There's likely no online video startup that has created quite the stir this year that Aereo has. But what's been lost in the coverage of its legal wrangling with broadcasters and high-profile backing from Barry Diller is a clear understanding of Aereo's business strategy: Who are its target customers? What is its real value proposition? How will it compete in a crowded video landscape? What new business opportunities is it trying to create for the TV ecosystem? And how are things going so far?
These are among the questions that Aereo founder and CEO Chet Kanojia addresses in a 47-minute interview I did with him at the company's offices earlier this week. Chet looks at today's TV ecosystem and sees a world filled with inconvenience, irrational pricing/bundling and misalignments with emerging consumer expectations/behaviors. Like all can-do entrepreneurs, Chet's reaction is to see opportunity; in Aereo's case, that means delivering a "simple, rationally-priced, convenient" service to people who have become accustomed to these types of benefits in other areas of their lives.
As Chet explains, some of Aereo's prospects are "cord-nevers" - younger, Internet-centric users who place a huge value on convenience and are cost sensitive. And others are cord-cutters, who are ready to move on from taking myriad pay-TV channels they don't watch or value. Importantly, Chet doesn't see Aereo incenting these emerging behaviors, but rather benefiting from them.
In part 1 of our wide-ranging interview below, we also discuss Aereo's marketing approach and why sampling is so critical, the breakthrough antenna technology that enables Aereo's service and of course the dynamics with the broadcasters who are so determined to shut Aereo down.
Tomorrow I'll post Part 2.