IAC chairman Barry Diller. (David Shankbone)

Aereo, the New York City-based service that lets cordcutters live-stream network TV online, has been making broadcasters feel litigious ever since IAC led a $20.5 million Series A in the startup last February. The group of 17 broadcasters suing Aereo argue that the individual antennas Aereo assigns each user are an illegal loophole to avoid paying networks costly retransmission rights--and that Aereo is guilty of copyright violation of their content.

This January, Aereo raised $38 million more, which should help cover its considerable legal fees. But the TV incumbents haven't found much support in the courts.

Today, the Second Circuit appeals court ruled in favor of Aereo, denying broadcasters their request for a preliminary injunction and upholding the decision made Federal District Court last summer. That vote of support is well-timed to Aereo's recent major marketing push--expanding service 29 new counties across New York, New Jersey, Connecticut and Pennsylvania.

CEO and founder Chet Kanojia got the inspiration for Aereo by looking at the 2009 Supreme Court case, which ruled that Cablevision was within its rights to move its DVR systems to the cloud. The court of appeals referenced that decision in their ruling today:

 “We conclude that Aereo’s transmissions of unique copies of broadcast television programs created at its users’ requests and transmitted while the programs are still airing on broadcast television are not ‘public performances’ of the Plaintiffs’ copyrighted works under Cablevision. As such, Plaintiffs have not demonstrated that they are likely to prevail on the merits on this claim in their copyright infringement action. Nor have they demonstrated serious questions as to the merits and a balance of hardships that tips decidedly in their favor. We therefore affirm the order of the district court denying the Plaintiffs’ motion.”

But as AllThingsD notes, today's decision just means that Aereo can continue operating while the trial is underway, it's not a legal all-clear.

It is worth noting the dissenting opinion from District Court Judge Denny Chin, who doesn’t buy the Cablevision argument at all: “The system is a Rube Goldberg-like
contrivance, over-engineered in an attempt to avoid the reach of the Copyright Act and to take advantage of a perceived loophole in the law.”

Sounds like someone in chambers has a Google Reader full of tech blogs!

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. 

The company, which lets customers live-stream broadcast television to their mobile devices for a $12 a month fee, has been grappling with television stations who insist Aereo needs to pay for the privilege.

In March, 15 plaintiffs, including ABC, NBC, CBS, Fox and even PBS, sued the company for copyright infringement. That legal matter has yet to be decided.

Aereo’s new deal, reported in The Wall Street Journal earlier today, appears to be a departure from its model for broadcast stations, as the streaming service will pay for Bloomberg TV content.

Here are the two companies' riveting statements. From Aereo founder and CEO Chet Kanojia:

Bloomberg Television offers exceptionally high quality business news content and we believe that our members will see deep value adding in Bloomberg Television as their ‘go-to’ source for financial news. With this partnership, Aereo continues to deliver innovative, easy to use technology, more choice for consumers, and an exceptional consumer experience.

And from a Bloomberg Television spokeswoman:

Bloomberg Television is dedicated to bringing world-class business news and market information to viewers, and we are pleased to have Aereo among our broadcast distribution partners.

Fortunately for Aereo, Bloomberg TV offers a livelier experience.

Mr. Kanojia (Photo: informitv.com)

New York Tech Meetup heroes Aereo released a new deal today geared towards those who want to try the broadcast TV streaming service without actually having to commit. Paging NYC dudes under 30! (Ba dum tsch.)

The new feature, called "Try for Free," allows users to access Aereo for one hour daily without ever having to sign up or input their credit card info. So if you start watching a program on Aereo at 3 p.m., you'll have access to the service until 4 p.m. You won't be able to DVR anything, though.

Try for Free is a rather ingenious ploy, staged to pull in new users who may hit their hourly usage max and opt to go for one of the paid plans. It also broadens Aereo's reach, pulling in new users who were maybe skeptical about the service at first, but who are willing to try it for free. And, as AllThingsD Peter Kafka pointed out, think about how useful it could be for people interested in catching a bit of a football game come Fall.

