• by David Goetzl  @dgoetzl, January 8, 2013

Aereo, the service that allows users to watch local broadcast channels on mobile devices, plans to expand into 22 markets beyond its New York launch base in 2013. Currently, TV networks are trying to shut it down in court.

Despite litigation, it has secured an additional $38 million in a round led by current funders IAC. Chairman Barry Diller has been a vocal proponent, and Highland Capital Partners.

The Big Four broadcast networks want to shutter Aereo, which also allows DVR-like functionality, believing it will deprive them of retrans consent payments and ad dollars.

Chicago, Dallas, Atlanta, Washington and Houston are among the cities where Aereo is looking to expand its live TV service. Many have stations owned by the Big Four. Other smaller markets where Aereo plans to expand have stations owned by others, which could file their own lawsuits or hope the wealthy Big Four prevail in New York federal court.

Aereo offers the potential for cord-cutting; there are multiple subscription plans, including $1 a day and $8 a month. “Watching television should be simple, convenient and rationally priced,” stated Aereo CEO Chet Kanojia.

In mid-2012, the leading networks suffered a blow when a federal judge denied their request for a preliminary injunction against Aereo, while charging it is engaged in copyright infringement. The judge found the service is “likely lawful.”

At the time, Fox issued a statement saying the decision marked “a loss for the entire creative community.”
 
Aereo has done very little marketing in New York, seeking to create demand as an invitation-only service. It plans to offer its free-trial opportunity in the coming 22 markets.