At CEWeek 2013 in New York, CEA President and CEO, Gary Shapiro, jokingly remarked during a fireside chat that Aereo CEO, Chet Kanojia, was no longer starting his own car in the morning anymore considering all of the hostility surrounding his company, and while both the audience and Kanojia had a good laugh over it, there is no question that tempers are running hot at the major networks over the issue of what Aereo is doing.
Aereo won a landmark court decision earlier this year allowing it remain afloat and offer free OTA television programming to subscribers in New York City via the Internet, but what remains unclear is if the Second Circuit Court of New York’s decision will safeguard the company in other jurisdictions as it expands across the country.
Aereo expanded into Boston and Atlanta after its legal victory, and according to Kanojia “will be expanding into a total of 22 markets” by the end of 2013. That ambitious plan has raised the stakes for the networks, including CBS and News Corp., who are looking at every possible legal avenue for stopping Aereo in its tracks; including in front of the Supreme Court where this may ultimately end up.
Consumers must be allowed to have a choice and the truth is that you can’t find a single person who is happy to pay their provider $150-$200 per month for services they may never use.”
“It is really quite simple. Consumers are tired of watching seven channels and paying for five hundred,” Kanojia responded when asked why he thought Aereo was necessary.
Kanojia remarked that he came to this country with a belief that America is a free-market system and while that might seem like naivety on his part, he believes that the law and changes in technology will ultimately allow him or a competitor to prevail.
“Television had to migrate to the Internet and the cable companies became quite greedy with their bundling of television, Internet, and phone services. Consumers must be allowed to have a choice and the truth is that you can’t find a single person who is happy to pay their provider $150-$200 per month for services they may never use.”
Aereo charges subscribers $8 per-month for the ability to capture free local OTA channels for viewing on the Internet or even record them with an online DVR. Its New York customers have access to more than 30 channels, including Bloomberg TV. Kanojia touted the ability to watch via a smart device and how its app is now available via a Roku box.
“Consumers have the legal right to an antenna. They have the legal right to install it wherever they want on their property, and they have the legal right to record for their own personal use,” Kanojia responded when challenged by an audience member as to the legality of what Aereo was doing.
Aereo has not been forthcoming in regard to the number of subscribers it has in New York City, but when Kanojia was pressed by Shapiro to give some numbers, he responded “more than 10,000.”
One thing that Kanojia was clear about was that he had no real interest in “merging tech and content” and that companies such as Aereo needed to stick to the technology side where they were strong. The response didn’t rule out the possibility entirely, but the reality is that with Netflix, YouTube, and Hulu developing and broadcasting their own original content, Aereo may not have a choice on the financial end if it wishes to survive long-term.
In the end, with so much lobbying power inside the Beltway, the major networks may eventually have their way if the courts don’t resolve the issue in their favor, but it’s clear that Kanojia has the public – which is sick of being fleeced by its providers – behind him.
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