Streaming startup Aereo could be the big winner in high-stakes contract negotiations between CBS and Time Warner that have recently become very contentious.
CBS Corp., which is the parent company of CNET, has beenwith Time Warner for its flagship network under an extension to their previous agreement that expired June 30. In a sign that talks are taking on a sour tone, CBS started running ads in New York, Los Angeles, and Dallas on Thursday saying Time Warner Cable customers could lose access to its shows on Wednesday, which is when that extension expires.
If CBS pulls its programming, Time Warner Cable is prepared to recommend that its New York subscribers use Aereo to access local programming, a spokesperson for the cable giant told The New York Times on Sunday. Aereo, which streams over-the-air broadcasts on the Internet, is already operating in New York and is planning a launch in Dallas this year.
Aereo Chief Executive Officer Chet Kanojia said the scenario is nothing new for consumers.
"This conflict just further highlights the importance of having alternatives in the marketplace," Kanojia said in a statement. "It's also a great reminder that consumers have the right to watch over-the-air television using an antenna. Whether they use Aereo or some other type of antenna, it's their choice. That's the beauty of having alternatives."
CNET has also contacted CBS for comment and will update this report when we learn more.
In addition to offering an alternative programming delivery method, an endorsement of Aereo by Time Warner Cable could also strengthen the position of the CBS legal foe. Aereo, which is backed by IAC Chairman Barry Diller, uses antenna/DVR technology to let consumers watch live, local over-the-air television broadcasts on some Internet-connected devices, including the iPad and iPhone.
Aereo charges $8 per month for use of its cloud-based antenna/DVR technology and 20 hours of DVR storage. That service has provoked lawsuits from TV broadcast giants including ABC, CBS, Fox, NBC Universal, and Telemundo, which alleged last year that the service violates their copyrights and that Aereo must pay them retransmission fees.