Aereo+CloudAereo has come up with an interesting concept. By using very small antennas to build a local channel antenna farm, their technology delivers local broadcast TV stations to Internet connected devices via the cloud within a certain geographic region – New York City for now. It’s an interesting twist on OTT video and the video business model in general.

With Aereo, each subscriber has access to a remote antenna that captures local broadcast signals – ABC, NBC, CBS, FOX, CW and PBS – and can access that local broadcast TV content via an Internet delivered stream. The content is viewable in an HTML5 supported browser and can be accessed via an OTT set-top-box, like a Roku box, for viewing on the television.

Subscribers will also be able to view this content on mobile devices, like tablets and smartphones, as long as they stay in their local market. The service uses IP address recognition and other geo-location technology to ensure subscribers are viewing this content in their local market only. In other words, you can’t watch local New York channels in Florida from your wi-fi connected iPad. You have to be physically located within the local DMA. Aereo has established a $12 monthly subscription fee for the privilege.

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Currently, the service is optimized for Apple iOS based devices, including the iPhone and iPad. Company spokesman Mike Schroeder tells me that formatting for other devices will follow their official March 14th launch.

Aereo Antenna
Aereo Antenna

The service also includes a program guide with search functionality and a cloud based DVR service, giving customers 40 hours of storage for Aereo delivered content.

Aereo is banking on growing interest for local programming while on the go, as well as providing an option for cord cutters who don’t want to install their own local off-air antenna. Adding mobility to the equation may make their service a viable option for some. For now, Aereo is focused on the New York market, with no announced plans for expansion. Schroeder also tells me that there are no plans to partner with service providers to offer this service, at least not currently.

The new approach will certainly draw the interest of legal departments from local broadcasters and other programmers. I suspect we’ll see some saber rattling.

Aereo’s prepared, I’m sure. They have $25 million in funding and the backing of IAC Chairman Barry Diller, no stranger to this business.

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