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CES: Aereo CEO Details Expansion Plans

CompleteCoverage: CES 2013

With the completion of a $38 million round of Series B
funding, announced Tuesday, Aereo has raised more than enough funding to
complete the rollout of the service into 22 markets by the end of the first
half of the year.

Thenationwide rollout is expected to be completed by the end of the year,
though the timeline for going live in specific markets will depend on speed of
construction, Aereo's CEO and founder, Chet Kanojia, told B&C at the 2013
International CES.

The company is already offering a service in New York City
and has identified Boston; Miami; Austin; Atlanta; Chicago; Dallas; Houston;
Washington, D.C.; Baltimore; Detroit; Denver; Minneapolis, Philadelphia;
Pittsburgh; Tampa; Cleveland; Kansas City; Raleigh-Durham, N.C.; Salt Lake City;
Birmingham; Providence, R.I.; and Madison, Wis., as markets for rollouts in the
first half of the year.

Aereo provides live broadcast signals to Internet-connected
devices, including smart TVs, smartphones, tablets and computers. Users are
charged either $1 a day, $8 a month or $80 a year.

Broadcasters have sued Aereo, which does not pay them for
their signals, claiming copyright violations. Aereo contends that the service
is legal under fair use provisions because each user receives the signals from
its own separate antenna.

Kanojia declined to discuss the number of subscribers or
users of the service. He said that usage had been very good. "About three-quarters
watch five to seven shows" and half are watching "15 shows a week," he said.
Among the users, about half didn't have a multichannel subscription before
starting Aereo and the other half use it to supplement their cable or other
multichannel subscription.

Litigation remains a major wild card in the services

Kanojia said that it would be difficult to say how long the
legal battle might last. Broadcasters are currently appealing a decision that
denied their request for a preliminary injunction to shut down the service.
Those appeals will have to be exhausted before the two sides move onto a trial.

The explosion of connected devices at the 2013 International
CES was an encouraging trend for the service's prospects, he noted.

Looking forward, he said that they were thinking about
adding social media and TV experiences to the service. "There is currently
nothing that is really compelling in that area and we'd like to take advantage
of that," he said.

Aereo currently does not collect a great deal of user data,
but could in the future if programmers wanted to work with it on developing new
offerings, Kanojia said.

He also said that the service has the ability to provide
ratings. "Nielsen has said they could do it," he said. "We don't have a need to
do it but if someone wanted them, we'd be happy to work with them."