Aereo, which offers an online TV and DVR service for $8 a month, has a date at the Supreme Court this month to face the broadcasters that want to wipe it out of existence. In case the stakes weren’t high enough, Aereo’s biggest investor confirmed on Wednesday that there’s no back-up plan if the company loses.
“If we lose we’re finished … Aereo would probably not be able to continue in business,” media mogul Barry Diller told Bloomberg TV.
Diller’s IAC, along with other investors, has poured $58 million into the Brooklyn based start-up. Aereo rents tiny antennas to subscribers, who use them to watch and record free over-the-air TV, and is now live in about 12 cities.
The broadcasters, backed by the NFL and others, claim Aereo is violating copyright and are demanding the Supreme Court issue an injunction. Aereo argues that, since each subscriber controls their own antenna, the service amounts to legal private copying that is akin to a remote DVR or VHS machine.
Diller’s statement comes a week after Aereo CEO Chet Kanojia said “there is no Plan B” if the company comes up short at the Supreme Court.
Since it launched in 2012, Aereo has framed its business as an explicit challenge to the existing bundle model of TV, in which consumers are obliged to purchase expensive packages of channels even if they only watch a handful of them. If Aereo was forced to join this regime, its service would be unviable, according to Diller.
“We could probably pay retransmission consent dollars if we could make a deal with the broadcasters … but the value proposition would go out of the game,” he said.
The Supreme Court case is set for April 22, and will be heard by only eight judges, since Justice Samuel Alito recused himself from the case. A tie means a victory for Aereo since it will mean that an appeals court ruling, which found Aereo to be legal, will stand.