“We know that one size does not fit all, that’s why we’ve designed our new pricing structure to work for a wide variety of lifestyles,” said Aereo CEO Chet Kanojia in a press release.  “Whether you want a day pass to watch the ‘big game’ on your mobile device or an annual membership that provides you with 40 hours of DVR storage, we have a plan that works for you. Our pricing is designed to work with the consumer – not against them.”

And, as if you needed any more reason to move to New York, it's still only available to people based in NYC. Sorry, Valley.

Mr. Diller

Yesterday, U.S. District Judge Alison Nathan denied broadcasters' request for a preliminary injunction on Aereo, a service backed by Barry Diller that lets users live-stream basic channels like NBC, CBS, ABC, and PBS, all of which are suing the startup.

The plaintiffs had requested an injunction to prohibit consumers from watching programming on Aereo until the broadcast had completed airing--knocking the wind out of the whole watch-it-live proposition. But the judge's decision yesterday also offers a hint as to how other claims in the lawsuit may be decided. 

As we discussed in our feature on Aereo, CEO and founder Chet Kanojia designed the service, which relies on individual antennae per consumer, to hew to the letter of the law. Precedent in this case refers back to what's known as the "Betamax" case, which made VCRs legal, as well as the "Cablevision" case. The latter refers to a Supreme Court ruling that Cablevision was allowed to move its DVR systems to remote servers, rather than have consumers store programs they recorded to their individual cable box.

As Mr. Kanojia told Betabeat in May, “A simple logical extension to me was: this content is broadcast for the consumer, ends up in the public airwaves, is part of the broadcast legacy. So if network DVR is legal why can’t we build a remote network antenna?”

Broadcasters have called the idea that individual antennaes, also stored remotely in Aereo's warehouse, a "gimmick" and cynical ploy, arguing that this constitutes a "public performance," which requires copyright licensing. However, yesterday, the Court stated that, "faithful application of Cablevision requires the conclusion that Plaintiffs are unlikely to succeed on the merits of their public performance claim.”

The Court also noted the importance of preserving, “the expectations of parties, like Aereo, who rely on binding precedent."

In the decision, Judge Nathan said,  "[t]he overall factual similarity of Aereo's service to Cablevision...suggests that Aereo's service falls within the core of what Cablevision held lawful," adding, “[i]ndeed, in light of this Court's factual determination that each antenna functions independently, in at least one respect, the Aereo system is a stronger case than Cablevision.”

See, now this is our idea of juicy summer soap opera. Stay tuned for the appeal.

Mr. Kanojia.

A ruling is expected this afternoon in a lawsuit against Aereo, a potentially disruptive service that allows customers to stream broadcast television content without anyone, customers or Aereo, paying fees to broadcasters. The company is backed by more than $20 million from investors, including Barry Diller of IAC, who may be getting a little nervous: Today a Fox executive basically accused Aereo CEO Chet Kanojia of lying in court.

Mr. Kanojia had testified that no one in the industry told him there would be a problem with his business, which gets around paying fees by letting customers rent an antenna stored in a remote warehouse—the 2012 version of rabbit ears, which boosted analog signals and allowed customers to pick up more channels for free.

Not so, Fox's Sherry Brennan said in court today, according to the Wall Street Journal. She testified that she told Mr. Kanojia that she was concerned about copyright before the service launched, and that he had sounded "angry" at the time. She also expressed concerns at the time that Aereo's customers wouldn't be counted in Nielsen ratings, she said.

Here's Betabeat's imagined version of the exchange:

Sherry Brennan, a longtime television executive, leans over her desk phone. Chet Kanojia, a longtime entrepreneur, is on speakerphone.

SH (in the no-nonsense manner of a mother or perhaps a West Wing staffer): You're going to stream our content and not pay us retransmission fees because of some crappy loophole? Are you nuts?

CK (darkly): They thought Steve Jobs was nuts too.

SH (sighs, fiddles with her pencil): Well, are these fake antennas at least going to count as views with Nielsen so we can tell our advertisers?

