Bloomberg News

Aereo Sets Plans to Expand Online Service to 12 New TV Markets

July 23, 2013

Aereo Inc., the Barry Diller-backed service that sends broadcast TV signals online to subscribers, will announce start dates for 12 new markets in the next several weeks, Chief Executive Officer Chet Kanojia said.

Aereo’s goal is to reach a quarter of the U.S. population in five to seven years, Kanojia said yesterday at the Fortune Brainstorm Tech conference in Aspen, Colorado. The New York-based company uses tiny antennas to capture broadcast signals for its customers.

Owners of broadcast networks and TV stations, including CBS Corp. (CBS:US) and Walt Disney Co. (DIS:US), are battling Aereo in court, saying the service steals their programming and resells it. Chase Carey, chief operating officer of 21st Century Fox Inc. (FOXA:US), has said if the courts don’t stop Aereo, Fox may become a cable channel to block the service. Kanojia said he expects the federal government would intervene in such a case.

Aereo is available in New York, Boston and Atlanta, according to the company’s website, with plans to expand to 18 more cities. Aereo doesn’t operate in California, Arizona, Nevada, Oregon, Hawaii, Alaska, Washington, Idaho or Montana, where a U.S. District Court blocked a similar service in December.

The pace of closely held Aereo’s expansion will fall short of a company forecast earlier this year that the service would be available in 22 markets in three months, Kanojia said. Aereo will be available in about 20 cities, he said.

“We have a very patient investor base,” Kanojia said.

Kanojia said Aereo won’t take sides in a fee dispute that threatens to cut off CBS and its Showtime network for customers of Time Warner Cable Inc. (TWC:US) The companies’ contract expires on July 24, and a spokeswoman for Time Warner Cable, Maureen Huff, told the New York Times the company would recommend Aereo to its New York customers if CBS goes dark.

Disagreements such as the one between CBS and Time Warner Cable will become more common as broadcast networks seek higher fees from pay-TV systems for the right to retransmit local TV signals to subscribers, Kanojia said.

To contact the reporter on this story: Andy Fixmer in Los Angeles at afixmer@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net


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