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End of Cable Bundle Inevitable, With or Without Aereo: CEO

Even if Aereo is ultimately unsuccessful, the unraveling of the cable bundle is "inevitable," CEO Chet Kanojia told CNBC on Thursday.

Cable bundling, considered by many investors to be the holy grail for cable companies (including CNBC's owner, Comcast), is the process of selling a wide range of channels to consumers for one price. This has been criticized by many who want more choice for consumers and complain about paying for a number of channels that they do not watch.

(Related: TV Evolving Rapidly With 'Game Changing' Tech: Comcast CEO)

Aereo, which captures free over-the-air television signals and rebroadcasts them over the Internet to paying customers, is in the midst of a legal battle with major networks over the legality of their product.

"The basis of our argument is a sound policy," Kanojia told CNBC's "Squawk on the Street." He pointed to decisions in appellate courts that have upheld Aereo's legality in the past. "Of course there are challenges. It's a large market, so we expect those challenges," he said.

(Related: Economics Changing for Cable, Bundling Threatened: John Malone)

Aereo's Chet Kanojia
Aereo's Chet Kanojia

Aereo is available in New York, Boston and Atlanta. To deliver service in a given area, the company must establish infrastructure, such as antennas and data centers. Despite this, Kanojia plans for the service to be available in 17 markets by August.

"The reality is that consumers have the right and the ability to have an antenna. Just because I figured out a smarter, simpler, more modern version of that, that shouldn't change the dynamics. That's good for consumers all around," he said.

(Related: Broadcast Turning to Cable Is a 'Weak Argument': Aereo CEO)

"It's not lost on everybody that the market is shifting. It's inevitable that consumption of this form of entertainment—television—is going to be on the Internet," he said. "At some point, this has to break, with or without Aereo."

(Related: As TV Migrates Online, Cable Is Under Pressure to Change)

When asked about the unraveling of the cable bundle, Kanojia said: "I think it's inevitable." He added that this creates a "monopolistic situation" that "holds you hostage" for a handful of channels. "Nowhere in the world does that system function."

— By CNBC's Paul Toscano. Follow him on Twitter and get the latest stories from "Squawk on the Street" @ToscanoPaul.

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