• by Wayne Friedman , April 29, 2013

Major Aereo investor Barry Diller sees the over-the-top service as a gateway to future Internet growth.

Speaking at the Milken Institute's Global Conference in Los Angeles, IAC Chairman Diller says: "This is not done because I think here is a gold mine I can plant my flag on it. I am doing it because to me, the ability to get the world to utilize the Internet for all its information, entertainment, news, video to me it is a big shift."

IAC owns various Internet-related businesses.

While Aereo has won court victories allowing customers to pay a nominal fee for local broadcast television -- $8 a month -- its future looks to be plagued with more court cases where the broadcasters will try to stop its business operation.

On the question of whether the future litigation is worth it, Diller says: "I do not know. I cannot answer that. There are conditions where if a certain amount -- 10 million, 20 million U.S. households -- utilize the platform, that will be very profitable."

Major broadcasters believe Aereo is violating copyright infringement. Aereo counters its digital business is acting like individual "antennas" for customers where those antennas allow consumer to receive free over-the-air broadcast TV stations.

He says: "I understand broadcasting -- no incumbent wants anyone in. That is an unbreakable rule." Aereo, which started up business in New York City, recently announced that it would be bringing its service to Boston. Diller says the long-term view for Aereo hasn't changed:

"The big picture is to change the centricity of what has been closed systems to an open Internet system. ... If you don't like cable, paying $150 a month or so for services, if you don't happen to not live without ESPN ... being able to watch all free broadcast, all the events all of the local television for $8 a month is an alternative."

Thinking even longer-term, Diller was asked whether Aereo would create its own content: "We are not in this that long, a radical revolution. We're only beginning it in video. It started a few years ago. The bandwidth was not enough until a few years ago. The centricities will shift to the Internet."

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