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Inside Aereo: new photos of the tech that’s changing how we watch TV

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Brooklyn-based Aereo lets subscribers watch and record over-the-air TV anywhere they go on computers, iPhones(s aapl) or iPads. The service is available for now in New York City but will soon be unveiled in dozens more cities across the country for $1 a day or $8 a month.

Media attention to the service has focused primarily on the legal dispute between Aereo and TV broadcasters who have tried, and so far failed, to shut it down. The legal controversy is real but also overshadows the implications of the service for TV viewing and the technological wizardry that makes Aereo work. (Aereo founder and CEO Chet Kanojia will be speaking at our paidContent Live event in April.)

To get a better idea of just how Aereo is serving up TV, we went to the company’s plant in Brooklyn to get some up-close photos. Here’s our tour:

From the Empire State Building to your iPhone

Aereo transmits from the top floor of a nondescript government building on Vanderbilt Avenue on the edge of downtown Brooklyn. You can see it on the right: Aereo building on Vanderbilt

Aereo chose this location for a reason. The floor on which it operates has a direct line of sight to the city’s biggest transmission tower. Here’s a picture of the tower and the view from Aereo’s window:

These direct sight lines make it easy for Aereo to pick up the powerful signals emitted from over-the-air broadcast services like ABC(s dis), NBC, CBS, Fox and local community stations. Aereo’s technology then transcodes and relays those signals to its customers who can watch TV, change channels and record shows with their phones or iPads:

Tiny antennas for everyone in the city

Aereo works by letting every subscriber rent a pair of tiny antennas. Customers get two antennas so that they can watch live TV while also recording a show or, alternately, to watch live TV on two different devices at the same time. While Aereo created the personal antenna system as a way to comply with copyright rules (you can read about the legal issues here), the antennas themselves are remarkable in that they give Aereo the capacity to serve 1 million New York City customers from the single floor in Brooklyn and an adjoining rooftop.

Here’s a close up look of the dime-sized antennas in action:

Aereo antenna closeup

Aereo antennas

Aereo CEO Chet Kanojia explained that the device is a simple copper antenna but that, rather than picking up the entire TV spectrum like a typical cable antenna, it picks up only the 6 megahertz block of spectrum that a viewer wants to see at a given time. He describes it as a “switched antenna” that’s beautiful in its simplicity. The ingenuity, Kanojia said, is that Aereo’s 1.5 inch antenna changes its electrical and magnetic characteristics in order to replicate the tasks of a standard 35 inch UFH or three foot VHF antenna.

The size of the antenna allows Aereo to cram many of them into a small space which is one reason Aereo is able to relay TV to so many people at the same time. Another reason is that the antennas are “multitenant” which means that, when one Aereo subscriber is not using an antenna at a given time, it is available to all other subscribers.

Cheap storage and high-performance fiber

Aereo relies on the antenna system to offer a cheap TV services that subscribers can easily add or drop at any time. But the antenna is only part of the equation. To make the service economically viable, Aereo is also capitalizing on major advances in transcoding technology and cloud storage. It is these advances that now make it affordable for Aereo to translate the over-the-air TV signals into iPhone video streams and to let people store hours of television on remote servers.

According to Kanojia, commercial transcoding costs per stream would have been $8,000 per customer two years ago but now the company can do it for under $20 (these figures relate to capital expenditures, not monthly costs). He also notes that a terabyte of storage, which once cost over $1 million, can now be had for under $100. The new efficiency, he said, is not just in raw storage capacity but better spindle speeds on hard drives that improve transmission times.

Here is a look at Kanojia standing in front of Aereo’s proprietary transcoding devices and a close-up of the servers which act as a private cloud service and on which Aereo customers store thousands of hours of TV to watch later:

Aereo CEO in front of transcoder

Aereo servers

To connect the antenna system with the transcoding and recording devices, Aereo relies on multiple 10 gigabit fiber links that look like this:

Aereo fiber cables

Aereo also relies on leased fiber networks in different spots around New York City to deliver TV content to its subscribers. This system means it doesn’t have to rely on content delivery networks or other middlemen.

“What’s the point of long-hauling something when you’re already 80 percent there?. There’s no CDN’s. It’s a local to local product,” said Kanojia.

Next: the man who would break the cable industry

Aereo wants to overturn the current TV business model in which viewers shell a hundred dollars for a bundle of channels, many of which they don’t want to watch. Aereo’s challenge comes by way of its technology but also in the form of Kanojia himself, who is picking a fight that many have lost before (iCravetv, ivi, etc) — and is so far holding his own. You can now read our follow-up account of Kanojia’s vision for the future of television.

Aereo antenna

28 Responses to “Inside Aereo: new photos of the tech that’s changing how we watch TV”

  1. Fox has threatened to go on pay cable to escape free tv to receive rebroadcast fees. I hope Aereo succeeds but I don’t know where in the fcc regs did broadcasters get the right to charge retransmission fees. I am on the side of cable companies.

  2. Mike Kleinschmidt

    They are over the air braodcast and different FCC rules apply to rebroadcast. Actually, they are boosting signal and those with the right antenna can catch the signal.

  3. Lance Miller

    I’m all for it & since they’ve won the appeal I can’t wait for them to come to Tampa. I’ll be outside yanking down my dish quicker than you can bat a eye.. Go Aereo.!!!


  5. It is legal. Cable companies wish it wasn’t so. Broadcasters are required to provide over the air broadcasting for free, but they can charge cable companies. If cable companies lose customers / money then they will want to pay less which the Broadcasters don’t want them to do. That said, most cable companies have to offer a scaled down package of local channels – this is really the only area where there should be concern. Very few people have this package. Aereo only provides a remote antenna for over the air broadcasts. They don’t provide all the cable channels that most are accustomed to – ESPN, HBO, Cartoon Network, CNN, F/X, Syfy, etc. To get those you need to go through a cable provider. FYI, by cable provider, I am including not only traditional coax based cable companies, but phone, fiber and satellite as well. Also broadcasters usually transmit their signal to cable providers via satellite, which is an extra expense. They have no such expense with Aereo who takes on this cost themselves.

