Aereo CEO Chet Kanojia Says Company Selling Out Capacity in Some Cities
Since launching nearly two years ago, Aereo has been a consumer success, CEO Chet Kanojia said at an annual investor conference Tuesday.
Appearing at the 41st annual UBS Global Media and Communications Conference, he said there's no need to do marketing for the company that streams over-the-air TV signals to consumers' digital devices when customer signups have the company dealing with capacity issues. "People ask, 'When are you going to start marketing?' I say, 'How can I do that when the first investments in capacity we are making are selling out?'"
Kanojia singled out Atlanta as a market that has been particularly hot for Aereo. But he said consumer traction has been hard to predict.
"It's utterly baffling," he said. "For example, Detroit is a strong market. I never thought Denver would be as strong as it is. I thought Miami would be great, but it hasn't been. New York was strange. It was a mediocre start for the first few months and since then has been a steady rise."
Aereo might not spend too much in marketing, but it has garnered a good deal of publicity from its fight with TV broadcasters. The major networks are suing the company for allegedly infringing their performance rights under copyright law. The broadcasters recently appealed a loss in the 2nd Circuit Court of Appeals up to the Supreme Court. Aereo is due to answer the cert petition later this week.
Being a controversial service isn't all bad.
Kanojia said it takes only 5,000 to 6,000 subscribers to break even in a given city. He won't specify subscriber numbers, nor which cities are profitable, but taking a question, he said that it was conceivable that Aereo would go beyond metropolitan areas to hit rural ones.
As for the legal disputes, Kanojia shrugged off threats by broadcasters to go pay-only.
"Broadcasting is probably the last mass market medium that is left," he said. "Twenty to 30 million people, are you going to abandon them and leave them out of the system?"