Fox baulks at streaming TV, threatens move to cable

Executives of Fox and Univision have raised the prospect of moving their programming off the broadcast airwaves and exclusively on to cable in a response to Aereo, a US streaming TV service.

While viewed largely as sabre-rattling, the idea that the networks could be converted into cable channels gained attention in the television world as such a move would have wide-reaching implications for viewers and station owners.

Chase Carey, the chief operating officer of Fox's parent, News Corp, broached the possibility when he spoke at a broadcasters' conference on Monday. Later, Haim Saban, the chairman of Univision, lined up with Fox, calling Aereo a pirate and saying, "To serve our community, we need to protect our product and revenue streams and therefore we, too, are considering all of our options — including converting to pay TV."

One week ago, a US federal appeals court rejected broadcasters' attempts to shut down Aereo. The service uses an array of tiny antennas to pick up free signals from stations in New York, including two owned by News Corp, and streams the stations to paying subscribers.

Aereo is promoted as an alternative to cable, with only a fraction of the channels but at a fraction of the cost, and it allows easy viewing of live TV on phones and tablets.

Aereo says its service is legal because each viewer has an individually assigned antenna, not unlike viewers with rabbit ears hooked up to their TVs. But owners of local stations disagree. Aereo is backed by Barry Diller, who founded Fox with Rupert Murdoch nearly 30 years ago.

"Aereo is stealing our signal," Mr Carey said on Monday, adding that stations would keep up their legal battle. He said that although News Corp is committed to the broadcasting business model for now, it could abandon the airwaves if Aereo remains intact.

The comments seemed aimed at lawmakers who might side with broadcasters in responding to the perceived threat from Aereo. The threat is specifically aimed at retransmission fees that are a crucial second source of revenue for stations as ad losses mount.

The appeals court ruling in favour of Aereo could lead cable and satellite operators to set up their own antenna arrays and use them to avoid retransmission fees, or at least threaten to do so.

Reacting to Mr Carey's comments, Aereo said in a statement, "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 noted that Congress handed over valuable public airwaves to TV "with the promise that they would broadcast in the public interest and convenience, and that they would remain free-to-air."