Aereo service targets 30 pct of US broadcasters' market -Diller

LOS ANGELES, April 29 Mon Apr 29, 2013 3:14pm EDT

LOS ANGELES, April 29 (Reuters) - Barry Diller, the billionaire media mogul who is backing the startup Aereo TV service said it expects to reach between 25 and 30 percent of the U.S. television audience with the wireless service that broadcasters say undermines the economics of their business.

On April 1 a federal appeals court denied a motion by major media companies to shut down Aereo, which uses large numbers of TV antennas to capture broadcast signals for its subscribers who don't want to pay cable and satellite operator's higher cable fees.

Diller, speaking in Los Angeles on Monday to a conference sponsored by the Milken Institute, estimates the service, which is currently only in Los Angeles and Boston, would roll out to 22 more markets by the end of the year and to eventually reach 25 to 30 million potential subscribers for its $7.99 a month services.

"Broadcasters are saying, this is awful, but the courts have spoken" said Diller, who is also chairman of IAC. "They're just trying to create a controversy that they can take to Congress to get some help."

Diller said Aereo has no plans to hire Washington lobbyists to battle the media giants, relying instead on "many millions of TV consumers" who will argue on Aereo's behalf.

"I thank the broadcasters for making all that noise on our behalf," he said in an interview after the session.

Aereo doesn't break out the numbers of its subscribers, and Diller said it will "be expensive for marketing to reach potential users once the technology is in place throughout the country." The technology relies on capturing broadcast signals with a farm of small antennas, then giving subscribers access to them over the internet.

Diller made light of whether he intended to negotiate with broadcasters, some of whom have threatened to take their channels off over-the-air broadcast and to put them instead only on cable and satellite services, where Aereo can not capture the signal.

"If they think they can take prime time programming away from their affiliate TV stations, they will learn soon enough that's not the case," he said "I've told broadcast executives I'm happy to negotiate with them. As soon as Radio Shack buys them antennas, we'll buy them, too."

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