• TV-over-Internet service continues to expand
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     | May 15,2013
     
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    A screenshot from the iPad showing Aereo.com streaming “Bob the Builder” on New York’s PBS station, WNET 13. Aereo is a startup that offers television stations over the Internet starting at $8 a month.

    NEW YORK — Aereo, the startup that offers live television broadcasts over the Internet starting at $8 a month, said it will start service in the Atlanta market on June 17, following an expansion to Boston on Wednesday.

    Until this week, the service had been available only in the New York City area.

    Aereo said Tuesday that it will offer 27 Atlanta-area broadcast channels, plus the Bloomberg TV cable channel. Service will be limited to residents of 55 counties in Georgia, Alabama and North Carolina. Those who had pre-registered will be able to start using Aereo on June 17. Others will be eligible a week later.

    Aereo converts television signals into computer data and sends them over the Internet to subscribers’ computers and mobile devices. Subscribers can watch channels live or record them with an Internet-based digital video recorder. They can pause and rewind live television, just like using a DVR.

    Aereo sells its service as a low-cost alternative to cable or satellite TV, and it plans to target those who have dropped pay-TV service or never had it. Aereo offers far fewer channels than most pay-TV packages, but it could appeal to viewers who already turn to Hulu, Netflix and other online sources for TV shows and movies.

    Broadcasters see Aereo as a threat to their revenue, even though stations already make signals available for free. Broadcasters are increasingly supplementing advertising revenue with fees they get from cable and satellite TV companies for redistributing their stations to subscribers. If customers drop their pay-TV service and use Aereo instead, broadcasters lose some of that revenue.

    The latest Aereo expansion came as ABC said it will offer live online feeds of local stations in some markets. The feeds are available for free starting Tuesday until June 30 to everyone in the New York and Philadelphia areas. After that, they will be limited to subscribers of certain cable services.

    A cable subscription isn’t required to use Aereo. Rather, Aereo charges a separate monthly fee.

    So far, federal courts have ruled against broadcasters’ claims that Aereo’s service constitutes copyright infringement. Aereo claims what it is doing is legal because it has thousands of tiny antennas at its data centers and assigns individual subscribers their own antenna. According to Aereo, that makes it akin to customers picking up free broadcast signals with a regular antenna at home. Broadcasters argue that the use of individual antennas is a mere technicality meant to circumvent copyright law.

    Although the latest ruling will likely be appealed, broadcasting companies have already threatened to take their stations off the air. The Fox and Univision television networks are among those that say they might end their free broadcasts and become a subscription-only channel like CNN, Nickelodeon and Discovery. CBS Corp. has threatened additional lawsuits.

    Tuesday’s expansion announcement came one day after Aereo eliminated discounted annual plans. In the past, subscribers could pay $80 a year for a plan with 40 hours of storage. That plan normally cost $12 a month, or $144 for the year. Aereo also eliminated a $1 day pass. The main, $8-a-month plan remains with 20 hours of storage. The $12-a-month plan now comes with 60 hours, rather than 40.

    The Barry Diller-backed company announced in January that it plans to expand beyond New York to 22 additional U.S. markets. Boston and Atlanta represent the first metropolitan areas outside New York. Others expected in the coming months include Chicago, Philadelphia and Washington.

    ABC, meanwhile, will expand its live stream service to six other markets where it owns stations: Los Angeles; San Francisco; Fresno, Calif.; Chicago; Houston; and Raleigh-Durham, N.C. In addition, ABC has reached a deal with Hearst Television to offer the service in Hearst markets, too. They include Boston, Pittsburgh, Kansas City and Milwaukee.

    The service will also be limited to certain cable subscribers in those markets. ABC, which is owned by The Walt Disney Co., has deals with Comcast Corp., Cablevision Systems Inc., Cox Communications Inc., Charter Communications Inc. and AT&T Inc.’s U-verse.

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