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Barry Diller says broadcasters are bluffing about going cable

April 29, 2013|By Joe Flint
  • Barry Diller testifying last year about his TV delivery startup Aereo.
Barry Diller testifying last year about his TV delivery startup Aereo. (Karen Bleier / AFP/Getty…)

Media mogul Barry Diller said he thinks his Aereo, the startup company that distributes broadcast signals via the Internet, could eventually end up with 20 million to 30 million subscribers.

Speaking at the Milken Institute Global Conference in Beverly Hills on Monday, Diller said once Aereo gets a significant subscriber base, it can become an outlet for original content as well as broadcast programming from CBS, NBC, ABC and Fox. 

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Diller, chairman of IAC, is a backer of Aereo, which charges consumers between $8 and $12 a month to receive broadcast channels through the Internet via a tiny antenna.  

Broadcasters are trying to shut Aereo down because, unlike cable and satellite operators, it does not pay them to transmit their programming. So far, Aereo has survived legal challenges from the big broadcasters accusing it of copyright theft.

"No incumbent ever wants to see its territory invaded," Diller said of the lawsuits against Aereo.

Diller added that he thinks the courts will continue to side with Aereo but said he fears broadcasters will push Congress to take a stand against the company.

In recent weeks, both Fox and CBS suggested they would drop broadcast TV and become cable channels if the courts continue to side with Aereo.

Diller dismissed that as an empty threat.

"I think there is literally no chance," he said, adding that the local TV stations that the networks own are still big profit drivers. 

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But Diller didn't fault the networks for fighting Aereo.

"What fool wouldn't resist change if change would take away a real neat situation?" he said. The neat situation Diller was referring to is the money broadcasters get from pay-TV distributors to carry their signals, known in the industry as retransmission consent.

But he also had a warning for those who are resisting change: "Do not put your hand in front of a train."

Diller, who was an architect of the Fox network and before that headed Paramount Pictures, said it was his hope that Aereo and other new Internet-based distribution systems will ultimately change the way programming is sold to consumers. 

He predicted that, at some point, HBO will sell its service on a stand-alone basis through its HBO Go application. Currently consumers must sign up for dozens of channels just to have the option to get HBO.

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