Aereo founder and CEO Chet Kanojia is holding the line on the contention that the antenna-to-DVR streaming service is not violating any broadcast copyrights, even as the Supreme Court decision on its fate looms. But its technology is turning heads, landing Aereo at No. 7 on CNBC's 2014 Disruptors list.
Kanojia (Source: Aereo)
The list is a ranking of 50 companies that are shaking up their respective industries. Other disruptors on the list included multichannel network Fullscreen at No. 21 and digital video advertising giant Brightroll at 27.
While the classic antenna itself is fading from public use--only 6 percent of households rely on over-the-air antennas, compared to nearly half of U.S. households in 1986, a CEA-commissioned study found--Aereo is looking to reenergize OTA by combining it with online video streaming.
Kanojia is holding Aereo's cards close to his vest, refusing to say whether the company has a plan B should it lose at the Supreme Court.
He told CNBC's Squawk Box simply that "I think we'll have to look at it."
"The foundation of the company was to create a system that is a consumer-centered system that is based on the Internet model. … The whole point of Aereo was to create that open platform," he said in the video interview. "And if we don't succeed at doing that then we don't succeed in doing that. We didn't start this to figure out some clever way of making money. This is as much an emotional decision as a (business decision)."
Kanojia focused on the monopoly status of cable companies in the interview, as well as the broadcasters' reliance on that noncompetitive content delivery structure. He noted that cable operators don't pay copyright fees--they pay retransmission consent fees to broadcasters.
"What they're paying is retransmission fees which (were) enacted a decade later. Because cable companies are regional franchise monopolies. It was a competitive measure by Congress that had nothing to do with copyright," Kanojia said. "It's a complete fallacy that people think cable companies pay copyright. No, they pay them fees to have the monopoly rights in that market."
An Aereo spokesperson told FierceCable on Tuesday that the provider is not an MVPD and therefore not subject to retransmission fees under current laws.
Kanojia also told CNBC that broadcasters can continue raking in profits by focusing on their biggest revenue source, advertising.
"How is it that a company like Google is making billions of dollars with text ads and people who create content can't do that? Because they have great technology. And people with great content can't do that? Of course they can. I think it's purely that they're relying on the monopoly structure and that breeds anticompetitive, anticonsumer sentiment."
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