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Boston-Based Startup Aereo Challenges Cable TV System

Chet Kanojia, founder and CEO of Aereo, holds one of the company's antennas. When you subscribe to the service, you’re basically renting one of these antennas, using the Internet as the cord, and using a cloud server like an online DVR. (Bebeto Matthews/AP)

Chet Kanojia, founder and CEO of Aereo, holds one of the company’s antennas. When you subscribe to the service, you’re basically renting one of these antennas, using the Internet as the cord, and using a cloud server like an online DVR. (Bebeto Matthews/AP)

BOSTON — Boston is home to a media battle that could shape the future of television. A locally run startup called Aereo is offering a new service that streams broadcast channels over an Internet connection — no cable TV necessary.

WCVB-TV is suing, accusing the startup of being a freeloader. But that’s not stopping Aereo’s plans to expand to 12 new markets in the coming weeks, including all of Utah on Monday.

The other day, Skip Bensley was at work at his office job in Cambridge when the jury in the Bulger trial reached a verdict. He wanted to follow along, so he pulled out his iPhone and used Aereo to livestream the local news.

He also used Aereo to watch the New England Patriots’ first preseason game. Except he was busy when the game was on, so he used Aereo to record it and then streamed it to his TV when he got home.

“You don’t have to sit through all the commercials,” Bensley said. “There’s a little button that you can kind of jump forward like you’re playing a media file back in your media player.”

Bensley doesn’t have cable TV service. And he doesn’t have a TV antenna, either. Aereo streams local over-the-air broadcast channels such WBZ-TV, FOX 25 and PBS over the Internet.

One Boston-area blogger has added Aereo to his news media consumption routine. (Steve Garfield/Flickr)

One Boston-area blogger has added Aereo to his news media consumption routine. (Steve Garfield/Flickr)

At Aereo’s offices on Summer Street near the South Boston waterfront, an employee pulls out a bag of little coated copper doohickeys. Each is smaller than a dime. Hundreds fit inside one Ziploc bag. They’re antennas. Aereo stuck thousands of these onto an undisclosed rooftop somewhere near Boston. When you subscribe to the service, you’re basically renting one of these antennas, using the Internet as the cord, and using a cloud server like an online DVR. It costs $8 per month for 20 hours of online storage.

Aereo engineer Teodora Vidolova is testing one of the computers that routes those over-the-air signals. She graduated this spring from Olin College in Needham, and says she gets a kick out of working for a company that’s growing quickly across the country.

“One of my friends’ parents actually had heard about Aereo when I was telling them about it,” Vidolova recalled. “And they’re like, ‘Oh yeah, I wish. Excited for when it gets to L.A.’”

Cable companies and TV broadcasters are not excited. Boston’s WCVB-TV and its owner Hearst have sued. They say Aereo is redistributing shows without paying. The media companies declined to comment for this story, referring only to the legal complaint that calls the startup a “free-rider.” But Aereo CEO Chet Kanojia says telecommunications law is on his side, and so far courts have sided with his firm in other legal challenges.

“We’re not a cable company,” Kanojia said. “We are an equipment provider.”

Kanojia says his company is only doing for people what they’re allowed to do already: hook up an antenna and get free over-the-air HDTV. He says he and his partners wanted to innovate in the television space, and that meant staying far away from the cable system that Kanojia says is slow to give viewers what they want.

“For us, it’s obvious that television consumption is going to be online, ultimately.” Kanojia said. “So we had to come up with a technological way where we could create an opening.”

So despite the legal challenge, Aereo is expanding as fast as its 70-some Boston employees can put up antenna farms across the country. Aereo serves Boston, New York City and Atlanta now. By this time next month, it’ll be in Miami, Salt Lake City, Dallas and Houston, giving some people a new way to watch basic television while giving cable executives heartburn.

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  • Aegius

    Cable TV prices are absurd. They need more competition and this is a great step in that direction.

  • Barry Kort

    Is there some reason a consumer cannot simply buy this micro-antenna and hook it up directly to an HDTV or home LAN?

    • Johan Corby

      A simple antenna pulls in beautiful, free local HD channels. Aereo provides a simple, hassle-free way of recording and watching on a ton of devices without needing to setup a LAN (which most people wouldn’t have a clue how to do.) The antenna they use is an end around to allow them to get the broadcasts.

      • Barry Kort

        I have a simple indoor antenna that I constructed myself from an online do-it-yourself page. But it’s not a micro-antenna like the ones used by Aereo. My understanding is that micro-antennas (like the ones used in cell phones) employ a novel fractal design.

        Is there some reason these modern micro-antenna designs are not available directly to the end user?

    • zysmith

      You can but some folks get lousy reception no matter what they do. Aero gives you a prime location for an antenna so you get clear reception.

    • TheMogulboy .

      I’ve been waiting to see a demonstration that a single micro-antenna really works by itself.

      • Barry Kort

        I understand these are used in cell phones, so that would be a demonstration at the frequency bands used in cell phones.

        But it’s not obvious how these tiny fractal antennas work at VHF and UHF wavelengths.

        • TheMogulboy .

          I recalled the textbook theory calls for the size of antenna to match the signal wavelength to achieve maximum gain. The size of “micro-antenna” is far off what it is intended for broadcasting ATSC signals.

          Well, you could argue the “fractal” is a whole new theory, which I am not sure is the basis for these “micro-antenna.” A quick Google search turn on HDTV antenna designed by this theory. I’ll try to attach an image (here is the link: http://www.instructables.com/files/deriv/FU2/Q5H3/HD2RTUPO/FU2Q5H3HD2RTUPO.LARGE.jpg) It is not tiny.

  • Frederick Wright

    We’ve been subscribers to Aereo since they first debuted in Boston. Reception on our indoor antenna was very poor since we live downtown and most of the signals go sailing right overhead. We do not have the option of using an outdoor antenna or a dish since we live in a historically listed building.

    • Johan Corby

      Have you tried the Leaf Antenna? About $30 and solves a lot of issues with bad reception.

      • Frederick Wright

        Yes – we tried Leaf and it was the best of a sorry lot but still not nearly as good as we’re getting from Aereo even with that provider’s occasional streaming problems.

        • Johan Corby

          Yeah, sometimes, reception is just bad. Making the move to Aereo for the fall. Fingers crossed.

  • creaker

    I’d pay $8/month just to get clean reception of PBS. And if cable busted up their tier pricing, I’d pay $8/month to them – but they won’t.

    • Johan Corby

      You can get a Roku for as little as $70 and it has a PBS channel. Not EVERYTHING, but a good deal of PBS shows on demand with no monthly fee.

  • zysmith

    My only issue with streaming content is, I can only get high speed service from my cable company and they require you subscribe to cable to get it so no savings for me

    • ChevSm

      My problem is that you still need to use the cable companies to get internet access at home. I use an antenna for TV b/c I refuse to pay for cable but I have no other choice when if comes to internet access. The next thing we need is a company that provides cheap internet access at home. I would love it if I was only paying $8 a month for internet!

      • Rudy Robinson

        FreedomPop has very cheap internet via cellular WiFi hotspot.

  • PithHelmut

    Yeah like cable companies don’t free ride off our private data.

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