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Aereo Pushes Public-Interest Case With Free Internet TV Offer

8/02/2012 12:17 PM Eastern

Aereo, fresh off a legal victory over major TV broadcasters, is offering consumers in its initial New York City market free streaming access to 28 channels for a continuous one-hour period every day and has introduced new pricing plans starting at $1 per day.

The new "Try for Free" option and pricing structure from the startup, whose backers include IAC's Barry Diller, comes three weeks after a federal district court judge denied a motion for a preliminary injunction against Aereo filed by a group of 17 network broadcasters.

The move appears aimed at showing Aereo serves the public interest by offering consumers access to free TV, according to BTIG Research senior analyst Rich Greenfield.

In her July 11 ruling, Judge Alison Nathan of the U.S. District Court for the Southern District of New York noted that "Aereo is a business and does not provide ‘free' access to broadcast television" in considering whether there was a public interest rationale for rejecting the injunction sought by broadcasters. Judge Nathan's decision relied on a previous appeals court ruling that Cablevision Systems' RS-DVR service did not violate copyright laws.

Aereo interface"While Aereo prevailed, despite not serving the public interest, we suspect its ongoing court case will be strengthened by helping consumers access public broadcasting signals at no cost and with no credit card required," Greenfield wrote in a blog.

In a statement, Aereo said that it "believes that consumers have a fundamental right to access over the air television that broadcasts on the public airwaves, and that enhancing and supporting public access to that local broadcast signal is important.... In times of emergencies and breaking news, access to timely, live information is crucial. Aereo can serve as another avenue for the public to access that important information."

The broadcasters that sued Aereo for copyright infringement, including WNET, Fox Television Stations, Twentieth Century Fox Film, WPIX, Univision and PBS, have appealed the ruling denying their request for an injunction.

Aereo uses dime-size antennas, mounted in a rooftop array, that are dedicated to individual subscribers -- allowing it to argue that the service is similar to Cablevision's Remote Storage DVR, which dedicates disk storage in the cloud for each subscriber. The broadcasters assert that Aereo's service amounts to retransmission that the startup is subject to the same retrans rules cable, satellite and telco TV operators are.

Aereo membership is currently only available to residents of New York City, and its "Try For Free" feature is only available to people physically present in New York. Executives have said they intend to launch Aereo in other markets in 2013.

Aereo's original $12-per-month option includes 40 hours of DVR storage. The company now offers three additional plans: $1 per day with three hours of storage; $8 per month for 20 hours of storage; and $80 per year for 40 hours of storage. The pricing plans do not include sales tax.

"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," Aereo CEO Chet Kanojia said in a statement. "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."

Added Kanojia: "Our pricing is designed to work with the consumer -- not against them."

Aereo markets its service as an alternative to pay-TV service, with the tagline, "No cable needed."

In New York City, Aereo currently offers 28 broadcast channels available over-the-air, including major networks such as WABC, WNBC, WCBS, WNYW-FOX, WPIX-11, WNET-PBS, and PBS Kids; special-interest channels such as NYC.GOV, NYC-LIFE, Ion and Qubo; and foreign language broadcast channels such as Telemundo, Azteca, Telefutura, Univision, Sinovision, NTDTV and CGN-TV.

The Aereo service currently provides users access to live and recorded TV via iPads, iPhones, Safari browsers on MacBook, Apple TV set-tops and Roku boxes. The company expects to introduce additional device support, including PCs and Android devices, later this summer.

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