Barry Diller Says Aereo Isn’t About Charging For Something That’s Free, But About Moving TV To IP

Aereo investor Barry Diller says that the company isn’t about taking free, over-the-air signals and charging for them, but is instead about moving TV from a closed system to IP. At the D11 Conference today, Diller defended the company’s plans to build a more open video distribution platform.

Diller said that what Aereo charges for isn’t that different from going to your local Radio Shack and buying an antenna to receive free, over-the-air TV signals. But just because Aereo charges for something that is available on an over-the-air signal, doesn’t mean that he wants to take revenues from broadcasters — Diller says that they will still make money from advertisers.

“I don’t want to beat up broadcasters… I want to move from closed systems to Internet systems,” Diller said. “The more you can get video to IP, the better it will be.”

When asked if that has the potential to break up the cable bundle, Diller said that he expects the current system to bust on its own. That’s a result of a system where he says about 90 percent of households end up paying so that 10 percent can watch ESPN.

“The idea of you paying thousands of dollars a year for a package of cable channels that you don’t watch, it doesn’t make any sense,” Diller said.

(ESPN later issued a rebuttal to those numbers, claiming that 88 percent of households receiving ESPN networks tuned in to one or more of those networks in the fourth quarter.)

Aereo still doesn’t have that many subscribers, Diller acknowledged, but he says the company just getting started. “We have very few [customers] because we just started marketing,” Diller said. But soon the company will be spreading out to 22 cities in the next 6-8 months. More than that, it hopes to begin offering non-broadcast content through its service as well. That could include its own original content, if it gets to enough homes passed.

At the same time that Diller is backing his own innovative video startup, he says there’s a lot of excitement happening thanks to streaming services like Netflix and new distribution platforms like Microsoft’s Xbox.

“I think it’s exciting that there’s going to be some creative disruption,” Diller said. “For the first time, you could seamlessly hook up a large screen to the Internet and get these [streaming] services.”