New York’s Aereo Raises $34 Million Series C, Faces Supreme Court

Aereo Supreme Court

TV streaming company Aereo announced this week that it had raised an additional $34 million in funding. Current investor IAC led the round, with participation from Gordon Crawford, Himalayan Capital Management, and others.

Aereo operates by setting up a data center in each of its cities, equipped with tiny antennae that receive and record free broadcast TV signals. Users essentially license an antennae, paying $8-12/month to stream free TV shows to any of their devices.

“Aereo experienced tremendous growth in 2013, and we expect 2014 to be another blockbuster year,” CEO Chet Konojia said in a statement. “Last year at this time, Aereo was launched in only New York City. Today Aereo is available in 10 markets and will grow to 15 by the end of the quarter…Aereo has scaled very quickly in 365 days and this additional funding will allow us to maintain this rapid pace of growth. We are thrilled to have a world-class group of investors who believe innovative, cloud-based technologies, like Aereo, are the future.”

It’s true that Aereo has scaled pretty quickly for a company that’s basically charging people for free TV. They’re in major cities all over the country, including Miami, Atlanta, Boston, and Denver.

They’re also having a hard time staying out of the courts.

It turns out that broadcasters don’t like having their signals stored in another company’s centers and redistributed via the cloud. Aereo gets around this by housing thousands of tiny antennae in its data centers and “licensing” them to individual users. In essence, it works just like a DVR, but in the cloud and to any device you have.

So far, the courts have ruled in favor of Aereo, but on Friday the Supreme Court will hear the case broadcasters are bringing against them.

$34 million on Monday. Supreme Court on Friday.

That’s one hell of a week.

Not that legal troubles seem to slow growth for many ambitious startups. Airbnb and Uber have both had their share of legal woes, but nobody can deny the explosive popularity of both services. Founders of disruptive startups take court appearances as a matter of course, and it often provides good media coverage for them. Aereo’s Konojia is no different.

No, legal issues aren’t the biggest hurdle Aereo needs that $34 million to jump. With Apple TV, Chromecast, AIRTAME, Hulu, Netflix and even direct competitor Nimble TV all trying to reinvent the way we watch TV, there is plenty of competition out there.

Not that healthy competition ever stopped a determined entrepreneur either.

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Aereo Founder & CEO Chet Kanojia On Why People Love It [VIDEO]

Aereo,Chet Kanojia, Chicago Techweek, Startup

Chet Kanojia, the founder and CEO of controversial TV startup Aereo, appeared at Chicago Techweek on Thursday in a fireside chat called “TV Broadcasting: Who Is Controlling The Remote.” BTIG Managing Director Rich Greenfield led the discussion on topics pertaining to disrupting the world of TV.

This was a very fitting topic considering that TechWeek kicked off with a screening of the movie Downloaded, a documentary that takes a look at the rise, fall, and influence of Napster, written, produced and directed by Alex Winter of Bill & Ted’s Excellent Adventure fame.

Like music, the TV industry has had a lot of competition in recent years. NetFlix, Hulu, Sling, and several other companies have disrupted the world of watching television with rabbit ears or a simple coaxial cable into the side of your home. Highspeed internet, DVRs, TiVo, and satellite TV have contributed to that disruption as well.

So far most of the startups and new companies in the television space have centered around streaming cataloged content, with Hulu typically having the freshest of catalog content offerings. Some of the networks that have an ownership interest in Hulu can have their newest show episodes on the site the very next day.

Now Kanojia’s company Aereo is disrupting TV by offering broadcast television via the web in a streaming format which users can record and playback. Kanojia explained that it’s based on the fact that every American is entitled to antenna TV service, but “no one specifies what kind of antenna or how long the cord is.” It’s also based on the fact that recording television for private use dates back 30+ years, since the Betamax days.

Aereo has found itself facing some stiff lawsuits, which Kanojia was quick to point out, the startup is winning.

In the video below Kanokia explains the two keys to their success with their customers: simplicity and unbundling. Earlier in the day Kanokia used TechWeek as the venue to announce that Aereo’s next city will be Chicago, and the service will begin in September.

For more on Aereo click here. and watch the video below.

More startup coverage from Chicago TechWeek is here.