CBS May Create Its Own Internet-TV Service to Challenge Aereo

CBS Corp. (CBS) would consider creating its own online-streaming television service with other networks if Aereo Inc. is allowed to continue selling broadcast programming over the Internet.

CBS may offer its shows in an Internet version of cable TV, know as an over-the-top service, Chief Executive Officer Les Moonves said on CNBC today. The Supreme Court is scheduled to rule this year on whether Aereo can resell broadcasters’ programming without their permission.

“We are going to win either way,” Moonves said.

Media companies including CBS, Walt Disney Co.’s ABC, 21st Century Fox Inc. and Comcast Corp.’s NBCUniversal are challenging Aereo’s practices. The New York-based startup is threatening the industry’s business model, in which cable companies pay the broadcasters for the right to distribute their programming, even though it’s available for free over the air through an antenna.

Broadcasters say a federal appeals court ruling favoring Aereo created a blueprint that might let cable and satellite providers avoid paying those retransmission fees. Such payments are estimated to exceed $4 billion this year. Broadcast companies such as Fox have said they may convert to cable channels if Aereo isn’t shut down.

Aereo, which is backed by billionaire Barry Diller, uses thousands of dime-sized antennas to obtain broadcast signals without paying fees to the networks.

Last year, New York-based CBS acquired a stake in a company called Syncbak that lets local TV stations stream their programming online.

To contact the reporters on this story: Alex Barinka in New York at abarinka2@bloomberg.net; Joshua Fineman in New York at jfineman@bloomberg.net

To contact the editors responsible for this story: Sarah Rabil at srabil@bloomberg.net Crayton Harrison, John Lear

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