Aereo case before Supreme Court could change how you watch TV

Supreme  Court appears conflicted on legality of Aereo
Supreme Court appears conflicted on legality of Aereo

A case involving Aereo, a web TV service start-up, and broadcast television networks, is before the Supreme Court Tuesday. And the final outcome could impact how consumers watch programs going forward—and at what cost.

Aereo, based in New York City, allows paying customers to watch broadcast TV signals live on mobile devices or record the programming to view later. Aereo is an alternative and cheaper way to watch shows for a fraction of what it costs to view programming through cable, which often bundles content at much higher prices.

How Aereo works

Aereo found loophole in law: O'Leary
Aereo found loophole in law: O'Leary

Federal law requires that anyone rebroadcasting a so-called public performance, such as your favorite news or local show, is required to pay copyright fees. Those rebroadcasting fees are forecast to generate an estimated $4 billion for the broadcast TV networks this year, NPR news reports.

Here's how Aereo works.

A user, requesting to watch a specific show, is assigned an individual micro antenna by Aereo that tunes to the right channel. The content eventually is streamed onto a mobile device for viewing.

Aereo in the metro New York area starts at around $8 a month. In contrast, cable providers can charge about $100 and up for a large, grouped package of programming—regardless of how many channels you use, and how many hours you actually view.

Source: Aereo

So let's say Aereo ends up winning the case. What about Aereo's future as a business model?

That will still be very much an open question. Aereo CEO Chet Kanojia will have won the right to sell Web access to broadcast TV programs, without paying for them himself. That doesn't mean he's going to have a successful business, Recode reports.

It will also be interesting to see how Aereo's distribution push unfolds. Aereo doesn't have dedicated space on most of the big Web TV devices its potential users are likely to use, like Microsoft's Xbox or Sony's PlayStation.

Go here for the full Recode story.

Editor's note: NBCUniversal, which is CNBC's parent company, is suing Aereo. NBCUniversal also is a minority investor in Re/code.