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Aereo CEO: Our cheap TV wouldn’t exist without cloud computing

The legal controversy surrounding TV-on-the-go service AEREO is interesting — but not nearly as much as the blend of technology that gave rise to the company in the first place.

Aereo is a service that lets people watch live TV anywhere they go by renting them a personal antenna that beams shows to their phones, laptops or tablets. The service, which can be bought for $1 a day, is getting lots of attention because big broadcasters are suing try to sue it out of it existence.

Speaking in New York on Wednesday, Aereo CEO Chet Kanojia explained that the service is only possible because of a “perfect storm” of technology advances that have dramatically lowered the costs of broadcasting and subscriber acquisition.

For example, Kanojia pointed to Aereo’s “antenna farm” in Brooklyn. The site hosts thousands of mini-antennas, each about the size of a dime, that subscribers in New York can rent on a daily or monthly basis. The technology, which offers a combined TV/DVR service, is so compact that Aereo can fit 50,000 pairs of antennas in just 200 vertical square feet.Aereo Dime Size Antenna

This is remarkable but perhaps more remarkable are the plunging data and transcoding costs that meant Aereo could build the site in the first place. Kanojia says the company is buying “tens of petabytes of storage” for as low as $95 a terabyte, and that the price is dropping all the time. What this means is that when (and if) Aereo clears the legal hurdles, it can scale nearly instantly in cities and towns outside New York.

“The cost structure based on the cloud is a fraction of what it was,” he said, adding that companies like Aereo can plan businesses “on the anticipation of these cost curves being driven down.”

Kanojia credits massive R&D by the giants of the tech industry with not only lowering the costs of cloud computing but also changing consumer expectations about media and TV subscriptions. He says these changes have made it possible to offer $1/day subscriptions where consumers can come and go as they wish.

“There’s no installers, no boxes, no lost equipment … they can come in and give it a try for $1.”

While Kanojia is a Steve Jobs fan, he doesn’t think the late Apple (s aapl) founder’s “give them one price” philosophy works for subscription services which, he says, work better with a blitz of options.

In the bigger picture, the Aereo founder says that “TV should be like Twitter” — available everywhere and backed in every application.

None of this will please the big broadcast networks whose content Aereo is rebroadcasting without permission. But Aereo-style technology now seems to be an inevitable part of the future — going back makes about as much sense as going from lightbulbs to candles.

Kanojia spoke at VideoSchmooze, an annual gathering of video insiders hosted by Will Richmond of VideoNuze.

14 Responses to “Aereo CEO: Our cheap TV wouldn’t exist without cloud computing”

  1. If the big broadcast networks go out of business due to this kind of technology there will be no content to rebroadcast. In the end there will have to be some kind of compromise with these kinds of serves. Companies like Aereo clearly have no interest in the content of what they are broadcasting – they are just stealing it. At least the big networks have to be accountable to the audiences (And, yes their advertisers. I think if an “Aereo” typed company takes off they will have to start producing their own program material and because quality video production, and all that goes along with it, is very expensive I doubt that the charge for the service will remain as low as 1.00

  2. Jimfromearth

    If stored in the cloud and then transmitted. Its retransmitted. If it is live steaming it’s not
    retransmitted. Which is it? Anyway maybe I will have to sell my antennas on eBay soon.
    Ime rooting for Aereo.

  3. skeptic86

    > Kanojia says the company is buying “tens of petabytes of storage” for as low as $95 a terrabyte
    I realize you guys are “down to earth” (terra) but it’s terabyte.

  4. TimeKepper

    “Kanojia says the company is buying “tens of petayptes of storage” for as low as $95 a terrabyte, and that the price is dropping all the time.”

    1 Peta = 1024 terabyte
    1024 x $95 = $97,280/peta
    10peta x $97,280/peta = $972,800/10 petas

    Doesn’t sound too cheap AND it doesn’t look like the subscriber base is large enough to cover the storage cost let alone CDN and legal costs.

    Does no one run the numbers on these tech companies claims?


  5. Chet Kanojia was excellent yesterday at the VideoSchmooze conference. His calm command of the technology and the strategic direction for Aereo was striking. He may be worried about the outcome of the copyright litigation and attendant consequences, but you would not know it by listening to him.

    • Kanojia downplays the outcome of the copyright litigation because a small company isn’t likely to beat big corporations with high-powered lawyers in court, so it’s not in Kanojia’s business interest to say much about that.

  6. christajoe

    TV-on-the-go sounds similar to satellite TV service with a difference that it is used for a hand held device. One thing I could not understand here is how antennas are connected to the device I mean I’m sure that it must be available for all smart-devices and no separate hardware need to be purchased for that. So how does the receiver is inputted in the device?

  7. Jeff, you say “Aereo-style technology now seems to be an inevitable part of the future.” Since Aereo *is* rebroadcasting without permission the issue is not technological, it’s legal. Good luck getting around the copyright law. Aereo is fighting people with clout and money.

    • Rich, well put. My point, though, is that it’s this type of technology and TV watching that’s inevitable — not necessarily Aereo itself. There’s a good chance Aereo will get stomped but, if so, something like it will come along. Along shows incumbents may stall innovation but they can never put it back into the bottle. Sooner or later, Aereo will just seem like common sense.

    • Rich if copyright law is on their side, why didn’t they win Cartoon Network, LP v. CSC Holdings, Inc?
      The Supreme and the Obama Administration are both opposed to this non-sense violation of fair use.

      • Because Cablevision is paying the networks for the right to retransmit their content. All they are doing is storing paid-for content for later consumption by paying subscribers. Quite a different scenario than Aereo which is retransmitting content that they have no rights to retransmit.