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Aereo Preps San Antonio, Hits Capacity in NYC

Mari Silbey
2/3/2014
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Call it a good news/bad news situation. Over-the-top video provider Aereo has announced plans to launch its service in the Greater San Antonio region on February 19, but is has put a halt to its customer expansion plans in New York City -- at least for now.

The upcoming launch will cover 2.2 million consumers in 22 counties across Texas, with potential customers able to pre-register now.

For those wanting the sign up for the service in New York City, though, the wait will be longer, as Aereo has officially run out of capacity in New York City and says it won't add any new customers in the region until it can remedy the situation.

Following a story on DSLReports, Aereo Inc. 's CEO Chet Kanojia confirmed the problem on Twitter, noting: "Yes we are sold out. Will reopen as we get more capacity deployed."

New York was the first market to go live when Aereo launched its controversial cord-cutting TV service nearly two years ago. The company collects over-the-air television signals and streams them back to customers over the Internet. While the company doesn't disclose its subscriber numbers, The Wall Street Journal (subscription required) reported in October that it had signed up between 90,000 and 135,000 customers in the New York metro area. Aereo is also deployed in ten other markets, and plans to launch in four more cities this month.

The Journal also shined a light last fall on the electricity challenges Aereo faces in powering thousands of tiny TV antennas. However, a spokesperson confirmed to DSLReports that electricity is not a factor in the decision to stop accepting new customers in New York. According to the company representative, the current situation is "strictly a capacity issue… We've had strong growth, so we're working to add more capacity to serve more consumers."

Aereo's capacity woes come as the company gears up to defend itself in front of the Supreme Court this spring. Aereo will face off against broadcasters who claim it is breaking the law by not paying retransmission fees for television content. Aereo's Kanojia, however, argues that not only is the company not skirting the law, but that its battle is really with pay-TV providers that want to protect their cable bundles, rather than with broadcast networks. (See Aereo CEO Trashes Pay-TV Model.)

Said Kanojia last month: "I don't think there's a whole lot of business in selling 500-channel packages of video services to people who don't want them… I don't think the future is selling 50 Viacom channels to people."

On the positive side for Aereo, the company raised another $34 million in January, which brings its funding total close to $100 million. Perhaps it can use that extra cash for some capacity upgrades. (See Aereo Plans Faster Growth Amid Legal Drama.)

— Mari Silbey, special to Light Reading

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wanlord
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wanlord,
User Rank: Light Sabre
2/12/2014 | 1:23:14 PM
Re: Myhui
Myhui, I believe I have somewhat said that in my many rambling posts on a few Aereo articles. I mentioned capacity regarding hardware, real estate, power, bandwidth, opportunity to oversubscribe, redudant reception centers, etc. 
myhui
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myhui,
User Rank: Moderator
2/10/2014 | 5:34:56 PM
Re: Myhui
This whole idea from Aereo simply doesn't scale cheaply, so I am surprised no one has pointed it out so far.
wanlord
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wanlord,
User Rank: Light Sabre
2/5/2014 | 2:16:13 PM
Re: Myhui
Okay, the bullet points said "we" which led me to believe you were somehow associated with Aereo. 
brookseven
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brookseven,
User Rank: Light Sabre
2/5/2014 | 11:35:28 AM
Re: Myhui
 

No, I don't work for Aereo.  Easily stated argument.

seven

 
wanlord
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wanlord,
User Rank: Light Sabre
2/5/2014 | 10:52:33 AM
Re: Myhui
So Brookseven works for Aereo?
wanlord
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wanlord,
User Rank: Light Sabre
2/5/2014 | 10:51:27 AM
Re: Myhui
Because you can still get around the legalities legalities of the retransmit consent by only allowing one user to use a single physical antenna at one time. When you take one antenna and receive the signal and then retransmit to more than one user at the SAME TIME, you are essentially doing what the Cable Companies do. The challenge is not to oversubscribe too much that you deny a paying user access to a stream if they are all being used during a popular event. 
brookseven
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brookseven,
User Rank: Light Sabre
2/5/2014 | 10:49:37 AM
Re: Myhui
Myhui,

The whole point of Aereo from a legal standpoint is:

1 - Users can hook up their own OTA antennas and receive signals for free.

2 - We are simply placing these antennas in a more convenient location and renting the space.

3 - Since the customer is receiving the signal on his own antenna there is no difference between what a customer can do and what we do.

4 - In essence you can think of us as a really long and complicated cable between your antenna and your TV.

It is the ownership and replication of your personal antenna that is the crux of the argument.

seven

 
myhui
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myhui,
User Rank: Moderator
2/5/2014 | 10:38:08 AM
Re: Myhui
Then why not oversubscribe to the one UHF antenna pointing to Mount Wilson serving every user that wants to see any terrestrial broadcast for the Los Angeles metro market?
wanlord
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50%
wanlord,
User Rank: Light Sabre
2/5/2014 | 9:57:35 AM
Re: Myhui
Do you think that each antenna can be used by multiple users (one at a time)? Meaning they don't "own" their own, but they simply "rent" that antenna during use? This would allow them to oversubscribe the box which makes much more sense. 
myhui
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50%
myhui,
User Rank: Moderator
2/5/2014 | 12:54:55 AM
Re: Myhui
Routers and associated protocols have handled multicast for many, many years. I'm sure that's the only way their business can scale. Otherwise how can it possibly scale with each subscriber needing their own feed, and on top of that, needing their own physical piece of hardware to generate this feed?

Back in the old days in Silicon Valley, and even now, the #1 test any idea must get past is: "will it scale"?
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