In Wake of Another Lawsuit, Barry Diller Defends Aereo

Barry Diller, chairman of IAC/InterActiveCorp.
Patrick T. Fallon | Bloomberg | Getty Images
Barry Diller, chairman of IAC/InterActiveCorp.

Here at the Allen & Company media and technology conference in Sun Valley, the CEOs and investors aren't just talking about deals, they're also discussing disruptive new technologies which threaten to turn existing business models upside down.

The business generating perhaps the most conversation is television, and a wide range of businesses represented here, from Comcast and Disney, to Amazon and Apple, are trying to ensure that they own the future of content distribution, whether it's distributed via cable pipes or the Internet, and no matter what screen, large or small, they're watching on.

The traditional broadcasters certainly see Aereo as a threat based on the lawsuits they've filed against it. Aereo, which allows consumers to stream live broadcast television to mobile devices, starting at $8 a month -- without paying a monthly cable bill, or paying a fee to broadcasters.

News Corp's Chase Carey and CBS' Les Moonves have even threatened to investigate turning their networks into cable channels. And as Aereo expands to more markets -- it has announced plans to move into 22 markets this year, it draws more lawsuits. The latest: after expanding to Boston in May, an ABC affiliate, owned by Hearst has now sued, accusing it of illegally retransmitting its signal over the Internet.

But Aereo CEO Barry Diller defended the service, saying that all the lawsuits and concern, are just a "big drama thing." When asked about the fact that here at the conference he's rubbing elbows with the wide range of companies that have sued him he joked "Almost everywhere I go there are people who have sued," saying that the concern is "overblown." Adding "I don't think this [Aereo] is going to be the destruction of anything."

"The truth is it's just a technology that allows people to use the airwaves that belong to them to get their video television."

Is this all part of Diller's big push to break up the cable bundle, which is getting more and more expensive as sports costs in particular continue to rise?

Diller says it's not that he thinks the cable bundle *should* be broken up, but rather he thinks it's inevitable. "It's inevitable because there are people who don't want to subsidize ESPN for instance, and they should be allowed to do so."

A sign of just how valuable sports rights have become -- and just how important demand for live sports is, in holding together the cable bundle -- Allen & Company featured a panel Wednesday morning with the four sports commissioners, including NBA's David Stern and the NFL's Roger Goodell.

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—By CNBC's Julia Boorstin. Follow her on Twitter: @JBoorstin