Controversial Internet startup Aereo is already turning a profit in some markets, according to Chet Kanojia, the company's CEO, even though the company won't make its goal of launching in 22 markets this year.
Aereo needs only about 6,000 subscribers in a city to break even, Kanojia told attendees of the annual UBS Global Media and Communications conference in New York City on Tuesday. Churn for the service remains low after 60 days, he said, averaging about 2 percent per month. So far, Aereo has spent about $65 million rolling out the over-the-top service in about 10 markets. Kanojia didn't reveal subscriber counts, but said half of Aereo's customers are cord-cutters who have never had cable or satellite service.
Aereo plans to launch in four or five more cities in the few remaining weeks of the year, giving it a total of 15 markets in 2013. Technical snafus in Chicago and Pittsburgh have delayed those launches, he said. Legal wrangling has also delayed expansion, he said. The company kicked off in March 2012 in New York City, offering customers live streamed broadcasts of TV channels on phones, tablets and other devices using antennas. The service, which counts Barry Diller as one of its largest investors, has drawn the ire and watchful eye of distributors and content providers alike. The four major broadcasters are miffed that Aereo doesn't pay retransmission consent fees to rebroadcast their content and have sued the company for copyright infringement in an effort to stifle Aereo's expansion. The courts have so far largely ruled in Aereo's favor but the broadcasters have now asked the U.S. Supreme Court to get involved. Aereo must file its response to the petition this week, according to reports.
Undeterred, Aereo continues to push ahead. In addition to its growth plans across the country, the company announced yesterday it plans to launch on Chromecast, Google's streaming video and music app. Aereo is already compatible with Roku boxes and Apple TV via AirPlay. Kanojia told UBS attendees that Aereo is also looking to make its service more readily available on television sets by possibly putting the service in gaming consoles or installing it directly on TV sets.
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