Signals_From_Skitter_TV.php from Skitter’s offer. That’s left Skitter virtually without a product. The broadcasters are objecting to the streaming approach, saying their retransmission agreements do not allow this type of content distribution.
Aereo is another OTT provider that streams local broadcast stations over the Internet. Despite its start-up phase and limited to no reach, it didn’t take long for the broadcasters to sue Aereo http://www.mediapost.com/publications/article/169292/broadcasters-sue-aereo-over-signal.html and try to dismantle their service. Aereo is currently in a limited only trial in New York.
Both Aereo and Skitter TV charge for this service, ranging from $10 to $15 per month to receive this local content. Aereo claims they do not need to pay any retransmission fees to the local stations because their feeds originate on tiny antennas, no different than the antennas at subscriber’s homes (albeit much smaller). The broadcasters disagree, hence the lawsuit.
Skitter TV says their service provider partners pay retransmission fees already. But the broadcasters argue those retransmission agreements do not entitle streaming over the Internet.
There is a lot at stake with these deliberations. For now, it appears as if delivering local broadcast channels through OTT is not a viable option.