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The REAL Threat of the Aereo Decision for Start-ups

Aereo’s Saturday morning disappearing act may give potential customers pause when considering new solutions.

When the U.S. Supreme Court ruled last week that Aereo’s streaming service and cloud-based DVR was violating broadcast companies’ copyrights, Aereo’s CEO Chet Kanojia started railing against the decision, claiming that it “is a massive setback for the American consumer” and that it “sends a chilling message to the technology industry.”

This was clearly a whole lot of bluster for a company that had played cute with the rules and tried to get around the current laws by using one of the hackiest solutions we have ever seen, with thousands of antennas being used in an attempt to circumvent the legal system.

However, what happened Wednesday isn’t that a big deal, or that surprising. It is what happened this morning (Saturday) that should have start-ups with big dreams quivering in their boots… Aereo gave its customers about three hours notice and then turned their service off.

MY Start-up Isn’t Trying to Game the Legal System, So Why Does This Affect Me?
Aereo’s legal troubles aren’t the big news here. What IS big news is that a company that raised $97 million and was backed by big name VCs along with Barry Diller pulled the plug on its customers on a Saturday morning with less notice than it takes to watch a Lord of the Rings movie.

Customers were depending on this service to watch content they had recorded as well as live programming and now had no way of doing either of those things. I am sure many of those customers included Aereo as a major part of their cord-cutting strategy and are now left with no comparable service.

Since Aereo HAS been such big news lately, it is a certainty that both savvy consumers and enterprise executives are going to see what happened here:

A well-financed company with a proven solution can simply disappear on a weekend morning… So how reliable are these other companies that I am considering using for services I value?”

So whether your company is trying to disrupt an established industry or just get people hooked on something new, there is now one more thorn on the rose when it comes to your customers’ faith in counting on a new service.

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