Meet the Start-Up That's Scaring the Network Giants

By Allison Kade

If you've heard the term "cord-cutting" pop up in the news as of late, you may have assumed that it had something to do with breaking free from Mom—but it's actually being used to refer to the growing ranks of people who are ditching their cable subscriptions.

According to a 2012 study conducted by the online company Tremor Video, some 31% of people were at least thinking about cord-cutting. Yet another study by Deloitte predicts that, in reality, fewer than 1% of Americans will actually cut those cable cords this year.

So what could possibly be standing in their way? Perhaps it's the inability to watch live TV on their computers or mobile devices.

But one brazen tech startup, Inc. magazine.

And despite legal challenges from broadcasters, the courts have repeatedly found the service to be legal ... for now. So is Aereo the future of TV or the next Napster?

The ABCs of Aereo

Unlike such service providers as Hulu or Netflix, Aereo allows you to stream TV live from free broadcast channels—ABC, CBS and PBS, to name a few—so you can watch sporting events, awards shows and your local news. And it lets you view from any device, including an iPad, a computer and even a television set, as long as it's connected to the internet through a service like Apple TV or Roku.

For now, Aereo is only available in New York and Boston, with plans to start service in Atlanta on June 17. Service costs $8 per month for live broadcast streaming, with a DVR maximum of 20 hours. Pay a $12 monthly fee and it ups your DVR capacity to 60 hours. There's no long-term commitment, contract, equipment or installation process—and the subscription comes with up to five connected devices, which you can change at will.