CK (agitated): Nielsen? Nielsen? Are you serious? You know Nielsen isn't going to exist in two years, right?

SB (throws pencil): No! Don't say that to me! Who do you think you are? Twenty-one million people watched American Idol last week!

Chet Kanojia: (angrily) This conversation is over.

There are some minds that may never meet. Fox is joined by Comcast Corp.'s, NBC, Walt Disney Co.'s ABC, CBS Corp., and a unit of Univision Communications Inc. in the lawsuit.

Mr. Diller

The sun was still setting when The Observer rounded the corner under The High Line for IAC's Internet Week closing party, co-hosted by Aereo, a provocative new startup that will allow users to view broadcast content on their computers, smartphones and tablets. Off the drab West Side Highway, the Frank Gehry-designed building shimmered like a landing dock for a space ship--as if the top could twist off and whir its way into the atmosphere. Will Arnett and Wilmer Valderrama walked the red carpet. Dolled-up in pale pink, Allison Williams (the Miranda to Lena Dunham's Carrie) took Barry Diller's elbow as she navigated the crowd.

As the origin myth has it, Mr. Diller’s transformation from a Hollywood mogul to Internet soothsayer for this new digital era started with an Apple PowerBook. “No question that his relationship with his little screen, which is irritating to everybody in the room, has altered his life,” his closest confidante and now wife Diane von Furstenberg told The New Yorker some years back.

It was the early ’90s—right around the time Rupert Murdoch refused to make Mr. Diller a principal at Fox, the fabled fourth network Mr. Diller pioneered when competitors insisted that three would do just fine.

In search of an empire of his own, Mr. Diller embarked on a self-directed innovation tour—PowerBook in hand—visiting MIT’s Media Lab, and meeting with Steve Jobs (biding his time at NeXT Computers between gigs at Apple) and Bill Gates. Looking at the future through his PowerBook–shaped crystal ball, Mr. Diller concluded that a “new video democracy” was on the horizon. As The New Yorker put it, Mr. Diller saw how “the computer screen might become a TV set, and the keyboard would be a mechanism for summoning anything. The speed would be astonishing. A billion bits of information per second would travel over a wire.”

“My god. I’m impressed,” Mr. Diller told The Observer earlier this week, chuckling at his own prescience. “I mean that’s really shocking, at least to me, since I can’t imagine my thinking in ’92 had evolved that far. ’94, yes. But not ’92.”

Over the phone, Mr. Diller sounds not unlike a debonair Darth Vader. There’s a lot of impeccable elocution and heavy breathing. “I haven’t read that story since it was published. I don’t even know if I ever actually read the whole thing,” he offered with the kind of offhand braggadocio one might expect from the man credited with inventing the TV miniseries and the movie of the week at ABC, and greenlighting The Simpsons.

Two decades later, IAC, the corporate salmagundi of Internet companies where Mr. Diller now serves as chairman, recently led a $20.5 million investment round in Aereo.

Using remarkably tiny, thumbnail-size antennas stored in a warehouse in Brooklyn, Aereo is able to live-stream broadcast TV—the adorkable New Girl on Fox, say, or the upcoming London Olympics, which cost NBC $4.4 billion—to any mobile device for just $12 a month. Users can watch the programming as it airs, or record up to 40 hours of content. Aereo won’t say so, but coupled with a Netflix subscription, the new service will enable many users to cut the cord of their cable subscriptions.

“I thought it was fascinating,” Mr. Diller said. “And because I thought it would further develop ‘television’ over the Internet, I was intrigued.” According to Aereo’s CEO Chet Kanojia, Shana Fisher, one of the start-up’s seed investors, first introduced Aereo to IAC, which is a limited partner in her fund, High Line Venture Partners. “Barry immediately gravitated towards it because of his history,” said Mr. Kanojia, who divides his time between Aereo’s headquarters in Long Island City and its engineering base in Boston. “He said, ‘I want to meet this guy.’” He had to be sure, said Mr. Kanojia, that the technology was not “a fantasy.”

