As many of you know, I do a lot of work in the area of disruptive technologies and business models. So I thought I'd share a few thoughts on my experience with Aereo, a new service that allows subscribers to view live broadcast television, over the Internet, on their TV or any mobile device, using a remote antenna, without subscribing to cable. Aereo's service is available in New York and Boston, with plans to roll out additional U.S. cities this year. The service costs $8 per month, and subscribers can try it for free for a month. Broadcast shows can also be recorded and viewed later using Aereo's DVR service.
Having tested Aereo in Boston for about two weeks, I would give the service a solid "B". I was able to set it up easily on my laptop, iPhone, and iPad (the device "authorization" devices works similarly to iTunes). Within about five minutes, I was watching the French Open while my wife was driving along the Mass. Turnpike. When one launches the service or app, the UI is excellent: the viewing guide is clean, easy to read, and responsive; the DVR takes one touch to record.
Picture quality is very dependent on the quality of the connection. On a strong Wi-Fi or broadband signal, the image is crisp and looks great even in full screen format. On an LTE connection, picture quality is also excellent. On AT&T 4G, it is a bit fuzzy but viewable. In situations where I was "mobile", there were frequent screen freezes, which is probably their version of buffering. For example, on a cab ride from Logan Airport to my house, using the AT&T network (which curiously read "4G" the whole way rather than LTE), the screen froze four times in 25 minutes. I also experienced frequent crashes on my iPad, although admittedly it is a first generation iPad.
Others who I have talked to say Aereo works and looks great on a conventional TV, when connected, for example through a Roku box or Apple TV.
Note that Aereo viewers will have to be mindful of their mobile network usage. According to Aereo, a half-hour of viewing over a mobile network uses about 100 MB of data, using the "low" video setting.
The key question is, of course, whether Aereo is a useful service. On that front, I am not 100% convinced. The service is ONLY available locally. So if you have the service in Boston, you can only view Aereo in Boston - not even in other Aereo markets that have launched. So Aereo is more of a "cut the cord", "multi-device" appeal. It is distinctly not "TV Everywhere". Aereo would be much more appealing if the service outside one's home area, which, I understand is on the roadmap.
By contrast, as a Comcast subscriber, I can view On Demand content, on mobile devices, anywhere, as well as content from other content providers who have agreements streaming agreements with Comcast (ESPN, ABC & HBO, for example).
Aereo is clearly aiming at the price sensitive segment of the market, and the steadily growing number of "cord cutters". For those with an Apple TV or Roku device, and a Netflix or Amazon Prime subscription, Aereo helps fill a pretty big gap, namely broadcast TV programming, whose share of total TV viewing is 30-40% and shrinking but still features a lot of popular shows and live sports. Combine Aereo with an OTT service such as Netflix, Amazon Prime, or Hulu, and you have a pretty compelling library at about ¼ the cost of cable.
Aereo is to be praised for its creative approach, and the service works as advertised. It is an important development in the evolution of content distribution models. And the networks have taken notice, given the lawsuits currently underway, and the threats by CBS and Fox to move to cable.
However, I maintain my view is that it will take a long time before the current TV content distribution model is significantly disrupted. There will be a lot of nibbling around the edges, but even the cable companies are having a hard time trying to find a profitable way to unbundle or offer some form of alternative pricing, given media company concentration in the U.S. Any "alternative" service today still has major compromises, either in breadth of content, the user experience, or geographic availability.