Fitch: Aereo Suit Could Reshape TV

According to Fitch Ratings, the outcome of the legal battle between Aereo and U.S. broadcasters could potentially reshape the economic model of over-the-air broadcast TV.The core of the litigation turns on whether Aereo's service constitutes a public or private performance of copyrighted content. Media companies claim that Aereo's service violates copyright law by reformatting and retransmitting broadcaster TV signals without consent or compensation. Media companies have sought an injunction to prevent Aereo from operating while the litigation is pending. However, recent court decisions have denied this request. This provides Aereo the flexibility to continue operating and expanding its business. To that end, Aero has announced plans to expand its service to 22 cities by the end of 2013.Fitch believes the threat to broadcasters does not lie solely with Aereo itself, but should Aereo ultimately prevail, multichannel video programming distributors (MPVDs) will likely duplicate this type of service and avoid paying retransmission consent fees to broadcasters.