Broadcasters say that both services violate local TV stations’ copyrights by streaming free, over-the-air transmissions without payment. And the media companies were encouraged by recent court victories over FilmOnX. But Aereo CEO Chet Kanojia, who has been winning most of his legal battles, says not so fast. Since there’s never been an opportunity to look at the FilmOnX system in depth “we don’t know what the technology is,” he told the Goldman Sachs Communacopia Conference. “I just don’t know so I shy from doing a comparison.” Meanwhile, Kanojia says he has a winning hand with his case that says Aereo merely allows consumers to lease technologies — including antennas — that they have a right to use. Unlike cable and satellite companies that push channels to consumers (the set top box typically filters out the ones you don’t want), with Aereo “the signal sits dead without your intervention.” That makes his system similar in legal terms to an Internet server, such as Google Drive, that allows consumers to store their music collections. “If you stop Aereo, you’d be stopping entire industries.”
Related: Aereo Expands To Four More Cities
Meanwhile, Kanojia says the company backed by IAC’s Barry Diller can be “extremely profitable” as it seeks to expand to 22 cities by year end — including four markets unveiled today. Aereo lays out about $45 for the equipment needed to serve a new subscriber when it enters a market. He has the same basic business challenge that hotel managers face: they must avoid overbuilding to satisfy brief spikes in demand. That’s why Kanojia stayed on the sidelines in August when CBS went dark on Time Warner Cable’s system in NYC, a market he serves. “We saw an impact, obviously, but chose not to take advantage of it” by encouraging people to subscribe so they could watch CBS. While the company hasn’t disclosed subscription numbers, the CEO says that it’s especially popular with people between 25 and 45 with a median income of $100,000. About half have pay TV subscriptions, and an equal number use Aereo to watch programming on a TV set. Local news is especially popular.
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