CBS Invests in TV-Streaming Startup in Challenge to Aereo

CBS Corp. (CBS), escalating its conflict with the Internet-television startup Aereo Inc., has acquired a stake in a company called Syncbak that lets local TV stations stream their programming online.

Syncbak works with stations to bring broadcasts to the Internet while limiting the programming to authorized viewers, CBS said today in a statement. The approach differs from that of Aereo, which puts local broadcasts online without the permission of the stations. CBS, based in New York, didn’t disclose the size of the minority investment.

Syncbak represents a way for CBS to adapt to the era of Internet television without losing control of its programming. The network has joined other broadcasters in suing Aereo, seeking to shut down the New York-based company, which is backed by billionaire Barry Diller. Aereo recently won a court appeal that allows it to sell access to broadcasters’ content without paying the networks a fee.

“Broadcasters are looking for the best way to respond to consumer demand for streaming their content,” Syncbak Chief Executive Officer Jack Perry said in today’s statement. “I am particularly pleased that CBS has recognized the role that Syncbak can play as the broadcast model continues to evolve.”

Authentication System

Syncbak relies on authentication technology to ensure that viewers watching a local channel’s broadcasts are actually located in the area, helping stations keep tighter control over their content. CBS plans to work with the Marion, Iowa-based startup in the coming months, though Syncbak will continue to collaborate with other networks as well.

By taking local broadcast signals for free and selling them online for $8 to $12 a month, Aereo has rankled the networks. CBS and News Corp.’s Fox have both threatened to pull their signals off the air and turn the networks into cable-only channels if Aereo isn’t shut down.

“Trust me, the cable guys would love for us to do that,” CBS Chief Executive Officer Les Moonves said in an interview earlier this month.

Virginia Lam, a spokeswoman for Aereo, declined to comment on CBS’s investment. Bloomberg LP, the owner of Bloomberg News, is an Aereo partner and offers its cable channel on the service.

About 14 million, or 12 percent, of U.S. homes with televisions rely solely on broadcast signals to watch programming, according to Nielsen and SNL Kagan.

Syncbak’s technology -- which is being tested by more than 100 television stations, including CBS, ABC, Fox and NBC affiliates -- can allow broadcasters to offer programming free to consumers or for a monthly fee.

The National Association of Broadcasters and the Consumer Electronics Association have also invested in the startup.

To contact the reporter on this story: Edmund Lee in New York at elee310@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net

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