Israeli firm ready to replace US rebroadcaster Aereo

The US Supreme Court essentially put American company out of business; Vbox ready to take over with legal alternative

A VBox gateway (Photo credit: Courtesy)
A VBox gateway (Photo credit: Courtesy)

An Israeli company is ready to step in after a United States Supreme Court ruling against the business model of Aereo, a company that rebroadcast live TV via its servers to subscribers, essentially putting it out of business.

TV fans who want to “cut the cable” can turn to an Israeli solution for casting TV shows to devices like tablets and smartphones. “Our TV gateway allows you to legally take a live broadcast off your television and watch it anywhere you want on your own private network,” said Amir Aharonovich, VP Marketing of Herzliya-based Vbox Communications. “So far we haven’t run into any legal challenges.”

The difference is paper-thin but apparently sufficient: Aereo sold subscriptions; Vbox leases antennas.

A series of legal challenges brought down Aereo, seen by many as the great tech hope that would enable users to finally access television content away from their TVs, on computers, tablets, and smartphones. The Aereo service, which was available in about a dozen US cities until a week ago, enabled subscribers to watch live broadcast TV anywhere, via a special remote antenna it leased to customers. The service cost about $30 a month. Aereo was grabbing the signals off the antenna and rebroadcasting them to users via its own network.

The US phased out analog TV signals in 2009, including for “free to air” stations – the major networks like ABC, NBC, and CBS, as well as independent broadcast channels. To watch those stations, users need a special set-top box to decode the digital signals, but the vast majority of viewers get those broadcasts through their cable TV subscriptions. Cable companies, as well as broadcasters, said that Aereo was rebroadcasting their content without permission – and that if it wanted to continue doing so, it would have to pay hefty retransmission consent fees.

Instead, Aereo decided to suspend service while it tries to sort things out. According to many experts, though, it’s unlikely that Aereo will be able to return to service using its previous rebroadcasting business model – meaning that cable TV subscriptions will remain the main, if not only, option for TV viewers to watch live broadcast TV.

That’s not quite the only option, said Aharonovich. “We connect to the TV feed and convert the broadcast to be viewed over a computer network,” he said. “You can then watch it over your home network, or anywhere you can connect to the network.”

Like Aereo, Vbox’s devices allow users to cut the cord and watch TV anywhere and on any device they can access their network. They can watch shows live or record them on a DVR (digital video recorder). The system can connect to free-to-air (FTA) satellite, cable, and terrestrial TV sources. Viewers can watch shows on their devices using Vbox’s iOS and Android apps, as well as on a PC, Mac, media streamer, gaming console and smart TV.

Vbox is unlikely to face challenges from broadcasters and content providers fearful that the company will “horn in” on their business, as they accused Aereo of doing. Vbox does not offer a service; it sells a product, so there is no ongoing subscription fee as Aereo had. “By collecting subscription fees, people paid Aereo for rebroadcasting free content, and this was where the Supreme Court took exception, ruling that they were essentially no different than a cable service provider that has to pay fees to networks for rebroadcasting content. We don’t have that issue,” said Aharonovich. “Our method is different and complies with the law, but the result is the same – users can watch shows anywhere on their network using our system.”

Although Vbox can connect to any broadcast source, it’s ideally used with FTA satellite broadcasts. “We are selling right now in eight European countries, where there are dozens of FTA satellite channels. You could also connect to premium content via cable, but you would need a CI Module and smartcard – the system that descrambles cable signals – connected to our system. Not all cable providers are willing to give users the module, though, so FTA broadcasts are the best use of the system.

The company is trying to resolve issues that would enable American TV viewers to get the most out of the system, because there are not that many FTA satellite channels in the US, Aharonovich said.

The company was established in 2012 and has been selling boxes since February, “and they are very popular in the markets where we are selling,” said Aharonovich. Vbox is similar to Slingbox, which also transmits TV content over the Internet. Slingbox, an American product, streams TV broadcasts to devices over the Internet, but has more features, including the ability to use a hard drive to store programs, and to watch part of a show on one device and pick up at the point you left off on another.

One question many potential customers have is whether it’s worth it to invest in the Vbox, when Internet TV – with content providers broadcasting over the Internet – is coming any day now, as many people seem to believe. But according to Aharonovich, it might be a while before Internet TV can challenge traditional satellite and cable broadcasts. “Most of the new smart TVs being sold allow you to connect to the Internet, and there has been a lot of talk that eventually content providers will move to a full IP broadcast format.”

Even so, that’s not going to happen for at least a decade, said Aharonovich. “People point to services like Hulu, which broadcasts programs over the Internet, but the truth is that the quality of the broadcasts is low and the service is limited. Current on-line TV services broadcast in very low-quality, while TVs are capable of high-definition broadcasts. No one is going to pay for a subscription that does not include HD capability when they can get HD with cable or satellite,” he said.

“Even if the entire Internet infrastructure became 10 times faster than it is now using fiber-optics, demand would still far outstrip capabilities,” added Aharonovich. “For now, cable and satellite are going to remain the primary modes for content broadcasts, and we are position to help consumers make the most of those broadcasts.”

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