Aereo will take its TV distruption to 22 new cities this spring

Castle on Aereo TV

Aereo, which offers a way for people to watch and save TV shows on their mobile devices, has so far been available only in New York City. Now, Aereo is undertaking a rapid rollout that will take it to over 90 million consumers in 22 new cities.

Speaking at CES in Las Vegas on Tuesday, Aereo CEO Chet Kanojia says the expansion amounts to phase 1 of a rollout and that it will build on lessons it learned from its New York City customers. The expansion will be fueled by a new $38 million round of funding from media mogul Barry Diller’s IAC.

The move is another step in the growth of Aereo, which allows people to watch TV shows on their mobile devices and even to store shows on a remote DVR device. People can choose to sign up for $1 a day, meaning they can come and go from the service as they wish.

Kanojia said the site has proved very popular with consumers even without marketing, relying for now on word of mouth. He suggested the marketing will ramp up as the service is rolled out to the new markets in the coming months; Aereo’s website shows that the cities will include Boston, Chicago, Cleveland and Denver.

The service has upset traditional broadcasters like ABC and Fox who are suing Aereo, claiming that its retransmission of over-the-air TV signals amounts to copyright infringement. Aereo has countered by saying that the service is legal because each subscriber has their own individual dime-size antenna — which gets around the rule that forbids retransmitting to many people at once.

A court in New York, which is for now the only place Aereo is available, has so far refused broadcasters’ demands to shut down the service though a California court has recently ruled that a similar, competing service was illegal.

Overall, the fate of Aereo is significant because it could provide widespread access to mobile TV and eventually help to unbundle the sale of TV channels in the same way Apple’s iTunes helped unbundle the sale of songs. At the CES event, Kanojia said Aereo’s customers are about split between younger people who expect TV to be available everywhere and people who have cable subscriptions.

The service recently added Bloomberg TV to its list of channels. As we reported recently, Aereo has been able to offer its service thanks to new technologies and economies of scale that have come about with the advent of cloud computing.

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