Skepticism allayed, Mr. Diller has been helping shine the spotlight on Aereo through everything from his recent congressional testimony on Net neutrality to that celebrity-studded Internet Week party.

Naturally, Mr. Diller’s former colleagues from the broadcast world would like to litigate Aereo out of existence. Less than two weeks after IAC announced its investment in Aereo, 15 plaintiffs, including ABC, NBC, CBS, Fox and even PBS, filed a lawsuit seeking damages for copyright violation and an injunction to stop Aereo from operating, just as they did a similar startup called Ivi.tv last year. Rumor had it Aereo raised $20.5 million expecting a fight, a claim Mr. Kanojia denied. The core dustup involves retransmission fees, a backdoor money stream networks came to depend on after the 1992 Cable Act, which required broadcasters to either declare their channels a “must carry” for distributors like Time Warner and DirectTV or opt for retransmission consent in the form of cash or other considerations. (Aereo argues that its minuscule antennas enable a “private performance” for individuals, absolving it from paying licensing fees.)

New Yorkers were forced to familiarize themselves with “retrans” fees after a dispute between MSG Network and Time Warner Cable resulted in a blackout of Knicks and Rangers games smack in the middle of Linsanity. On an earnings call last month, Time Warner CEO Glenn Britt told analysts he found the Aereo lawsuit “very interesting” and would be watching it closely.

“[Aereo] is the most direct attack on retransmission consent that we’ve seen,” Richard Greenfield, a media analyst for the broker-dealer BTIG, told The Observer. “I think the multichannel distribution world, which would benefit from an end of retrans, is foaming at the mouth for a legal ruling in favor.”

Television incumbents have fought every major technological advancement, from cable TV to the Betamax. But it’s hard to shake the feeling that Mr. Diller’s involvement in Aereo is particularly nettlesome. After all, who would be better poised to introduce broadcast TV on the Internet to the masses than a storied executive who spent the last few years nurturing online video start-ups like CollegeHumor and Vimeo.

Of course, betting that Mr. Diller can replicate the audacity of his network days hasn’t always panned out for prognosticators. He may have seen the future of TV on the Internet, but post-Fox, Mr. Diller landed in the woods of West Chester, Pa., as “king of cubic zirconium” at QVC. Then there was the $1.85 billion bid to one-up Google with Ask Jeeves. One would be more likely to ask Google than Jeeves how that venture fared. But IAC’s stock is on an upswing since Mr. Diller successfully fended off a suit from cowboy billionaire John Malone in 2008 for spinning off properties like Ticketmaster and the Home Shopping Network into their own public companies.

Hearings in the copyright lawsuit, which begin at the end of this month, will determine whether Aereo will add to Mr. Diller’s legacy as an upstart, or end up the next Napster.

“Whatever,” was Mr. Diller’s response to the notion that Aereo’s future might rank on par with his past successes. “I don’t relate things one to the other.”

Mr. Kanojia at the Internet Week party (via Wire Image)

For a product that’s attracted so much legal heat, it’s perhaps fitting that Mr. Kanojia’s inspiration started with a lawsuit, he told The Observer early this month in the Park Avenue outpost of his PR company (Aereo’s Long Island City office is under construction).

Mr. Kanojia, who speaks with a polyglot post-colonial accent shared by many an Indian expat, sat cross-legged in an armchair. His Gérald Genta watch was a jump-hour, a wonkish call-back to his training as an engineer. But like his benefactor, Mr. Kanojia also has ties to the television world he is upending. His former company Navic Networks, which was purchased by Microsoft in 2008, produced a piece of software embedded in cable boxes.

“We would monitor viewers across millions and millions of homes,” he recalled. “What I really saw was a third of the households, give or take, watched broadcast only,” he said. Despite access to 500 channels and DVRs, “80 percent of the households only watched seven or eight channels.”

