Telcos take video over the top.

Author:Brown, Rachel

Would it really he worth living in a world without television? I think the survivors would envy the dead.


--Krusty the Clown

It's nob easy be juggle a pregnant wife and a troubled child, hub somehow I manage be squeeze in eight hours of TV a day.

--Homer Simpson

Even those of us who'd answer "yes" to the first question and perhaps are not watching eight hours of TV a day still have to admit that TV plays a huge role in modern-day life. According to the Bureau of Labor Statistics, the average American watches more than five hours of TV a day, for a lifetime total of approximately nine years.

Nearly all-99%--of American households have one TV. Most households have two TVs; 65% have three or more. More than half of American households have subscriptions for pay TV. While these facts and statistics are somewhat interesting and informative, most would agree that they're not necessarily surprising. We all watch TV, and nearly half of us (49%) think we watch too much.

What is surprising is the shift in viewing habits and the technologies that are enabling these new trends.

It is a significant acknowledgement that the way people are watching television is changing and the model is quickly changing.


--Jeffrey Zucker, CNN Chief

For starters, increasing numbers of television viewers are prerecording their favorite shows using digital video recorders (DVRs). According to Nielsen, half of all American homes use a DVR for one-third of their weekly viewing. The devices let viewers watch their programs at a time that fits their schedule, as well as skip through commercials. In addition, TV viewing itself is no longer relegated to the big screen in the living room. People are watching TV on a slew of different mediums--computers, laptops, tablets, smartphones and even gaming consoles like Xboxes and PlayStations. The common denominator here is that these are all Internet-enabled devices, and the video and audio content is delivered "over the top" (OTT) of a broadband Internet connection.

Right now, most OTT content comes in the form of third-party providers like Netflix, Hulu and Amazon Instant Video. For those who want to use an actual television, they receive the signal via a set-top box. This new technology allows consumers to "cut the cord" or cancel their cable and satellite TV subscriptions.

Legal Issues Swirling Around OTT

Right now, it is against the law for television programming to be broadcast over the open Internet unless there are content contracts in place. Small telcos can legally broadcast over their closed IPTV networks as long as they've negotiated for content. Skitter, a converged media technology company, has also secured the rights to all of its content, said Mark Ellison, general counsel for the company.

But two relatively new entrants to the over-the-top arena--Aereo Inc. and FilmOn, both Internet TV providers--are arguing in court cases all over the country that they should be allowed to retransmit programming without paying for content. "It's legal to use an antenna to watch over-the-air TV" explained Virginia Lam Abrams, vice president of communications and government relations for Aereo. "This is rabbit-ears antennas brought into the 21st century."

Both Aereo and FilmOn operate antenna farms that pull TV signals from tens of thousands of micro antennas on the rooftops of data centers, where they then transcode the signal and stream it out over broadband networks. "Our service is about giving consumers access to antennas and DVRs in the cloud," Lam Abrams explained. "There are no wires or cables coming into the house. You go online and access the antenna and DVR via the Internet." In October 2013, more than 15 major broadcasters filed a petition with the U.S. Supreme Court to hear this issue, arguing that Aereo and companies like it are violating copyright laws. In January 2014, the high court agreed to review the case and will hear arguments this spring, with a ruling likely by this summer. Justice Samuel Alito recused himself from the case (no reason given),...

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