Netflix's Worst Nightmare is Invading 22 More Cities

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Netflix (NASDAQ: NFLX ) may be the current streaming video champion with more than 30 million subscribers worldwide, but a new streaming TV service hopes to change that. Aereo , which brings live TV to the Internet, is in the process of expanding to 22 additional cities, including Atlanta, GA; Austin, TX; Detroit, MI; Chicago, IL; Miami, FL; and Washington, DC.

This week the company brought its service to Boston, MA.

Backed by Fox Broadcasting Company co-founder and IAC/InterActiveCorp (NASDAQ: IACI ) Chairman Barry Diller, Aereo made its debut more than one year ago in New York City. At the time, Aereo had planned to charge $12 per month for its most basic service.


The company now offers several plans, including a free option that provides just one hour of daily streaming.

While some may question the value in paying for free over-the-airwaves content, Aereo does provide a few inherent benefits.

First and foremost, the service allows users to record live television. Up to two channels may be recorded simultaneously, but only those who pay will be able to access this feature.

In addition to the $12 monthly plan (which includes 40 hours of cloud-based DVR storage space), Aereo offers an $8 plan that cuts the DVR storage in half. Users can purchase an entire year's worth of service for $80, or pay as they go at just $1 a day.

That latter plan seems to be where Aereo could become the most useful -- especially after the service goes nationwide. It could, for example, allow traveling businessmen to watch and record live sporting events they would have otherwise missed.

In that regard, Aereo might turn out to be a grand experiment in determining how much consumers are willing to pay to view their favorite "free" shows, and how often they are willing to spend money on them.

If one million Americans purchased a day pass to watch the season finale of a hit CBS (NYSE: CBS ) series, such as The Big Bang Theory, the network might be tempted to implement a paywall in the not-too-distant future.

Whether or not that would be good for Aereo -- or consumers -- has yet to be determined.

In the meantime, Aereo must fend off an unusual competitor. According to The Wall Street Journal , Alkiviades David has created a similar service called Aereokiller, which was initially promoted with the website barrydriller.com .

Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at 248-636-1322 or louis(at)benzingapro(dot)com. Follow him @LouisBedigianBZ

(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

Referenced Stocks: CBS , IACI , NFLX

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