Then, Mr. Kanojia saw a way to provide those “pulse-of-life” broadcast channels from the cloud in a manner that followed the letter of the law. In 2009, the Supreme Court ruled that Cablevision was within its rights to move its DVR systems to remote servers, rather than have consumers store the programs they chose to record in their individual boxes. “A simple logical extension to me was: this content is broadcast for the consumer, ends up in the public airwaves, is part of the broadcast legacy. So if network DVR is legal why can’t we build a remote network antenna?”

When Aereo launched publicly in March in the New York market, the service billed itself as merely an upgrade on rabbit ears for the Internet era. Because users only access one antenna per viewing session, the company argues it’s a “private performance,” allotted to every citizen in exchange for the broadcaster’s access to the public airwaves.

Network sources view it differently. “They’re stealing the content!” one executive told The Observer. “It’s baloney, it’s a rationalization of pure theft.”

The plaintiffs argue that Aereo is more of a cynical legal ploy than a technological innovation—and that Aereo puts the networks’ very existence in jeopardy by cutting into advertising dollars, retransmission fees and their own ability to monetize the Internet. The case has echoes of a similar argument Jack Valenti, former head of the Motion Picture Association, leveled against the VCR, comparing it to the Boston Strangler. In that landmark Supreme Court trial, referred to as “the Betamax case,” Fred Rogers, he of the cabled cardigans and neighborly wisdom, testified in favor of innovation. “Very frankly, I am opposed to people being programmed by others,” he said. “I just feel that anything that allows a person to be more active in the control of his or her life, in a healthy way, is important.”

But in Aereo’s case, even Mr. Rogers’s own network is siding with the plaintiffs. In filings for the lawsuit, declaration after declaration from studio execs insinuates that Aereo could mean the end of beloved content and the networks’ ability to offer it for free over the airwaves. NBC’s declaration made threatening remarks about Sunday Night Football; PBS, a nonprofit, bemoaned the future of Great Performances.

“I don’t believe that for a second. I’ve heard that literally going back 40 years,” Mr. Diller said. “It used to be argued, by networks—I was at one when I started in the ’70s—that cable was the biggest threat to networks survival. So I don’t think the argument is valid."

Not that it surprised him. “Any incumbent in any area,” he added, will wield “pitchforks to protect their incumbency.” Asked how he would have responded, were he still head of a network, he said, “Exactly as they are. I understand why they would make arguments about diminished programming, because it’s such a populist concept. I just don’t think it’s got any basis in reality.”

Network sources intimate that Mr. Diller, who made his name in programming, should know better. But it’s a sensitive topic. Asked about Aereo at a recent executive breakfast at the Pierre Hotel hosted by The Wall Street Journal, Disney/ABC Television Group president Anne Sweeney curtly declined to comment.

But Mr. Greenfield, the BTIG analyst, sides with Mr. Diller. “This should lead to people watching more television, not less. Advertising should benefit. It does attack retrans, but retrans didn’t even exist in terms of dollars until a few years ago, so I find it hard to believe it would destroy them,” he said. The reason networks cling so desperately to retrans fees is because they represent a growing source of revenue with “no cost attached to it,” Mr. Greenfield added.

Mr. Diller also downplays the effect to networks’ bottom line. “Well, first of all, I don’t think Aereo presages the end of retransmission fees,” he said. “It may affect the absolute amount, but the amount is going to be large regardless of Aereo.”

The real impact, he noted, will be in increased video consumption online. “It will lead to more à la carte viewing, not packaged viewing. And I think that is an alternative many people would like.”

Still, it’s not as though Mr. Diller is entirely devoid of concern for his former colleagues in the broadcast world. “If I felt that they would lose revenue, in a material way, of course I would be sympathetic,” he said, surprising us with a benevolent tone. “I want them to get as much revenue as possible.” After all, he pointed out, IAC is also in the business of content creation. “We make programs we want them to pay for.”

-ntiku@observer.com

A version of this story appeared in the May 23, 2012 issue of The New York Observer. 

#livestreamz

Two sets of New York-based broadcast TV stations filed complaints yesterday against Aereo, a new startup that streams live TV from major networks like CBS, NBC, FOX, ABC, CW, and PBS, as well as other local channels to any mobile device. The lawsuits, which ask for injunctive relief and damages, argue that Aereo rebroadcasts their TV programming without licensing or consent. (The fact that Aereo, which launches March 14th, charges only $12/month probably doesn't sit well with them either.)

