UBS Confab: Aereo CEO Says Cable Companies Would Be Logical Partners

A combo deal offering consumers an Aereo subscription with broadband service “makes a ton of sense,” Aereo CEO Chet Kanojia said today at the UBS Global Media and Communications Conference. That would help the fledgling, Barry Diller-backed operation which offers its subscribers streams of local broadcasters’ free, over-the-air signals. It also could help cable companies that have said they’d consider launching their own version of Aereo if broadcasters continue to demand big price increases for retransmission consent rights. Aereo would be difficult to mimic because there’s a “broad portfolio [of patents] that we’re pursuing,” Kanojia says. His process of using micro antennas tuned to different frequencies “has never been done before.” Aereo also enjoys marketing advantages by being first out with the product. Nothing is likely to happen until the courts decide what to do with broadcasters’ charge that Aereo infringes on their copyrights by transmitting their signals without their permission. (Aereo says that it simply leases versions of the kinds of equipment consumers already use to watch free TV.) But Kanojia says he doesn’t worry that, if he wins in court, broadcasters will make good on their threats to take their signals off the airwaves. “I have the deep conviction that Congress will protect free broadcast.”

Meanwhile, Aereo continues to expand into additional markets and platforms. It recently became available on Android-powered devices, and is engaged in tests with Google’s Chromecast, which inexpensively enables TV sets to receive Internet video. He hinted that he’ll unveil additional technologies, possibly including a gaming console, at the CES consumer electronics show next month. The upshot is that the current model of bundled pay TV programming is “not sustainable. You’re telling the consumer, ‘You pay me to watch commercials.” He sees the system breaking down as content creators see growing opportunities to reach viewers directly, as opposed to through conventional channels. “Somebody is going to ask the question – why are we continuing to invest” in the bundle? Aereo doesn’t say how many subscribers it has, but most are in their late 20s or early 30s, and 65% watch on a big screen TV. “It is not an economy product for them. It’s a convenience and simplicity product.”