Aereo, the controversial streaming service that allows subscribers to view over-the-air programming online, doesn’t need millions of users to turn a profit. The company's Chief Executive Chet Kanojia explained that having over a million registered members would result in a “fabulous” business, while 5 million members would be “extremely fabulous”. That being said, Kanojia mentioned to a group of New York entrepreneurs that subscribers in the hundreds of thousands are all that is needed for his company to remain profitable.
Aereo has yet to actually publicize how many people have signed up for their programs, though the figure could be getting quite high. The service has been displaying constant growth, and in January, the company announced plans to move to 22 cities across the US in 2013. Currently, the service is available to residents in New York, Boston and Atlanta, with expansions to Chicago, Salt Lake City, Dallas, Houston and Miami coming soon.
For many, it’s extremely surprising that Aereo can be so successful without a massive user base. After all, the ideology behind many aspiring tech companies is to focus on expanding reach and attracting as many people as possible. For example, internet radio service Pandora has amassed over 200 million registered members, and yet their profits for the last couple quarters have been slim.
Despite their business success, Aereo has unfortunately been feeling the wrath from broadcasters such as CBS, ABC, Fox, NBC Universal and Telemundo. These companies believe that Aereo’s practice of retransmitting broadcast television without paying royalty fees is a violation of their rights. On the other hand, Aereo has argued that since they provide users with a tiny antenna to capture the programs, and maintain a 1:1 ratio of subscribers to antennas, then they are technically “converting” instead of “rebroadcasting”.
Either way you look at it, Aereo is walking a thin line when it comes to legality. But regardless of whether you support their methods or not, from a business standpoint, they seem to be doing quite well.
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