Billionaire Barry Diller, the backer of Aereo, said the streaming-TV service may eventually get as much as 35% of U.S. households to subscribe ... if it overcomes legal challenges from broadcasters.
People in their mid- to late-20s aren't willing to pay $100 a month for cable-TV packages, making Aereo's $8 service increasingly attractive, Mr. Diller said at The Year Ahead: 2014, a two-day conference hosted by Bloomberg in Chicago. Aereo is "on the side of the angels," he said.
Broadcast networks such as CBS and NBC would differ. Aereo offers their signals to subscribers over the internet in nine U.S. cities without the broadcaster's agreement. Aereo says it doesn't need to get permission, much less pay anyone, because it gets the signals fairly using antennas.
Media companies including Walt Disney Co. and 21st Century Fox have sued without much luck so far. After federal judges in Boston and New York permitted the startup to operate during the legal fight, giving it time to spread to new cities, the media companies asked the Supreme Court to rule that Aereo is an illegal operation.
Most recently the National Football League and Major League Baseball filed an amicus brief on the broadcasters' side, saying Aereo would force them to move their programming to cable -- where it can't grab signals without paying.
But Mr. Diller, 71, doesn't seem to think much of the current cable ecoystem either.
"This closed circle of broadcast and cable and satellite is going to break up," he said. "It's not going to maintain itself in the next decade."
Aereo got a boost on Nov. 12 when U.S. Senator Jay Rockefeller introduced a bill to help online video services and Aereo's antenna-based system challenge cable providers and broadcasters. Mr. Rockefeller, a West Virginia Democrat who serves as chairman of the Commerce Committee, said he wants consumers to benefit from lower costs and increased choice.
The bill would "give consumers the ability to watch the programming they want to watch, when they want to watch it, how they want to watch it, and pay only for what they actually watch," Rockefeller said in a statement last week.
Still, the legislation "is likely to face an uphill battle in this Congress," given the opposition of deep-pocketed media companies, said Jeffrey Silva, a Washington-based analyst with Medley Global Advisors.
Mr. Diller, who spent decades in the TV industry and helped create the Fox network, said he isn't surprised that media companies are challenging Aereo.
If he were still a broadcast executive and encountered competitors like Aereo, "I'd sue 'em," he said.
~ Bloomberg News and Ad Age staff ~