• December 22, 2014

TV-on-Internet service Aereo gets $34M in funding

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Posted: Thursday, January 9, 2014 4:30 am

NEW YORK — Aereo, a Barry Diller-backed startup that provides broadcast television channels over the Internet for a monthly fee, said Tuesday that it secured $34 million in additional funding from outside investors.

The money will help Aereo expand beyond the 10 metropolitan areas it currently serves. It also will allow Aereo to develop apps for additional devices, such as Internet-connected TVs and game consoles, while battling copyright-infringement lawsuits filed by broadcasters.

The additional funding, announced on the sidelines of the International Consumer Electronics Show in Las Vegas, comes from Aereo’s lead outside investor, Diller’s IAC/InterActiveCorp, as well as several existing and new investors.

Aereo’s service starts at $8 a month and currently covers New York, Boston, Houston and Atlanta, among others. Subscribers get about two dozen local over-the-air stations, plus the Bloomberg TV financial channel.

In each market, Aereo sets up a data center with thousands of dime-size antennas. The company temporarily assigns an antenna to each subscriber to record a show or watch it live and transmits that show over the Internet to the subscriber’s device. Because each subscriber gets his or her own antenna, the company reasons, it’s no different from having a personal antenna at home to pick up free, over-the-air broadcasts.

Broadcasters argue that Aereo built the individual antennas specifically to skirt copyright law, as there’s no technical reason such a service would need them. As a result, the broadcasters said, Aereo ought to pay licensing fees like cable and satellite TV providers.

So far, Aereo has won court rulings in New York and Boston.

But federal judges in Los Angeles and Washington ruled against an Aereo-like service called FilmOn X. In a ruling that bans FilmOn in all but three states, Judge Rosemary M. Collyer in Washington wrote that with antennas, servers and other equipment all networked together, “this system ... is hardly akin to an individual user stringing up a television antenna on the roof.”

Meanwhile, broadcasters have appealed the New York ruling to the Supreme Court.

© 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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