New York’s Aereo is getting some competition in its quest to bring live TV online: Atlanta-based Skitter is launching a new service that streams TV stations like NBC, (s CMCSK) ABC (s DIS) and CBS (s CBS) straight to a Roku or WD (s WDC) Live set-top box. But unlike Aereo, which is currently duking it out with broadcasters in court, Skitter is launching its service with all necessary licenses.
Skitter quietly launched in Portland, Oregon in March, and has plans to expand its service to five additional markets by the end of this quarter. The company’s VP of Engineering Alex Emmermann told me during a phone conversation today that Skitter eventually wants to offer live TV access on the Roku and other connected devices across the U.S., and charge customers $12 to $15 for the service. The company is also working on DVR functionality for WD TV devices.
What Skitter offers
Customers in Portland can access the service through a private Roku channel or an app for the WD platform. Roku users are presented with a simple channel grid as well as an option to search for individual shows, while the WD TV app offers a more comprehensive programming guide.
I had a chance to take a look at some test feeds on both devices, and was impressed: Channels launch with relatively little buffering, and additional program information is easily accessible. I could even pause the live feed at any given time and restart it a few minutes later without missing a thing. The video quality was more like SD than HD, but acceptable, and Emmermann said that adaptive bitrate streaming should improve the quality even further.
Skitter users in Portland currently have access to 10 live channels, including CBS, NBC, ABC and Fox (s NWS) as well as the local PBS affiliate. The company plans to add an additional 10 channels next week, including more PBS subchannels and other local offerings. This summer, it also wants to launch ten channels that aren’t available with an antenna. This will likely be niche content, but Emmermann said that the tier will also be available to users in markets that aren’t served by Skitter’s local offerings yet.
How Skitter operates
Skitter started out by offering its technology to second- and third-tier telco operators that are looking to offer TV services to their subscribers but don’t want to settle for just reselling satellite TV subscriptions. The company has been offering its over-the-top solution to a few of these providers, which required it to get retransmission licenses from the affected broadcasters. Skitter is now using these retrans licenses to kickstart its own consumer business. That means that the company can only offer its subscriptions in markets where it is partnering with a telco provider – but it’s also a pretty ingenious business move that could help Skitter to avoid the legal pressure Aereo and others have been facing.
A number of companies have tried in the past to stream live TV online, in part to provide access to live programming for TV viewers who have canceled their traditional pay TV subscription. However, the broadcasters have cracked down on most of these offerings in an effort to protect their increasingly lucrative retransmission business. Ivi.tv had to shut down following an injuction a year ago, and FilmOn had to significantly alter its service after broadcasters obtained a restraining order in late 2010.
The latest company raising the ire of broadcasters is the Barry Diller-backed TV startup Aereo, which currently offers New Yorkers an Internet-based live TV subscription for $12 per month. Aereo rents individual TV tuners complete with dime-sized antennas capable of receiving over-the-air programming to each of its customers, which the company says is legal. Broadcasters aren’t sharing that point of view and have fired off two separate lawsuits against the company in March.
Skitter believes it can steer clear of these kinds of conflicts because it actually has the retrans rights and pays the required retrans fees for the content it offers. “We are a local cable provider,” Emmermann told me. “We have a wireline presence.”
Why this matters
There’s been a lot of chatter within the online video industry about the possibility of a so-called virtual operator – a company that offers you a TV subscription that is entirely delivered over the Internet, and at a much smaller price than your typical cable package. It’s an interesting proposition to cord cutters who don’t want to bother with an antenna to receive over-the-air programming, or can’t get any signal with an antenna.
But this is about more than just convenience: A virtual operator that has access to basic broadcast channels also has a huge potential for disruption, because it could become a launchpad for new live television networks that aren’t exclusively tied to cable.
Skitter’s roll-out will likely be slow, as the company has to advance market by market. But having access to those top-tier broadcasters could prove to be a recipe for success.