As AllThingsD's Peter Kafka explained, Aereo knew these copyright challenges were coming, which is partly why the company recently raised a sizable $20.5 million series A round led by IAC, with participation from existing investors like FirstMark Capital and First Round Capital. Aereo's position is that its service is legal because the company issues every user their own (thumbnail-sized) antenna, stored in a local warehouse. By structuring it that way, they claim that it's consumers accessing the content, not Aereo.

The company emailed Betabeat the following response to the complaint, which they also posted on the Aereo blog (emphasis ours):

"Today, two groups of broadcasters filed two separate federal lawsuits against Aereo in the Southern District of New York claiming that Aereo will infringe their copyrights by making available technology which enables consumers to access broadcast television via a remote antenna and DVR.  Aereo does not believe that the broadcasters’ position has any merit and it very much looks forward to a full and fair airing of the issues.

Consumers are legally entitled to access broadcast television via an antenna and they are entitled to record television content for their personal use. Innovations in technology over time, from digital signals to Digital Video Recorders (“DVRs”), have made access to television easier and better for consumers.   Aereo provides technology that enables consumers to use their cloud DVR and their remote antenna to record and watch the broadcast television signal to which they are entitled anywhere they are, whether on a phone, a tablet, a television or a laptop.

Aereo looks forward to its upcoming product launch as well as a prompt resolution of these cases."

In one of the complaints, the plaintiffs include WNET, Thirteen, Fox Television, WPIX, PBS, Univision, and more. Pro-tip, broadcasters: You can't litigate your way out of the future. Aereo, on the other hand, has been aggressively courting New Yorkers (when it launches, the service will only be available in the city) and techies with recent events at General Assembly and Hotel Williamsburg.

How I Live-Streamed Your Mother

A magical thing happened at IAC's headquarters this morning. A startup called Aereo displayed the most compelling argument for cord-cutting we've heard in awhile. It came in the form of a thumbnail-sized HD antenna. Sign up with Aereo and users get the right to license their own antenna, which are stored in a local warehouse. Then, log on via any web-enabled device (smartphones, iPads, even AppleTV) and ta-da, members can access major networks like CBS, NBC, FOX, ABC, CW, and PBS, as well as other local channels. Better yet, you also have the ability store up to 40 hours of programming on their remote DVR.

"No cords or cable required," the company's press release says pointedly. The service is limited to New York City right now, but only costs $12 a month. Throw in a Netflix account, Hulu, and you're probably good to go. Happy Valentine's Day, Dying Cable Industry!

Aereo (formerly called Bamboom Labs) also anounced a $20.5 million series A round led by IAC.

The startup previously raised $4.5 million. Existing investors, including FirstMark Capital, First Round Capital, High Line Venture Partners, Highland Capital Partners and individual investors also participated in the series A. Along with the funding,  IAC chairman and Fox network creator Barry Diller joined Aereo's board.

As Mr. Diller told Media Decoder, Aereo's device represents a significant step in wrenching content from the “closed cable-broadcast-satellite circle.”:

“Anyone will tell you, whether it’s Amazon or Hulu or Apple, that they can’t get enough programming that people want to see to –so to speak, ‘break the chain’ — because all of the programming is controlled within the circle,” Mr. Diller said in a telephone interview.

Aereo founder and CEO Chet Kanojia, formerly of Navic Networks, seems up to the task. In addition to selling Navic to Microsoft in 2008, he also completed "doctoral-level work on the commercial applications of artificial intelligence." (Hmm, perhaps that DVR could use a recommendation engine?)

The company says membership is subject to availability, but beginning March 14th, members will be eligible for a 30-day free trial. For now, it's just working on iOS devices, but Aereo says in the next six weeks "anything that's web-enabled" will work. Please excuse us, we have to go sign up and see whether this new toy actually works in the bowels of Brooklyn.