Aereo Cuts Back New York & Boston Staff, Says It’s Not Shutting Down
Still trying to tread water in a hostile sea, streaming television service Aereo is slashing away much of its staff, further casting its future as a company in doubt.
In a brief statement sent to Xconomy, the New York-based startup, which halted its service in the summer, confirmed it is letting employees go, but has not yet turned off the lights.
“In an effort to reduce costs, we made the difficult decision to lay off some of our staff in Boston and New York. We are continuing to conserve resources while we chart our path forward,” senior vice president of communications Virginia Lam says via email. Lam went on to call the cuts “difficult, but necessary” to keep Aereo afloat. The company declined to comment further or state how many employees had been cut.
From the moment Aereo came out of stealth in 2012, there were questions about the legality of its service, which streamed broadcast TV shows to paying subscribers. Aereo presented itself as an alternative to traditional industry models—others called it an attempt to exploit a perceived loophole.
Aereo recently asked regulators to designate the company a service provider comparable to cable companies, whose business model Aereo ironically flouted in the past.
In mid-October, Aereo CEO Chet Kanojia posted an open letter to customers on the company’s homepage describing some of the attempts to remain alive.
Kanojia said the company asked the Federal Communications Commission to get online video services, such as Aereo, placed under the umbrella of multichannel video programming distributors—the same category as cable and satellite television providers. FCC Chairman Tom Wheeler seems open to such a change. Whether or not it would save Aereo, if it happens at all, remains to be seen.
Back in June, Aereo lost its legal battle with television broadcasters in U.S. Supreme Court over allegations of copyright infringement. Broadcasters claimed Aereo’s service was a retransmission of their television signal, which Aereo was not paying for. Aereo offered miniature antennae that viewers could access—for a fee—to stream over-the-air network broadcasts to their devices.
Despite Aereo’s assertions that consumers had a right to use its service to watch over-the-air shows, the high court’s ruling forced the company to suspend those operations.
Since its founding, Aereo raised some $97 million in funding, which includes January’s $34 million in a Series C round that included investors IAC, FirstMark Capital, Highland Capital Partners, and Himalaya Capital Management.