CEO Of Aereo, Backed By Barry Diller's InterActiveCorp (IACI), Says Fewer Than 1M Subscribers Needed For Profit

 @AlexCKaufman on August 15 2013 6:38 AM
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Aereo CEO Chet Kanojia spoke to Startup Grind founder Derek Anderson and a crowd of New York City entrepreneurs on Wednesday about his Barry Diller-backed startup. International Business Times/Alexander C. Kaufman

Aereo CEO Chet Kanojia said Wednesday that his local TV streaming service will turn a profit, even before it reaches the million-subscriber mark. 

Comparing the New York company to the Comcast Corporation (Nasdaq:CMCSA), the largest U.S. cable provider, which has more than 22 million customers, Kanojia said that 1 million subscribers would be "fabulous," and 5 million would be "extremely fabulous." 10 million? That number elicited the response, "Oh my god, what will I do now?" -- because, he said, a few hundred thousand registered users is all his company needs to turn a profit.

Speaking to a crowd of entrepreneurs at a startup incubator space in midtown Manhattan, the Bhopal, India-born tech executive compared his company's expansion to that of Mongolian emperor Genghis Khan.

"Why do we conquer?" he asked the crowd of about three dozen attendees. "We just do. We've got to keep that philosophy."

The startup, owned by Barry Diller's InterActiveCorp (Nasdaq:IACI), charges customers between $8 and $12 a month for a specially crafted antenna that picks up local broadcast television airwaves and plays them on computers. 

In January, Aereo announced it would move into 22 cities across the U.S. during 2013, and it now operates in New York, Boston and Atlanta and has set dates to launch in Chicago, Dallas, Houston, Miami and Salt Lake City.

Kanojia said the speed of the pace of expansion has been slowed by the small size of the six-person team responsible for setting up shop in new markets. Cities were selected by the number of early adopters that registered for the service.

Aereo has been sued numerous times by broadcast TV's biggest networks, including CBS Corporation (NYSE:CBS), The Walt Disney Company's (NYSE:DIS) ABC, 21st Century Fox (Nasdaq:FOXA), Comcast-owned NBC Universal, Telemundo Communications Group Inc. and public broadcaster PBS, which have all demanded retransmission fees for broadcasting their content online.

But the networks' claims have been struck down by courts in New York, and the U.S. Court of Appeals for the Second Circuit denied their request for an injunction to halt Aereo's service. Last month, the court refused to rehear an earlier decision on the preliminary injunction.

Kanojia also said he wished CBS would "leave us out" of its ongoing battle with Time Warner Cable, which blacked out the network earlier this month amid a battle over pricing.

"I wish they'd leave us out of this mess," Kanojia, clad in a gray plaid jacket and a white shirt, said. "I wish someone focused on the consumer and not on money."

He hinted that the company would "make announcements later this year" about its complex antenna system that picks up broadcast signals, and he said the company has no plans to enter the "library" television business already dominated by Netflix and Hulu.

"We will do certain innovative things to make the business better," he said.

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