Aereo May Win Big as Time Warner Cable Tweaks CBS

NEW YORK ( TheStreet) - Time Warner Cable ( TWC) is threatening to recommend that its subscribers turn to Aereo, the upstart online-television service, if CBS ( CBS) pulls its stations from the cable-TV provider because of failed contract talks.

Time Warner and CBS are currently negotiating fees that the New York-based cable-TV provider pays to re-transmit the network's programs to its customers.

The CBS stations which could be affected by a shutdown include WCBS-TV in New York City, owned and operated WLNY in Long Island, KCBS and KCAL in Los Angeles plus KTVT-CBS and KTXA in Dallas. CBS stations in Boston, Pittsburgh, Chicago, Detroit and Denver would also be affected but to a lesser extent due to Time Warner's smaller footprint in those cities. Cable channels Showtime, The Movie Channel, FLIX and CBS Sports Network are part of the negotiations as well.

Time Warner shares were slipping 0.9% to $115.48 while CBS shares were little changed at $52.50.

The previous CBS/Time Warner re-distribution agreement expired at the end of June. Both sides agreed to an extension which expires at 5 p.m. Eastern time this Wednesday. Negotiations to resolve the issue are ongoing but in recent days, Time Warner has been airing cable-TV and radio commercials urging customers to speak up against losing access to CBS programming.

A Time Warner Cable spokeswoman, in an interview with the New York Times on Sunday, said that if CBS talks fail to produce an agreement, the cable-TV provider may suggest that subscribers use to Aereo to view top-rated CBS programs including "N.C.I.S." and "The Big Bang Theory."

CBS Spokesman Dana McClintock, in an e-mail, declined to comment on the interview. Time Warner Cable spokeswoman Maureen Huff told TheStreet the company is "doing what it can to help customers" including informing them that Aereo will be one available option if CBS cuts the signal

Aereo offers customers a means to watch and record over-the-air TV programs. Aereo offers local stations via a cloud-based system whereby a subscribers can access for $8-to-$12 per month, a tiny antenna in Aereo's "antenna farm,'' which located in Queens. subscribers then control what they watch and when they watch it. Aereo lets you record programs for later viewing on certain computers, tablets, smartphones and set-top boxes.

Currently, the Aereo service is operating in New York, Boston and Atlanta, with other cities planned for further expansion. This morning Aereo announced it will offer the service in Utah beginning August 19th and in Chicago starting September 13th.

ABC ( DIS), CBS, NBC ( CMCSA), Fox ( FOX) and others sued to have the Aereo operation declared illegal. Broadcasters claim copyright infringement of their shows. So far, two Federal courts have sided with Aereo and its method of using free, over-the-air transmissions.

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