Aereo, which launched a service to deliver broadcast television over the internet in New York in mid 2012, is expanding to a further 22 cities in America in the spring, despite legal challenges from broadcasters. The service will offer comparatively low cost access to broadcast channels and a cloud-based video recorder, accessible through web browsers and a range of other devices.
Aereo will make its remote antenna internet television and cloud-based digital video recorder service to metropolitan markets covering nearly a hundred million people as part of the first phase of a planned nationwide expansion. They include Chicago, Houston, Philadelphia, Dallas, Detroit, Boston, Denver, Baltimore and Washington, which are among the 25 most populous cities in America. Los Angeles is a notable exception. It will be backed by a consumer marketing campaign.
Essentially, Aereo claims to provide an array of individually assignable antennae, each about the size of a coin, together with a digital tuner and cloud-based storage, to allow customers to access free-to-air signals over the internet.
The company says that a 200 square foot antennae array on a rooftop can serve around 350,000 users. It will initially have one such facility in each designated market area.
Aereo is currently supported on the iPhone and iPad, as well as most popular web browsers and on Roku streaming boxes. It is working on applications for connected televisions and games consoles.
Users can currently sample the service for up to an hour a day at no cost. Membership plans start at $1 for a day pass, with up to 10 days to watch up to three hours of recordings, through $8 a month for unlimited viewing with 20 hours of storage, $12 a month or $80 a year for 40 hours of storage.
Around half of its current customers are apparently people who have never subscribed to cable or satellite, the digital generation that wants to be able to watch on any device, possibly supplemented with Netflix or Hulu.
Heavy users currently access the service around three to five times a week, which is much less than the three to four hours a day that traditional television is watched in America.
With more markets coming on line, Aereo will impose geographic restrictions based on the billing address of the user. So in that respect it is like having a virtual Slingbox in your home city.
The company was founded with $5 million in seed capital, followed by over $20 million in first-round funding. Aereo has now closed a further $38 million round of finance, led by IAC and Highland Capital Partners, together with previous investors including FirstMark Capital, First Round Capital and High Line Venture Partners.
The company survived an initial legal challenge from broadcasters Calling for an injunction against the service. The case is now going to appeal but speaking in Las Vegas, the founder and chief executive Chet Kanojia said: “We feel pretty confident”.
“Consumers want and deserve choice,” he said. “Watching television should be simple, convenient and rationally priced. Aereo’s technology provides exactly that: choice, flexibility and a first-class experience that every consumer deserves.”
It will be fascinating to see whether consumers will be prepared to pay a modest fee to the convenience of being able to access something that they could otherwise receive over the air for nothing. For many, the virtual television receiver and digital video recorder could prove a compelling proposition.