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Diller: Aereo Is ‘Finished’ If It Loses Supreme Court Battle

Should it prevail, the company will expand to top U.S. markets

Barry Diller Photo: Getty Images

Should Aereo lose its impending U.S. Supreme Court case, backer Barry Diller believes it’ll be game over for the upstart distributor.

Speaking to anchor Erik Schatzker during an appearance on Bloomberg Television’s Market Makers, the IAC chairman and Aereo’s most visible investor said a defeat in the highest court in the land would all but doom the company.

“If we lose, we’re finished,” Diller said. “It’s very possible that there’s some salvage. But Aereo would probably—as I say, probably, just because I can’t … I can’t see any path forward. It probably would not be able to continue in business.”

Knuckling under and paying broadcasters to distribute their signals simply isn’t part of Aereo’s business model, Diller added. “We could probably pay retransmission consent, uh, dollars, if we could make a deal with broadcasters; we probably could, but the value proposition would go out of the game,” Diller said, “because Aereo is a low-cost method of receiving over-the-air broadcasting. That’s the platform.”

Low-cost is an understatement. Aereo charges a mere $8 per month for its online TV and DVR service, which is currently available in 11 U.S. markets. And while that may be a boon for consumers who are fed up with forking over 20 times that amount for cable or satellite service, broadcasters argue that Aereo is effectively playing Robin Hood with their signals.

Should Aereo prevail—and it’s anyone’s guess as to how the Court will rule—the company will continue to invest in its westward expansion. It may also kick the tires on developing its own original content, a la Netflix and Amazon. “If Aereo does get to a sufficient subscriber level, we’ll probably offer other programming alongside the broadcast programming,” Diller said.

Opening arguments are scheduled to be heard on April 22. Earlier today, Aereo CEO and founder Chet Kanoji reiterated that he was confident his company will prevail.

Thus far, IAC and other investors have sunk $92 million in Aereo, which is live in New York, Boston, Atlanta and Miami, among other select DMAs. Diller said if the company comes away with a win in court, Aereo will expand to the top “30 or 40 markets.”

After stringing together a number of wins in lower courts, Aereo in February took one on the chin in Utah when a district court judge imposed a preliminary injunction against the startup.

While the legal battle promises to get ugly, Diller said he feels no animosity for his broadcast antagonists. The media mogul even gave a tip of the hat to CBS Corp. CEO Les Moonves, who has been Aereo’s most vocal detractor.

“So long as narrative is alive, so long as programming is alive, Les Moonves will win,” Diller said. 

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