History of Aereo and the technological and regulatory challenges it faces.

1. Barry Diller, chairman of IAC
Aereo TV: Barely Legal By Design
IAC owns Match.com, Vimeo, and The
Daily Beast, which it merged with
Newsweek in 2010
IAC backs Aereo TV -
Watch OTA TV on Computer, iOS device,
or Set-top Box
Created the FOX Network
Brought Home Shopping to Television
As Head of Paramount Pictures
Invented the “Made for TV Movie”

2. Internet access became widespread
Networks realize that the internet could be a source
of revenue and began to stream their content on
commercial-supported format at HULU
Creation of YouTube User - Generated Content
and Television Programs
Peer-to-peer software - Napster and Kazaa
sharing of video programs as well as music
New Digital Formats like MPEG and WMV
Increasing processing power and graphics capabilities
Mid-1990’s
1999
2005
2008

3. HULU and YouTube use an embeddable video player
based on the Adobe Flash plugin API
Microsoft, Adobe and Apple all developed HTTP
streaming formats Apple’s HTTP Live Streaming (HLS)
considered the favorite
Browser plugin a relic of the early web
push for single HTML5 standard
Netflix uses Microsoft’s Silverlight browser plugin

4. “It’s as if the mirror cracked and you can see these
changes are starting to happen all over the place,”
Mr. Diller said. “Programming over the Internet is
going to happen, and cable is only now waking up
to the fact that everybody hates them. I think we’re
on the side of the angels.”
“In my heart of hearts, I belive that when businesses
are created or preserved with analogue mentalities,
they’re artificially constrained and ripe to be recast in
a different way.” said Kanojia.
“Why can’t there be a simple way to pay for this? It’s
just irrational that it should cost hundreds of dollars
a month. It’s an abusive system set up in an artificial
way.”
CEO Chet Kanojia

5. “No incumbent ever wants to see its territory invaded,”
Diller said of the lawsuits against Aereo.
He added: “I am very fond of Les Moonves, and he is a
terrific executive. Les said to me: ‘Look, I have no objec-
tion to what you’re doing. Just pay me retransmission
fees and you can go in good health.’ I said, ‘When you
can get Radio Shack’ ” — which sells antennas — “ ‘to
pay you retransmission fees, I’ll be right behind them.’ ”
Les Moonves of CBS

6. Aereo’s technology was designed to take advantage
of a landmark 2008 ruling holding that a “remote”
DVR product offered by Cablevision was consistent
with copyright law
Because each copy was viewed by only one household,
the court ruled that Cablevision was not engaged in a
“public performance” of copyrighted works
Aereo assigns each user an antenna exclusively for his
own use. And so, like Cablevision, when 1000 users record
the same program, Aereo creates 1,000 redundant copies
In Aereo’s server rooms are row after row of tiny
antennas mounted on circuit boards

7. Simple copper antenna that, rather than pick-
ing up the entire TV spectrum picks up only the
6 megahertz block of spectrum that a viewer
wants to see at a given time
Antennas are “multitenant”, when one Aereo subscriber
is not using an antenna at a given time, it is available to
all other subscribers
“switched antenna” that’s beautiful in its simplicity.
Aereo’s 1.5 inch antenna changes its electrical and
magnetic characteristics in order to replicate the tasks
of a standard 35 inch UFH or three foot VHF antenna

8. To make the service economically viable, Aereo is
also capitalizing on major advances in transcoding
technology and cloud storage
Not just in raw storage capacity but better spindle
speeds on hard drives improve transmission times
Commercial transcoding costs per stream would have
been $8,000 per customer two years ago but now the
company can do it for under $20. A terabyte of storage,
which once cost over $1 million, can now be had for
under $100
Translate the over-the-air TV signals into Airplay video
streams and let people store hours of television on re-
mote servers

9. Aereo contends that each of its antennas functions
separately to receive the incoming broadcast signals
Broadcasters argued that Aereo’s antennas function
collectively as a single antenna, aided by a shared
metallic substructure
So far the courts have sided with Barry Diller and Aereo

10. Most are under 30 and many have never had
traditional subscription cable or satellite TV as
adults
Devices Aereo supports, the iPad, iPhone, and iPod
No Android phones as yet, but all the major browsers
on both Mac and PC
Aereo users largely rely on Internet-only and
streaming services for content

11. Sources:
Downes, Larry. “Aereo TV: Barely Legal By Design” Harvard Business Review March 7, 2013
Stewart, Christopher. “High Noon for Diller’s Aereo”. Wall Street Journal 24 May 2012
Fung, Amanda. “Tech startup wheels into ex-tire plant”. Crains New York 10 April 2012.
Gorman, Michael “Aereo puts TV antennas in the cloud, streams OTA broadcasts on the internet”
Engadget Feb 14th, 2012
Crook, Jordan “Aereo Looks To TV Providers, ISPs To Accelerate Growth” TechCrunch 4/1/2013
Louis, Tristan “Aereo: The future of TV is here today” Forbes 4/13/2013