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Lessons for Netflix, Inc. (NFLX) from Aereo Bankruptcy

If you ask Aereo’s founder and CEO, Chaitanya Kanojia, whether he has any words of wisdom for Netflix, Inc. (NASDAQ:NFLX) as he departs the online streaming arena, he will give you a mouthful of those. He might even make you think that his company has started a debate, which will reshape the way how content is seen on TV. On Bloomberg, David Fannon, executive vice president at, explained how hollow those words actually are.

Netflix, Inc. (NASDAQ:NFLX)

Fannon made Aereo look like a rather cheap shot, on account of the licensing bills that the broadcasting company was unwilling to foot. Something that he thinks that other players like Netflix, Inc. (NASDAQ:NFLX) wouldn’t even think of because they have sound business models, which do not depend on free (with some connotation of stolen, although technically that is not the case) content from other companies.

Aereo, which had earlier claimed to have cracked a loophole in regulation pertaining to broadcasting, to go around these licensing fees, found out after a Supreme Court ruling that was just wishful thinking. Now the company’s management want some sort of claim on the legacy that it has left behind which companies like Netflix, Inc. (NASDAQ:NFLX) might exploit in future. According to Fannon, that could be an even greater form of wishful thinking than that preceding the court ruling.

The  major players in the content business have hardly anything to appreciate Aereo for, because the fact that the case went to Supreme Court doesn’t count for much in itself. It was ultimately lost.

“[…] Anything that Netflix, Inc. (NASDAQ:NFLX) does HBO is going to counter. Again HBO was the first, people have to remember that, HBO has always been ahead of everybody on this bell curve. Netflix followed the HBO model and just changed it slightly. So HBO is going to counteract Netflix, and Les Moonves [CEO of CBS Corporation] is going to counteract everybody else […],” said Fannon.

Aereo was never a part of this cat and mouse chase in the content business, and so any discussion that the management of the bankrupt company thinks it instilled is nonexistent.


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