Aereo is revving up its ambitions. The Internet TV company, which allows users to stream and record over-the-air television on their digital devices for a monthly fee, is planning to roll out its service to 22 U.S. cities soon, beginning with Boston. The Barry Diller-backed Aereo made few friends among New York networks when it launched a little more than a year ago here; a number of them joined forces to sue. But the Second Circuit Court of Appeals in New York ruled in favor of Aereo over 17 TV networks trying to shut it down. Now Aereo is playing offense rather than defense as it expands to Boston and beyond; on Monday, reports the Boston Globe, Aereo "launched a preemptive strike, asking a federal court to rule that its business model is legal."
Last week, Fast Company caught up with Aereo CEO Chet Kanojia, an increasingly visible TV disruptor who has always insisted he’s just a humble engineer. Our chat is a window into his mind shortly before this aggressive move.
FAST COMPANY: What’s the state of Aereo?
CHET KANOJIA: The state of Aereo is great, busy. We announced 22 additional cities, and we’re building that stuff out.
What does your success thus far reveal about the frustration of consumers of TV?
The word you use is a good one: there’s really a frustration that I think consumers feel today over lack of choice, disproportionate pricing. On a purely logical level, there’s the fact that using Aereo and a couple other libraries for 20-25 bucks a month gets many people most of what they need. Compare that to [what cable offers]: a lot less friendly technology, a set of hoops to jump through, all for 120 plus dollars, and I think the outcome is obvious at this point.
You were confident even a year ago that you were on firm legal footing.
That confidence level has not been diminished; we’ve been given great validation from the courts. People need to revisit the fact that this industry was built on a public grant of spectrum, and that grant is still being used, and there’s an obligation to program in the public interest. That obligation is crucial to our broadcasting fabric, and needs to be protected. Television should not become a luxury item, and it’s happening. Most 22-23-year-olds, or even 25-27-year-olds, they can’t afford to call up a cable company and spend $150-$200 a month, and they’re seeking an alternative. Is this what we want, that the mass medium of communication is a luxury item? That would be a travesty.
You’ve said in the past that Aereo would be a success even if it merely contributed to a conversation about TV. But it's sounding increasingly like a viable business.
All of us who start companies, the biggest validation we see is when consumers say something is cool, that they find value in it. That’s the key motivator. Seven months of the product in people’s hands have shown that people care about the product, which is a huge validation for us. Once you have that consumer acceptance, the business part takes care of itself.
Do you really think Fox might abandon its broadcast status to become a pay-only network, as one of its executives recently threatened?
That they would give up that beachfront property—I find it personally difficult to fathom. The attraction of that footprint is so large, someone will step in to serve that function. Spectrum rights are tremendously valuable. So that sounds ludicrous to me.
This interview has been condensed and edited.