SIGNALS

Aereo, as you'll recall, collected over-the-air TV signals and distributed them to its subscribers via the Internet. With any kind of web access such as a browser, phone, tablet or connected TV, you could access a cloud DVR and watch content anywhere. But, as you may also recall, that business model was judged to be illegal. Aereo had its plug pulled. But now, TiVo is working to revive an Aereo-type model.

The problem was that Aereo did not pay broadcasters for their programming. As a workaround, whenever you logged on, Aereo assigned a small antenna to you which pulled in the broadcast. Aereo reasoned that operation with its assigned antenna was no different from that of a typical OTA user. However, the U.S. Supreme Court didn't see it that way, and ruled that Aereo was violating broadcasters' copyrights. Soon after the ruling, Aereo shut down, and then filed for bankruptcy. Fini Aereo.

Now, TiVo has disclosed that it is developing "a kind of Aereo model, done legally and better." It's not clear how that will happen, but TiVo's impetus is very clear. There is a sizable, and growing, number (over 12 million) of cord-cutters who are looking for alternatives to cable and satellite. While they could certainly hoist their own antennas, many of them are looking for something a little more sophisticated. That, of course, is what Aereo hoped to provide.

TiVo already has TiVo Stream that lets you access locally-stored DVR content across the internet. Plus, TiVo already has its Roamio system; this is a four-tuner DVR that captures OTA broadcasting, and integrates it with content from the likes of Netflix, Amazon, and Hulu. The box is cheap ($50) but there's a $15/month fee to use it. It's not hard to imagine a Roamio-type product that puts the DVR in the cloud using your own local antenna. But the holy grail would obviate the need for your own antenna. And that gets us back to the Supreme Court.

TiVo was front and center at Aereo's bankruptcy auction in March and shelled out $1 million for Aereo's trademarks, domain name, and database of customers (it did not acquire Aereo's patents and hardware). The customer list is probably worth a million bucks. But the interesting question is how TiVo can design a system that will avoid Aereo's fate. For starters, TiVo could simply pay broadcasters for their content. Or, perhaps TiVo's legal eagles are dreaming up another, more innovative workaround.

No matter how they accomplish it, TiVo will provide yet another option for cord-cutters. Most likely, it will economically bundle a cloud DVR, OTA TV channels, and broadband access. In keeping with TiVo tradition, it will probably go for a low purchase price, and a reasonable monthly fee. But can they pay for OTA content and still hit a price low enough to entice cord-cutters (ie. penny-pinchers), a price that is somehow lower than a basic cable TV package? Or will they find a way to avoid retransmission fees, thus keeping their prices even lower? We won't know until TiVo unveils its plans in July whether or not a trip to the Supreme Court is in their future.