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Jason George takes us back a few years to an original disruptor, Aereo, a company that tried to bypass regulations and use technology to distribute media content in the days before Netflix and the subscription-based business model. 

Network effects

The scrappy technology startup faced an existential threat. The company was down to its final arguments in the United States Supreme Court, where the ruling would determine its fate and if millions of invested dollars would be lost. The fact that Aereo existed at all was a byproduct of arcane telecommunications regulations, which had evolved over the decades along with the medium of broadcast television, which it intended to disrupt.

The American government mandated that over-the-air channels using the public airwaves be distributed for free. Their shows could be viewed by anyone with a basic antenna. This could be a clunky means of accessing television, as broadcasting is subject to the vagaries of weather and topography that interfere with the signal.

Cable and satellite providers stepped into the gap, becoming the preferred entertainment sources for many households. In addition to numerous specialty channels they always included the primary broadcast networks viewers demanded. The wrinkle in this arrangement arose from the fact that television providers had to pay over-the-air networks for the rights to carry their programming, even though a home viewer could presumably access the same content for free.

Areas of interest in this article include:

• Subscription fees and copyright infringement
• Innovation and regulatory workarounds
• Modern capitalism and corporate value creation

Read the full article, Innovation and Hacking Regulations, on the Jason George website.