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Barry Diller: Aereo TV is Legal, Networks Afraid of Change

29 Apr, 2013 By: Erik Gruenwedel

Veteran media executive Barry Diller April 29 said one of the goals of Aereo TV is to open up what he characterized is a “closed system” of broadcast television into a more open Internet-based platform of video distribution.

In an interview with Bloomberg TV at the Milken Institute 2013 Global Conference in Los Angeles, Diller, who is an investor in the subscription service that enables users to stream broadcast television programming via mini antennae attached to portable devices, said the concept of Internet-delivered video as a business remains in its infancy.

Diller said wider access to broadband now enables users get rich video easily over the Internet. That reality, Diller said, will change how media companies interact with the consumer.

“If you don’t like cable or satellite, paying $150 a month for services; if you can live without ESPN … being able to watch free broadcasts, and all of the local stations for $8 a month is an alternative,” Diller told Bloomberg TV’s Willo Bay.

He said consumers would likely choose one wire into the home versus multiple cable or satellite hookups, set-top boxes and DVRs. When asked if Aereo was worth the ongoing litigation with network broadcasters, Diller said the jury was out on that because of changing market conditions and technology.

Interestingly, Bay is married to Walt Disney CEO Bob Iger, whose ABC TV is party to the media company copyright infringement claims against Aereo.

Diller said the Aereo platform is on sound legal footing since broadcasters are mandated by law to provide free, over-the-air signals to devices using antennae.

“That is the right of Americans who gave licenses to broadcasters for [free],” he said. “That’s the covenant. All we’re doing is providing a technological method to receive them.”

Diller said Aereo, which plans to bow service in 22 cities this year, could be profitable with 10 million households.

He said the platform is similar to the DVR in the 1970s when broadcasters and movie studios sued Sony Corp.’s Betamax DVR — litigation that eventually went to the U.S. Supreme Court.

“And of course, [today] we all enjoy video recorders,” Diller said. “It’s not a legal loophole, it’s a right.”

When asked about News Corp. COO Chase Carey’s threat to turn Fox TV into a cable network should Aereo become legal, Diller said News Corp. is just making noise in the hopes it will get relief from Congress.

“I don’t think they see Aereo as a threat, what they are nervous about — and rightfully so — is the shifting ground underneath them as it becomes more and more difficult to justify increasing cable, satellite [retransmission] fees,” he said. “As that closed circle becomes ever more pricey, there are going to be chinks in that armor if the technology allows it.”

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