Aereo’s $38 Million Helps Fund Expansion and Social TV Efforts

Courtesy Aereo

Aereo CEO Chet Kanojia says the company is working on new social-networking features for its online TV service.

Despite protests from media companies, Internet television provider Aereo is expanding into more cities with new products, fueled by a $38 million financing round.

Aereo streams live TV to customers’ computers and mobile devices by picking up broadcasts the old-fashioned way — using mini antennas located in off-site facilities, instead of paying media companies directly for online rights to their programming. Aereo, which has only offered service in its home base of New York, said today that it will use some of the capital to bring its unique model to 22 more cities.

Among Chief Executive Officer Chet Kanojia’s other priorities is to add social-networking capabilities to its TV service. Many startups and media companies have tried to incorporate friends’ recommendations about what to watch, but the features haven’t reached critical mass. Two such companies — Viggle and AdaptiveBlue, which makes the application GetGlue — announced plans to merge last year, but Viggle said in a filing with the U.S. Securities and Exchange Commission today that it would need more time to raise the financing needed to close the deal.

Aereo hopes to avoid the pitfalls found in some of these services, Kanojia said. TV check-in apps, for example, can seem like fronts for media companies to gather data about viewers’ preferences for advertising purposes, he said.

“Somebody checking in somewhere, and saying, ‘I’m watching an episode of this,’ is very biased against the consumer,” Kanojia said. “There’s no really great experience. There’s something really exciting that we’re working on that we think will set the bar.”

Aereo already allows customers to tell their Facebook friends about shows they’ve set to record on their cloud DVRs. The company plans to experiment with other social features in New York starting in the spring, Kanojia said. He declined to give details about the upcoming products.

Aereo is not short on cash to fund the developments. The company has raised $63 million in total, Kanojia said. The latest round came from Barry Diller’s IAC/InterActiveCorp and Highland Capital Partners.

Some of that money will probably go to lawyers. TV networks including Walt Disney’s ABC and Comcast’s NBC are still working to shut Aereo down by appealing a court ruling that said the startup’s antenna method is legal.

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