Aereo Preps San Antonio, Hits Capacity in NYC
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.
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