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.