Aereo considers expansion into subscription video

Internet television startup Aereo is considering making a move toward offering subscription-based video content, which could be a tremendous source of recurring revenue, according to Multichannel.

The Houston Chronicle reports that online subscription video services are more popular than ever. With offerings like Netflix, Hulu Plus and Amazon Prime, Aereo would have its fair share of competitors if it chose to enter the marketplace. The news source reports that this entertainment method is increasingly popular due to the fact that practically any electronic device – including computers, smartphones, video game consoles, set-top boxes such as Roku or Apple TV and even network-enabled dvd players – can run the subscription video services.

The company currently offers a service in New York City that provides live and digital video recorder (DVR) access to 28 local TV channels that is then delivered through the internet. The service uses small antennas dedicated to individual subscribers and mounted on rooftop arrays.

The company’s current pricing plans offer users a subscription payment format that allows them cost-effective access to free over-the-air TV accessed through the internet. Customers can sign up for $1 a day for three hours of DVR storage, $8 per month for 20 hours, $20 per month for 40 hours and $80 per year for 40 hours of storage. While currently dependent on 28 broadcast channels, including several major networks such as NBC, FOX and CBS, the company is considering branching out into subscription-based video content.

“We have no desire to recreate the cable business…from a wholesale-cost perspective,” Aereo CEO Chet Kanojia said in an interview with Multichannel. “There’s a bunch of viewers who like the idea of broadcast with online content…The value/price equation [of pay TV] is absolutely skewed. I think any and all other alternatives that come in that are legitimate of consumer choice and mindful of copyright issues are good for growth.”

Kanojia also stressed that Aereo is not a subscription television provider, but rather a technology company. Instead of selling programming, the company provides access to a cloud infrastructure. One of the biggest assets to Aereo keeping their prices affordable is the relatively low costs of the cloud infrastructure that the company operates on, according to the news source.

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The Forrester Wave: Subscription Billing Platforms, Q4 2015

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