Fox Cable Threat: Will Fox Leave Cable Due To Online Live Streams?

Fox is now threatening to convert the cable network to a pay-TV-only channel if Internet startup Aereo Inc. continues to "steal" Fox's signal and live stream it to consumers.

Aereo Inc. is accused of stealing Fox's over-the-air signal and selling it to consumers without paying Fox for rights. However the idea of stealing is being called into question, anyone with an antenna can pick up a TV station's signals for free, although most satellite and cable companies pay stations and networks for the right to distribute their programming to subscribers. This practice creates billions of dollars of revenue industry wide, every year. However Aereo is creating a new practice.

Aereo won an appeal in court by stating they were not stealing from Fox and they do not have to pay rights because they are picking up the signals from antennas, "Aereo doesn't have to pay those fees because it relies on thousands of tiny antennas."

News Corp. Chief Operating Officer Chase Carey said that not being paid by Aereo deeply affects the economics of broadcast TV and are deeply considering converting Fox into a subscription model channel.

"This is not an ideal path we look to pursue, but we can't sit idly by and let an entity steal our signal," Carey said at the annual gathering of broadcasters, called NAB Show, in Las Vegas. "If we can't do a fair deal, we could take the whole network to a subscription model."

While most people get Fox through a pay TV provider anyway, millions of other Americans rely on the free signal coming over their own antennas. However if Fox is changed to be a pay-TV-model these free services will no longer be provided.

Aereo takes broadcast signals for free like TV-watchers with an atenna, however they use thousands of little antennas, then the company recodes them for Internet use and feeds that to subscribers' computers, tablets and smartphones. Plans start at $8 a month, which is much cheaper than a cable package, which is why this service has become such an issue for the economics of broadcast TV.