M+E Daily

By Paul Sweeting

Apart from the ongoing dispute over its legality, one of the biggest questions hanging over Aereo has been what it wants to be when it grows up. While that company claims, without citing numbers, that consumer response has been very positive, there is probably a limit to the number of consumers who will be willing to pay $12 a month to stream content they can watch without paying anything, raising the question of how much upside there can be for the hundreds of millions of dollars Aereo would need to build out a nationwide system.

Speaking at the paidContent Live conference on Wednesday, Aereo CEO Chet Kanojia put a little more flesh on his company’s long-term strategy for adding programming to Aereo’s service beyond the handful of broadcast channels available in any given market without falling into the trap of simply recreating the cable bundle with cable-like pricing.

First us is likely to be a free, or low-cost package of news channels, starting with Bloomberg TV, with which Aereo currently has a deal. Beyond that, Aereo is looking to add a subscription movie channel that would be offered as a premium channel at a cost to users of 50 cents to a $1 a month.

“The value proposition there is the ability to watch movies on your own time, so consumers are willing to pay for that,” Kanojia said.

Kanojia described the future of TV, and Aereo’s place in it, as one of “skinny live, and deep library.” There is a relatively small subset of programming, he said, such as sports and news, that is sufficiently time-sensitive that there is valuing in watching it live. Everything else, he suggested, can be accessed on-demand without sacrificing value.

Aereo’s goal, Kanojia said, is to create a subscription service that provides access to time-sensitive live programming at a low cost, with a few premium items such as movies, without forcing consumers to pay for the “bloat” of channels that are providing programming that could just as easily be accessed via Netflix, Hulu, or other on-demand platform at a lower cost.

“The last time I checked there’s no need to have Desperate Housewives or the Real Housewives of Orange County running on four channels at the same time,” he said.

The goal, he said, is to provide 50% of the real value proposition of subscribing to cable — access to must-see live, linear content — at one-tenth the cost. Eventually, he added, Aereo’s real-time service might ended up being bundled with a broadband subscription as an alternative to cable or satellite.