When it comes to the media industry, IAC/InterActiveCorp (NASDAQ:IACI) Chairman and Senior Executive Barry Diller is a legend. During his career, he created the Fox network, launched USA Broadcasting, built QVC and even created the “Movie of the Week” for ABC.
Now, he’s bullish on Aereo, which allows people to access live broadcast television from their Apple (NASDAQ:AAPL) iOS devices, Roku boxes and web browsers. Diller has joined the board and invested in the company.
The business model is subscription-based, starting at $8 per month. There’s not much scale, either — the service is only available in New York, though it will be rolled out in the next few months to 22 other cities including Boston and Miami.
But the kicker for Aereo’s service: The content is essentially free. Aereo essentially just sets up miniature antennas to pick up broadcast signals, which are then streamed online to its customers.
Naturally, the traditional media operators — like Disney (NYSE:DIS) and Comcast (NASDAQ:CMCSA) — are not happy with this and have already filed copyright infringement suits. But $38 million raised from IAC/InterActiveCorp and Highland Capital Partners means Aereo has the resources to fight back.
In a blog post, here’s what Aereo founder and CEO Chet Kanojia had to say:
“Major broadcast companies are trying very hard to put Aereo out of business. But, the dispute goes far beyond the fate of one company. What is at stake is whether a consumer’s right to access broadcast television for free, via an antenna and to record that content for private use, is still meaningful. If consumers cannot take advantage of current and innovative technology, that right becomes hollow.”
Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of “How to Create the Next Facebook” and “High-Profit IPO Strategies: Finding Breakout IPOs for Investors and Traders.” Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.