Over The Aereo

Here Comes Aereo! Service Expanding to 22 New Cities [UPDATED]

"This is not your dad’s cable TV," says CEO Chet Kanojia.
Killer Diller. (Photo: flickr.com/techcrunch, by Dave Getzschman)

Killer Diller. (Photo: flickr.com/techcrunch, by Dave Getzschman)

Hey, look: It’s some actual news out of CES, which has absolutely nothing to do with Evernote-integrated refrigerators! New York-based, Barry Diller-backed TV-streaming service Aereo has been teasing an expansion for some time now, and in a speech today from CEO Chet Kanojia, the company made its move.

The service will roll out to 22 new cities, including Boston, Atlanta, and Washington, D.C, starting in the late spring. Aereo will continue its “Try for Free” program in each of the cities, so would-be cord-cutters can get a taste, but it’ll be invitation-only at first. 

To fund this attempt at world conquest, the company also announced it’s closed a $38 million Series B led by IAC and Highland Capital. Get money, ya’ll. Previous investors including FirstMark Capital, First Round Capital, High Line Venture Partners and “select individuals” also threw invested. The round was actually oversubscribed, Mr. Kanojia told Betabeat by phone from CES. Aereo was aiming for $30 million, but when financiers came clamoring, he said, “Alright.” The additional capital will be used to build up infrastructure, marketing and cover some considerable legal bills. “We decided that we were gonna go into expansion mode and it came together very very quickly.”

The cities were chosen based on population density, how many households get over-the-air broadcasts, and the age of the population. Age is a factor, he noted, because the majority of Aereo’s customers tend to be 35 and under. “It’s a great fit for their lifestyle,” he enthused. “This is not your dad’s cable TV.” Customers “use it as it fits their life.”

Expansion plans were also related to proximity to Aereo’s homebase. The headcount has doubled since our feature about Aereo in May, but it’s still a small team, so they wanted to be able to, “knock off as much ground cover as we can in a two hour flight,” adding, “L.A. has never been a TV town.” Cities that get the service include: Boston, Miami, Austin, Atlanta, Chicago, Dallas, Houston, Washington, D.C., Baltimore, Denver, Detroit, Minneapolis, Philadelphia, Pittsburgh, Tampa, Cleveland, Kansas City, Raleigh-Durham, Salt Lake City, Birmingham, Providence, and Madison, WI.

All told, that new ground covers 97 million new potential customers. If you look at the younger demographic in those market, it could mean 30 million people, said Mr. Kanojia. Although he declined to disclose subscriber numbers, he did say usage numbers–the metric Aereo focuses on–is “extremely strong.”

Of course, this depends on Aereo clearing all its present legal hurdles. Sure, they managed to avoid a preliminary injunction, but broadcasters are far from done fighting. We asked Mr. Kanojia whether her expected more lawsuits from local affiliates in new cities? “I don’t know who can sue us or not,” he said with characteristic nonchalance. “Frankly I’m not too worried or focused on that.” After all, if you start “obsessing” over every incumbent, that hardly leaves time for convincing people to cut the cord.

This post has been updated to include our interview with Mr. Kanojia.