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IAC Chairman Diller Sees Aereo TV Service in Up to 100 Cities Within Year

Barry Diller, the billionaire chairman of IAC/InteractiveCorp. (IACI), expects his Aereo Inc. Web- based television service to be in 75 to 100 cities within a year after making its debut this week in New York.

Aereo, a $12-per-month service that lets users access broadcast TV on mobile devices, will begin telecasting on March 14. The company wants to expand rapidly after that, Diller said yesterday in a keynote address at the South by Southwest Interactive festival in Austin, Texas.

For the service to get off the ground, it has to beat back efforts by Walt Disney Co. (DIS)’s ABC and other networks, which said earlier this month that Aereo would violate copyright laws. The networks said that Aereo is “circumventing” the distribution system and should be blocked.

Diller said efforts to block the service are “absolutely predictable,” because media companies always try to protect their turf.

“I completely understand their motivation,” he said. “It’s going to be a great fight.”

Aereo, based in Long Island City, New York, is backed in part by IAC/Interactive. The company received $20.5 million in financing on Feb. 14, with contributions coming from venture capital firms including FirstMark Capital and First Round Capital.

The service is delivered via quarter-inch antennas that are placed in data centers. The technology uses the existing broadcasting signal in any given city and lets consumers bypass the costs of monthly cable or satellite service.

“Behind that simplicity is a lot of technology,” Diller said.

Aereo responded to the broadcasters’ complaints today, calling the lawsuits “meritless.” The company said its business is lawful and that it’s based on users’ rights to access broadcast television, record it for personal consumption and use remotely-located equipment.

IAC/Interactive fell less than 1 percent to $48.24 at the close in New York today. The stock has jumped 60 percent in the past year, compared with a 5.8 percent gain for the Standard & Poor’s 500 Index.

The cases against the company are American Broadcasting Companies v. Aereo, 12-1540, and WNET v. Aereo, 12-1543, U.S. District Court, Southern District of New York (Manhattan.)

To contact the reporter on this story: Ari Levy in Austin at alevy5@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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