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

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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.

11 Responses to “Aereo will take its TV distruption to 22 new cities this spring”

  1. If the broadcasters thought aero was not disruptive, then they would not be spending their easy earned money to fight them in court. Of course aero is disruptive and if it is not stoped it will continue to grow, to thenpoint where they will have to work harder to earned a dollar, that is their fear. I cut the cable a few months ago, out of the hundreds of channels offered I actually watched one or two percent, the other 98 percent was garbage and I still had to pay for them. The current system is abusive and monopolistic, I applaude aero’s work even if I never get to use them, since I live in California.

  2. Lance Miller

    Their website indicates that they’ll be coming to Tampa soon. I can’t wait to yank down the dish hanging on the side of my house & save $50 per month. I can’t wait to make that call to DTV & tell them to KMA..

  3. I think Aereo should have a class-action lawsuit sign-up sheet on their website.

    Organize to sue the “broadcasters” who are GIVEN FREE SPECTRUM, but cannot deliver a usable signal to the geographic locations that they claim to serve, thus necessitating a subscription to the Aereo service.

  4. streamingmediablog

    This headline and summary calls Aereo “disruptive”. What has Aereo done to change the current way TV is consumed? Nothing. So why are you feeding into the hype by declaring Aereo as being a “disruptive” company or technology when they have no traction in the market? Please define how Aereo has “disrupted” the current TV business in any way.

    Aereo’s numbers are so small, they won’t even disclose them. And when they were required to in court, last May, they said they had 3,500 subscribers, many of which were not paying and still trialing the service. That’s not disruption.

    We need less hype and more reality in the industry. A company should not be classified by the media as being “disruptive” unless they actually are, with data to prove it.

    • Thanks for your comment streamingmediablog. Aereo is disruptive for the reasons I cite in the story — the ability to watch TV anywhere and the potential for disintermediation.

      You’re right that Aereo has yet to disrupt the market. But the company has yet do any marketing and it is able to scale almost instantly.

      Whether we like Aereo, or think it is moral or legal, is immaterial for deciding if it’s disruptive.

      • Dan Rayburn

        “the ability to watch TV anywhere”? That’s not really accurate.

        Aereo gives consumers the ability to watch a “very limited number of local TV stations”, on a very limited number of devices, in what the industry would classify as non-HD content. They don’t support Android devices and in order to get it to your TV, you have to have two devices, an Apple TV AND an iPad/iPhone.

        And they can’t scale “almost instantly”. They have to setup antenna farms in each city, rent co-lo space, power, handoffs, connect to their CDN etc…. and every single stream they deliver, and ever show thet have to store in the cloud costs them more money. The economics are very hard to scale and the infrastructure can’t be turned up quickly, at scale.

        Aereo knows this, that’s why they had to go out and raise a B round already. It’s very cost intensive, even with all the cloud services in the market today.

  5. And here’s another statement from Diller: “Aereo has thousands of customers for our service, but we’re not retransmitting to many people at once! Where did you get that idea? What’s wrong with you?”

  6. And here’s a statement from Diller: “We distribute copyrighted material without paying for it, but we aren’t worried. We’re the future, unlike broadcasters who are stuck in the 19th century, so we’ll win every court battle! No problem!”

  7. How does the geography restriction work? eg. Can I sign up for a NYC-based account through my parents (who still live in NYC) and then watch NY broadcast TV in Chicago? If so, could be a killer option for those missing their home team sports.

  8. Mcbeese

    If it comes to Dallas, I will certainly give it a try to test the quality of service. I don’t see myself becoming a regular customer though, because there is so little content of interest to me on the major networks.