14 December 2012

Aereo Adds First Cable Channel - Bloomberg TV

Aereo announced today that it has added its first non-broadcast television service, Bloomberg TV, to its multichannel service. This marks an evolution in the Aereo service and a step towards, possibly, becoming a larger competitor to a traditional multichannel subscription from a cable, DBS or telco provider.
For Bloomberg, the attraction of affiliating with Aereo is clear. In a traditional multichannel package, its placement is typically less favorable than Comcast/NBCU's CNBC, the category leader, and, sometimes less favorable than the third entrant, Fox Business. Bloomberg is not only the only business news service on this platform, it is the only 24-hour news service. Bloomberg's carriage vis a vis CNBC is the subject of a continuing dispute with Comcast. New York is Aereo's only current TV market and Bloomberg's most important one. While Aereo likely has a modest number of subscribers, you can be certain that its choices are watched closely by the incumbents with which it competes.
The risk to Bloomberg in stepping out with Aereo is probably smaller than it is for most other cable programmers:

  • Bloomberg is already streamed free on the web at http://www.bloomberg.com/tv/; the service has been available over-the-top for a long time. Few other cable services are. 
  • Bloomberg is sold a la carte by at least one distributor, Dish Network. Few other cable services are.
  • Cable programming represents a very small portion of Bloomberg Media. 85% of its revenue comes from the rental of Bloomberg information "terminals" to financial professionals. The company has annual revenues of about $8 billion. Bloomberg has only one US TV programming service; all the major US programmers operate multiple networks. SNL Kagan estimates Bloomberg TV's 2012  license fee revenue at less than $60 million. The channel draws several times that in advertising, far from the more typical 50/50 license fee/advertising revenue split for a cable network.
  • Most importantly, Bloomberg is not involved in broadcast television (like Disney, Comcast/NBCU, CBS, Fox or Univision), so it is not currently being sued by Aereo. 
The biggest question now is whether any of the more typical cable programmers will follow Bloomberg onto Aereo.

some prior posts about Aereo:
Dog Bites Man - Broadcasters Sue Aereo (2 Mar 2012)
Aereo (Beta) Arrives in NYC - Broadcasters Likely Peeved (15 Feb 2012)

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