Aereo is what’s known in the high-tech industry as a “disruptive” force. Broadcasters see the company as a threat to their existing business model — which it probably is.
Aereo’s CEO, Chet Kanojia, told a CE Week 2013 audience in New York City last week that technology and the law will ultimately allow companies like his to prevail in its mission to democratize television.
“Television had to migrate to the Internet, and the cable companies became quite greedy with their bundling of television, Internet and phone services, Kanojia said. “Consumers must be allowed to have a choice, and the truth is that you can’t find a single person who is happy to pay their provider $150 to $200 per month for services they may never use.”
IP, Kanojia said, is the ultimate way to disrupt what he called “artificial barriers” that limit the content viewers want. In Aereo’s case, he said the barrier is cable companies’ hold on content.
Gary Shapiro, president and CEO of the Consumer Electronics Association, interviewed Kanojia about the future of TV and the regulatory and legal challenges faced by his startup.
At the CE Week show, Aereo announced plans to launch its online television service (with RF antennas) to the Chicago area on September 13. The expansion to Chicago will cover 16 counties across Illinois and Indiana. Aereo's technology is currently available to consumers residing in the New York City, Boston and Atlanta designated market areas (DMA). Kanojia said the service would expand to 18 or 19 cities by the end of the year. In New York alone, where the company first started, Kanojia said it has signed up more than 10,000 subscribers.
Aereo offers its subscribers access to programming that is broadcast for free over the air. It rents its customers a small antenna and converts the signal for watching on the Internet, be it on a web browser, set-top box, smart phone or tablet. Aereo’s customers can access the free TV content anywhere and use a software DVR to record it.
Aereo does not pay television stations to air the content, and that makes the company controversial — at least to broadcasters and content owners. However, the U.S. Court of Appeals for the Second Circuit has sided with Aereo in a case brought by the broadcasters.
“Consumers have the legal right to an antenna,” Konajia told Shapiro. “They have the legal right to install it wherever they want on their property, and they have the legal right to record for their own personal use.”
In answer to another question, Konajia said he welcomed all competition.
“This is free-to-air broadcasts. We’re not going after ESPN,” he said. “There is no dispute that consumers have the right to this content.”
The CEO also said Aereo is focused on the technology and not programming. He said there are no plans to expand to original content as Netflix and others are doing.
“We’re a technology company,” he said, with no interest in merging technology and content.