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CBS joins Fox in threatening cable-only broadcasts if Aereo continues to expand

 Leslie Moonves

CBS’s boss is threatening to take the network off the air and turn it into an exclusive cable channel if court battles prove unsuccessful in stopping Internet upstart Aereo from operating and expanding, echoing the same sentiments made by Fox last month.

Leslie Moonves, chief executive officer at CBS, spoke at the Milken Institute Global Conference in Beverly Hills, telling the audience that his company had already approached cable operators in New York about Aereo rebroadcasting CBS shows like NCIS and The Big Bang Theory without prior consent.

Aereo has drawn the ire of broadcasters because it takes free over-the-air broadcasts from networks and makes them available to subscribers on computers, iOS and Android devices over the Internet. The contentious debate over Aereo’s business is that it makes money from subscribers, but doesn’t pay anything to the networks to rebroadcast the content. In addition, Aereo lets viewers record shows and fast-forward through commercials, leading to another dispute related to advertising revenues.

CBS’s threat to move to cable-only broadcast would strip Aereo of the ability to rebroadcast anything it airs, but also stop TV viewers from accessing the channel using digital antennas. Aereo recently won a court decision at the U.S. Court of Appeals that allowed it to continue operating and paving the way for an aggressive expansion expected to hit 22 markets by the end of the year. Boston will be the first outside of New York when it goes live on May 15. CBS already unofficially threatened a lawsuit if the Boston rollout goes as planned.

“It’s illegal,” said Moonves, referring to Aereo’s business model. “They’re taking our signal and charging people for it.”

His vehement opposition to Aereo follows a similar threat made by News Corp., the parent company of Fox, last month. Chief operating officer Chase Carey had toed the same line, accusing Aereo of “stealing our signal” and that “we will pursue business solutions” should legal avenues yield no results. He later posited that the network could eventually be turned into a subscription-based service.

Moonves went even further, predicting that networks would begin pulling free content from Hulu and turning that platform into a business more like Netflix, where all content would be accessible only by subscribers. He reiterated previous remarks affirming that CBS wasn’t interested in acquiring Hulu, which is jointly owned by News Corp., Disney and Comcast, among others.

Aereo hasn’t commented on the latest threat, but it looks like this will be a tough fight between the long-standing networks who have owned the TV business and an upstart changing the content delivery method.

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