Aereo’s gauntlet has been cast

Should broadcasters disrupt their own business model for the sake of building something that fits better with tomorrow and tomorrow’s technology?

An insightful article in yesterday’s New York Times makes the chilling point that the disruptive nature of Aereo, Barry Diller’s broadcast antenna farm for digital users, “might lead to a larger breakdown in the bundling of content over time.” In other words, it’s a threat for broadcasters to take seriously.

And they have. A judge’s refusal to grant an injunction against Aereo this summer is being appealed, and broadcasters are confident they can win on grounds that it’s a copyright violation. Aereo argues that by providing antennas and DVRs to subscribers, they’re doing nothing more than a consumer could do for him or herself.

There are other players in the space, including those blessed by the National Association of Broadcasters, but Aereo gets the publicity, because of the clever way it skirts the status quo.

The real conundrum for broadcasters is this: should we pursue this disruption for ourselves instead of playing defense, defense, defense? The answer is tougher than you think. The Web is not a sustaining innovation for broadcasters anymore than it was for newspapers, as noted by Gordon Borrell two years ago:

Is the Internet a sustaining technology to their radio, yellow pages, TV companies and newspapers, or is it a disruptive technology? The key to how companies think about that is the key to success or failure, and the key to why some companies in the local Internet space are succeeding so well, 10 years later.

As Borrell noted, you can tell what companies believe by how they’re behaving, and a Johnny-one-note of defense says much. There are many who would like to see the Web function as a giant cable TV system, but that position looks a lot like wishful thinking, regardless of how much money is poured into it. The Web is a 3‑way communications medium, not one-way, and pulling broadcast signals into the mix doesn’t change that.

We’ve all heard the stories about how Blockbuster “should” have been Netflix, Kodak “should” have owned digital photography, and railroads “should” have been airlines. Here we have a case where the broadcast TV industry has an opportunity to cannibalize itself and create an advantage in the world of digital, unbundled TV, instead of sitting back and watching somebody else do it instead and at our expense.

The problem is that that would take thinking like the tech industry and not the media industry, and I’m afraid that’s just too much for us to handle right now. We have little energy for it, because managing threatened bottom lines is a full-time job all by itself.

Is this is a case of fighting to win the battle while losing the overall war? Only the cold reality of future history can answer that.