IAC Chairman Barry Diller defends Aereo Internet TV service

IAC Chairman Barry Diller launched into a spirited defense of the controversial Aereo Internet TV service, which will expand to 22 markets in the coming months -- even in the face of lawsuits from major media companies.

The service -- which uses tiny antennas to capture broadcast TV signals and deliver them to the home, via the Internet -- is akin to consumers going to Radio Shack or Best Buy to buy an old-fashioned TV antenna, Diller said in remarks at the All Things Digital technology conference in Rancho Palos Verdes.

It’s not about charging subscribers for free over-the-air broadcast signals, Diller said. Rather, it’s creating a Web TV offering that targets a generation of consumers who don’t want to pay a cable or satellite TV distributor for expensive bundles of programming they don’t watch.

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“I don’t want to go beat up broadcasters,” Diller said. “I want to help move the centricity from fixed line or satellite closed systems to open Internet systems.”

Aereo launched in New York City in spring 2012, offering subscribers 20 broadcast channels and 40 hours worth of remote recording for a monthly fee of $12. It has since expanded its program offerings and the markets where the service is available, which now includes Boston and next month will reach Atlanta.

Meanwhile, CBS, News Corp., Comcast, Walt Disney Co. and other owners of broadcast companies have sued Aereo, contending the Web-TV company violates their copyrights. The legal dispute is ongoing.

Aereo investor Diller said the service is founded on the premise that the status quo, in which pay-TV distributors control access to programming, is going away. Television, over time, will reach viewers via the Internet, he said.

“I don’t think closed systems in our world, today or tomorrow, are going to hold,” Diller said. “I certainly think that, of course, they’re going to be defended, and ideas like TV Everywhere and all sorts of other concepts that try desperately to keep that closed money circle going.”

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CNN Worldwide President Jeff Zucker defended the system whereby the broadcast networks get paid for their programming.

“If you’re offering that in a way that they’re not getting paid for it, that’s an issue,” said Zucker, a longtime network executive and former chief executive of NBCUniversal. “That’s the rub. If they don’t get paid for it, they’re not going to be able to provide their content.”

Diller said the broadcast networks have long paid for programming through advertising; noting that only in recent years have ABC, CBS, NBC and Fox begun collecting a subscriber fee.

“The quid pro quo for getting their license [is] they would broadcast directly to consumers and charge advertising for it,” Diller said. “If their audience grows by virtue of what we’re doing, then their ad revenue grows.”

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