Skitter, Aereo, and the Return of Basic Cable

Mari Silbey —  April 17, 2012 — 2 Comments

Skitter and Aereo

They sound like bad comic book character names, but Skitter and Aereo are two of the latest companies to jump into the video service game. Instead of trying to offer premium content, however, the two start-ups are going old school. They’re both selling traditional broadcast content over the Internet and optionally combining it with a DVR. (Skitter’s DVR service hasn’t launched yet, but is in the works.) On the plus side, you get decent-quality transmission of the prime-time networks, access to TV across a bunch of connected devices, and all the benefits of being able to pause live television, fast forward through commercials, etc. On the minus side, you have to pay a chunk of change every month (around $12) for content that’s supposed to be free.

Whether you like the idea behind Skitter and Aereo or not, the fact that they exist (for now) is an interesting commentary on the state of television. Both companies are offering a very basic content package with a few extra goodies. It reminds of my household circa 2008 when we steadfastly held on to analog cable and combined it with a subscription-free ReplayTV DVR. Most of our TV watching was still focused on the major networks, but the ability to get ESPN and decent reception had us paying a monthly fee to Comcast. Fast forward to today and we pay a much larger monthly bill to Verizon for TV. Granted that bill includes HD channels, a FiOS DVR, VoD, and a much wider selection of linear content, but it’s still tough to stomach when the invoice clears are mailbox every four weeks.

And so Skitter and Aereo enter the scene.

It’s difficult to get anything resembling a basic package from pay-TV providers today. Cable companies have very successfully marginalized their lower service tiers in favor of high-priced bundles, and as a result, there’s now plenty of room at the lower end of the market. Skitter and Aereo are taking advantage of this gap, but I’m betting others will soon join them. After all, the big reason Netflix has been successful is because it’s cheap, and in a lot of ways, broadcast content already trumps what Netflix can provide.

If you have the money, cable TV service is worth the cash outlay every month. In my personal opinion, cable has some of the best shows on television right now, and for that reason alone, I’m willing to pay my FiOS bill. But there should be more options for people who can’t or don’t want to spend so much money on television. The recent launches of Skitter and Aereo prove that other people think so too. And that some deep-pocketed folks see a chance to make money in a segment of the market cable has abandoned.

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2 responses to Skitter, Aereo, and the Return of Basic Cable

  1. Assuming these things aren’t shut down as illegal (a big IF), I think they’re going to get a certain amount of traction. Read anything about the spiraling cost of pay TV nowadays, say like this:

    http://www.broadbandconvergent.com/cable-industry-2/cable-rates-continue-rise-sustainable-mainstream-viewers?goback=.gde_1801289_member_106913928

    and you’ll see that pay TV is pricing itself out of the market with spiraling costs and the inability to get a la carte programming. Not that its all Comcast’s fault of course. Its even more the fault of ABC, ESPN, the costs of sports programming, etc. But nevertheless you can imagine that over time there will be increasing numbers of people looking for alternatives.

    I’m the first to poo-poo most of the self-serving “cord cutters” crap served up by sites like Giga Om (XX people left cable! Run for the hills! Oh wait, most of them signed up for DirecTV…) but in the long run anybody can read the writing on the wall…

  2. “Assuming these things aren’t shut down as illegal (a big IF)…”

    According to reports, Skitter has negotiated a re-trans fee with the local TV stations.

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