Netflix, Inc. To Raise Fees As Aereo Fights For It’s Life In Washington [Comcast Corporation]

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April 22, 2014 12:09pm NYSE:IYC NYSE:RXI

netflixIt’s a big week for the future of “television.” Popular TV streaming company, Aereo, is arguing for its life in front of the Supreme Court today and yesterday Netflix, Inc.(NASDAQ:NFLX) announced it would increase its subscription price by


one or two dollars for new subscribers to help cover the fees they are paying Comcast Corporation(NASDAQ:CMCSA) for the right to higher streaming speeds.

In short the war over how you receive and consume content is heating up. Technology that didn’t exist ten or even two years ago is now center stage and “old media” giants don’t like them playing on their turf.

What’s at stake?

What many forget is that the broadcast networks (like NBC, the one Comcast owns, for example) were essentially given life by the U.S. government in exchange for programming that benefited the public. As the medium evolved networks figured out how to make massive sums of money from the gift given to them. Powerful lobbyists were able to get laws tweaked to give the networks latitude to make even more cash.

One of the ways they brought in money was through retransmission fees. Cable companies who were not given government airwaves wanted to be able to provide local programming to customers and so they paid the broadcasters for the right to transmit their content. The consumer shoulders the burden of those fees in their monthly cable or satellite bill. Those who don’t want to pay such companies still have the right to buy an antenna and get those free government airwaves beamed to their televisions directly.

Then came Aereo. They decided to take the thousands of antennae and connect them to the internet. Consumers are able to tap into an antenna and get that free signal on their computer or mobile device and Aereo gets paid by consumers for the right to do it.

You can see the full “Breakout” segment below:


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