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News Corp. COO Chase Carey isn’t too pleased about the courts siding with Aereo, the startup that pipes broadcast television programming and DVR features via the Internet. All four of the major broadcasters and several TV stations are actively suing to stop the TV-over-Web company, but the Second Circuit federal appeals court just upheld a decision made last summer and nixed the demand for an injunction.

carey-news-corpSo what’s a TV broadcasting exec to do? If you’re Carey, you threaten to yank a top-tier offering. The COO just threatened to pull the Fox broadcast network — which viewers get for free over the air — and shield it behind a paywall like other cable channels:

“If we can’t have our rights properly protected through legal and governmental solutions, we will pursue business solution. One solution would be to take the network and make it a subscription service. We’re not going to sit idly by and let people steal our content.”

But is it really stealing if it’s available for free to anyone with an antenna? Maybe, maybe not, but it’s easy to see why Aereo gets under the industry’s skin. The company’s bold strategy can cause a lot of upheaval, particularly when it comes to the broadcasters’ “retransmission” revenue. Pay TV providers pay them a big chunk of change for the right to carry these broadcast channels in their packages.

This could just be an empty threat — after all, News Corp. stands to lose a lot of viewership if it follows through — or it could be a sign of things to come, particularly if the primary forces in the industry get inspired to take a similar tack. It’s too early to tell, though, and there’s still plenty of legal battles to get through before we see any radical maneuvers take shape.

For now, Aereo is still a nascent startup with a small subscriberbase in New York only. However, it has plans to spread into 22 markets this year, and now with a courtroom victory under its belt, as well as plenty of press coverage, it could have a very good base from which to take off.

For end users, this could be the TV solution they’ve been waiting for, or at least a solid step toward it. The service, which is priced on par with Netflix, Hulu and others, offers live television in HD clarity, thanks to loads of tiny antennas that pull the signals from the airwaves. Along with local and major broadcast content, it also offers time-shifting/DVR features for Web and iOS users, as well as Roku and Apple TV customers. To get a better sense of Aereo, here’s a video demo and interview with Aereo CEO Chet Kanojia from February’s “D: Dive into Media” conference.

Click below to see the official PR statements from News Corp. and Aereo.

News Corp. PR statement:

“News Corporation has a long-standing commitment to the broadcast television business, and to delivering the highest-quality entertainment, sports and news programming to our viewers on a localized basis. We are committed to broadcasting under a business model where programmers receive fair compensation from parties that want to redistribute our product while continuing to make our product available for free to individual consumers that want to access our signal.
“We believe that Aereo is pirating our broadcast signal. We will continue to aggressively pursue our rights in the courts, as well as pursue all relevant political avenues, and we believe we will prevail.
“That said, we won’t just sit idle and allow our content to be actively stolen. It is clear that the broadcast business needs a dual revenue stream from both ad and subscription to be viable. We simply cannot provide the type of quality sports, news, and entertainment content that we do from an ad supported only business model. We have no choice but to develop business solutions that ensure we continue to remain in the driver’s seat of our own destiny. One option could be converting the FOX broadcast network to a pay channel, which we would do in collaboration with both our content partners and affiliates.”

Statement from Aereo PR rep Virginia Lam:

“Aereo has invented a simple, convenient way for consumers to utilize an antenna to access free-to-air broadcast television, bringing television access into the modern era for millions of consumers. It’s disappointing to hear that Fox believes that consumers should not be permitted to use an antenna to access free-to-air broadcast television. Over 50 million Americans today access television via an antenna. When broadcasters asked Congress for a free license to digitally broadcast on the public’s airwaves, they did so with the promise that they would broadcast in the public interest and convenience, and that they would remain free-to-air. Having a television antenna is every American’s right.”