Aereo to expand to Chicago, Philadelphia and 20 other cities

IAC, Highland Capital lead $36 million Series B funding round in Internet video startup
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Aereo said it will build antenna arrays to deliver local TV signals to Web users in 22 cities this year, including Chicago, Philadelphia, Dallas, Atlanta and Washington, D.C.

The company, which last March launched an Internet video platform in New York that delivers 20 local TV stations via HTML5 to customers using smartphones, tablets and other devices connected to the Internet, said it raised $36 million in Series B financing led by Barry Diller's IAC and Highland Capital Partners.

Diller said last March that Aereo would expand to 75 to 100 cities in one year. While Aereo isn't expanding as rapidly as originally expected, its move could have an impact on TV station owners negotiating retransmission-consent agreements with pay TV providers. Aereo announced at the Consumer Electronics Show that it would also launch service this year in Miami, Austin, Houston, Baltimore, Detroit, Denver, Minneapolis, Pittsburgh, Tampa, Cleveland, Kansas City, Raleigh-Durham, N.C., Salt Lake City, Birmingham, Ala., Providence, R.I., and Madison, Wis.

Aereo uses arrays of dime-sized antennas to capture free over-the-air signals from local TV stations. It charges customers plans that cost as low as $1 daily or $8 monthly to watch local broadcast programming and store shows on a cloud-based DVR.

With broadcasters demanding that cable operators and satellite TV providers pay increased retransmission-consent fees, Aereo's expansion could make it more difficult for stations to threaten to pull their signals from pay TV providers in order to extract those increased fees.

NBC, CBS, Fox and 14 other broadcasters have accused Aereo of copyright infringement. But a U.S. District Court denied a request from the broadcasters last July to issue a preliminary injunction that could have forced Aereo to shut down until the case is resolved.

Aereo, which is led by Navic Networks founder Chet Kanojia, has not disclosed how many customers have signed up for its service in New York.

For more: 
- see the release

Commentary: Aereo could help cable operators bring broadcasters to their knees

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