Aereo, a TV streaming service looking to change the way we consume media, has just sold out of capacity in New York City.
The company launched in 2011 with NYC as a pilot market, and has since expanded to 11 markets total. The service, much to the chagrin of major network broadcasters, acts as a remote, mini antenna, letting subscribers pull OTA TV signals out of the air and stream them live across any internet-connected device.
And if that wasn’t enough, users have the option to use Aereo as a remote DVR service for as low as $8 month.
That said, Aereo has worked tirelessly to ensure that this type of business is actually legal. In much the same way that it’s legal for an individual to use rabbit ears to access broadcast television, it’s legal for an Aereo user to rent out an individual Aereo antenna and access, or record, TV content.
However, a single antenna that sends a signal to multiple, separate users is illegal. In other words, Aereo needs one antenna available for every active user of the service, and at this point, there’s simply not any room left for new users in NYC.
Some have misreported that this is a product of power issues, though recent conversations I’ve had with founder Chet Kanojia suggest that Aereo has been trying to build out more capacity to keep up with subscriber growth.
For a startup, it’s not a bad problem to have. Though, if the company wants to foster growth in its first, and likely strongest, market, it will need to offer extended capacity as quickly as possible.
Broadcasters must be equally displeased by this news, considering that they’ve been bullying Aereo in the courtroom since the service launched. It started with a lawsuit in NY, which migrated to Boston, and again to Utah, until most recently the Supreme Court decided to hear the case and make a final, federal ruling.
Based on the track record, I predict Aereo will win in court and will lead the revolution as a stepping stone from bundled TV packages and middle men to an on-demand, TV consumption structure.
Here’s Aereo’s official statement on the matter:
We’re fortunate that Aereo continues to experience strong growth across all our markets. Our team has been working overtime to add more capacity in our existing markets. As soon as additional capacity is added, new consumers will be notified that they can sign up and create an Aereo account.