One-Time Cable Alternative Aereo Goes Bankrupt

Company couldn't survive Supreme Court loss
By Newser Editors and Wire Services
Posted Nov 21, 2014 4:13 PM CST
One-Time Cable Alternative Aereo Goes Bankrupt
Chet Kanojia, founder and CEO of television-over-the-Internet service Aereo.   (Bebeto Matthews)

Aereo, an online startup that tried to offer a cheaper alternative to cable TV, has filed for Chapter 11 bankruptcy protection less than five months after an unfavorable ruling by the Supreme Court. The company backed by media mogul Barry Diller allowed people to watch and record broadcast TV online for $8 a month on tablets, phones, and other gadgets. Unlike Hulu and other online video services, Aereo offered live streaming of broadcast channels. The court, however, ruled this summer that Aereo had been operating like a cable TV company, meaning that unless it paid broadcasters licensing fees, it was in violation of copyright law.

Aereo didn't provide many details about what it would do with its technology, but CEO Chet Kanojia said previously that the company's Internet-based recording technology was itself valuable. "The fact that we've created this cloud-based system at a cost point, and it works, is going to have a lot of value to a lot of people." In an interview with TechCrunch today, Kanojia suggests that cable companies shouldn't get too comfortable. "It's inevitable that cord cutting is going to happen," he says. "There are immediate opportunities and there are even bigger opportunities in the future to serve consumer need, and that won’t come from incumbents. Their business model won’t permit it." (More Aereo stories.)

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