  6. All that this business proves is that the traditional model is old and broken. Like the music industry and the movie industry the TV model of distribution needs to change. Sure the broadcasters shell out big money but they also charge the consumer an exorbitant amount of money and force you to bare the brunt of the cost for channels you don’t want.

    Companies like this need to push the industry to change and let the consumer choose what they want and force the established model to be less bloated and make better decisions.

    Regional restrictions are a thing of the past and the sooner the broadcast industry realizes this and figures out a way to utilize the web and it’s technology rather than fight it the better off we all will be. Let us watch what we want and when we want, if you don’t the people in this industry will change the industry while you aren’t paying attention and leave you in the past.

  7. George95662

    Broadcasters ARE trying to shut them down. Aero is merely receiving over-the-air FREE TV and making it available to users/viewers in that area over the Internet. I actually feel that broadcasters should NOT be paid by TV service providers for their service. Partly because they exist because they were “given” air waves to use in the public’s best interest. They run (paid) commercials to finance their businesses.

    The problem is cable companies got greedy and complained when they were required to carry all stations in one market (carry one, carry them all). The broadcasters countered with OK, then you just pay those of us who you want to carry. Problem is, even with the 100s of cable-only channels, most people still watch the big 4 (or so).

    The entire TV business model needs to be updated to the 21st century. National “cable only” channels already break the market model. The Internet makes affiliates obsolete except for what they can provide locally. If pay TV wants to survive they need to adopt the a-la-carte business model and trash the channels so few of people watch that they can’t support themselves.

  8. Aereo has not been shut down because they have less than 10,000 users in a city of 8 million people, so the broadcasters haven’t made a serious effort to stop them. If Aereo ever acquires enough customers to be a significant threat to the broadcasters, they’ll be given two choices: pay retransmission fees like the cable companies, or the courts will pull the plug on you.

  9. Mike in Maine

    Let us not forget that Broadcasters spew their signals out into the air unrestricted for the public to receive. If those signals were really private then we would be buying a decoder box from the broadcaster to get the signal. Since they ‘broadcast’ the signal I feel I should be able to receive it any way I want and watch the signal on anything I want. If someone helps me with that effort then of course I will pay them – but not the broadcaster.

  10. TV stations pay big bucks to have exclusive broadcast rights to the shows they air. Cable and satellite operators pay them for the privilege of rebroadcast, unless Aereo starts paying retransmission fees I don’t see how anyone could call this legal let alone fair.

    • That’s exactly right but some people can’t see it, or refuse to acknowledge it. Aereo owns the antennas and the transcoding and recording devices, and the public pays Aereo for using their gear. Saying Aereo isn’t doing retransmission because *each customer has their own antennas* is like saying two plus two does not equal four because I had a ham sandwich for lunch.

  11. ChickLittle

    The real irony here is that this is basically how Cable TV started. Since over-the-air broadcasts inherently suffer from interference for a number of reasons, communities started to set up CATV antennas at optimum locations, then pipe that through coax to houses in the area to give them better reception. Aereo is basically just updating that model for the 21st century.

    • Grs Dev

      And the broadcasters have no problem with that as long as Aereo is willing to play by the same rules that cable head ends are having to play by.

      The issue here is that Aereo is trying to commoditize Broadcast TV.

  12. I would pay for this service. Once we went from analog to digital I lost reception of all but two local stations. Whereas before I received an additional six stations or more. Because of geography I no longer receive digital broadcasts.

  13. Wouldn’t it be easier if Oems started to add a tv tuner in tablets, laptops and maybe smartphones? Anyhow who would pay for something that’s broadcast for free?

    I don’t see this service lasting long because it’s illegal. Even if they have 1,000 antennas they are still rebroadcasting tv channels over the internet. A similar service tried something like this a few years ago with dvd players. They allowed people to watch movies the day it was released on DVD by hooking a dvd player up to each account and played whatever dvd (movie) you wanted and streamed it over the web to your laptop. They were sued and forced out of business.

    • tetracycloide

      You mean the Zediva case where, in a quixotic quest to rule the service illegal, the judge in the case contorted the facts so much he eventually concluded that watching a DVD in your own home by yourself was a ‘public performance?’ Aside from the obvious issues with the ruling there’s also the fact that the Aero case is not in the same jurisdiction. Closer to home is the cablevision ruling, which hales from the same district as the Aero case, that found hosted DVR services could be legal. There’s some pretty crazy legal logic in that ruling as well though.

      The real thing we should be discussing here, however, is even if you assume these services are illegal why should the be so? It doesn’t make any sense at all that they have to use all these tiny antennas just to pipe over the air traffic transmission through the internet. Why is doing that efficiently copyright violation? It makes no sense. Further even assuming it’s copyright violation full stop why should it be treated differently from cable offerings doing the same thing only over a different transmission medium? Ivi tried and has so far failed to convince courts it’s ok for internet TV to pay the same compulsory licensing rates as cable TV but there’s no clear reason to me why either should pay anything and, even granting there is a reason, no reason to treat them differently when they do it.

    • The are not rebroadcasting – To transmit (a radio or television program) for public or general use. Lets say you live at the bottom of a hill and you cannot get a signal. Your neighbor at the top of the hill can. So they set up an antenna for you, separate from theirs, and run a cable down the hill to your property to your cable that runs to your [viewing device]. Is that rebroadcasting too?