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Broadcasters Fear the Music in Aereo Fight

"The challenge is where do they come down in the heavily bundled-world and the a la carte world," McGuire said in a phone interview from Redwood City, Calif. "If they push too hard, they'll do exactly what the music industry did 12 years ago which was try to use the courts and contracts to block consumers from acquiring the content they eventually expect to get. And we saw what happened there."

But all is hardly lost for Big Media. Aereo may be a sign of the future rather than a genuine disruptor, says Carl Salas, a media analyst at Moody's Investors Service. The big broadcasters may soon offer a similar service to Aereo at an even lower price point, and the most popular channels - ESPN, HBO - will still be available only through a pay-TV service. A la carte may actually end up costing consumers more than the current bundle but at least consumers will have the satisfaction of paying for exactly what they want.

The same might be said for Apple's iTunes.

"Aereo is appealing to people who are already looking at cord shaving or cord cutting," Salas said in a phone interview in New York. "It's more likely that Aereo is just another example of fragmentation, a headwind, rather than a death knell to the big media companies."

In other words, it may be just another Napster.

Written by Leon Lazaroff in New York

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