Barry Diller making trouble for broadcasters Barry Diller still likes to play the role of disruptor. From his early days as a pioneering programmer who struck gold making movies for television to being the architect of the Fox network, Diller has always been willing to turn conventional wisdom on its head. Now he wants to change the way people get their television, but he's facing a big fight from the industry he once called home. Diller's latest bet is on Aereo, a company that distributes the signals of local broadcast stations via the Internet to smartphones, tablets and Internet-friendly TVs. Aereo, which launched in New York in March, charges subscribers $12 a month for a tiny antenna that receives broadcast signals and a remote digital video recorder that can hold up to 40 hours of shows. Diller is on the board and his company IAC/InterActiveCorp led a $20.5-million financing round for Aereo. Part of the appeal of Aereo is that it would have value for people who live in big cities and can't have big rabbit ear antennas to get the signals of local TV stations. But, outside of major urban areas, it remains to be seen how many people will pay $12 a month to get something they can already receive for free. Broadcasters claim that Aereo's transmission system violates their copyright and are hoping to shut it down through the courts. But on Wednesday, a federal judge in New York denied a request from a coalition of broadcasters seeking a preliminary injunction against Aereo. "Today's decision shows that when you are on the right side of the law, you can stand up, fight the Goliath and win," said Aereo CEO and founder Chet Kanojia. Diller added, "I'm happy the judge denied the injunction, and now we can really begin telling television consumers they have an alternative." The broadcasters--including CBS, NBC, ABC and Fox--have said they will appeal. "This case is not over by a long shot," CBS said in a statement. Some in the cable industry, including Time Warner Cable Chief Executive Glenn Britt, are pulling for Aereo. Cable operators pay broadcasters billions of dollars annually to carry their signals. If Aereo is found to be on solid legal ground, cable and satellite operators could try to mount their own legal challenge to the retransmission consent rules that allow broadcasters to charge for carriage of their signals. Or so-called multichannel video program distributors could license Aereo's technology and offer the service on its own. On an earnings call earlier this year, Britt said if Aereo succeeded it could be a "very interesting thing" for cable operators. While that has broadcasters worried, a case could be made that cable and satellite operators should be concerned too. After all, if Aereo does catch on, consumers frustrated with the rising price of cable could end up embracing the idea of getting broadcast signals and then forgoing cable TV in favor of Netflix or Hulu or some other digital content provider. So far, Aereo is only offering its service in New York City and declines to say how many people have signed up or when it might be offered in other areas. Diller, however, has boasted that the service will be available nationwide next year. Broadcast signals may not be the end game for Aereo and Diller. One major cable programmer has been contacted by Aereo about selling its programming to the distribution service. An Aereo spokesman declined to comment on whether Aereo would seek to compete with cable and satellite operators by offering networks such as MTV or TNT as well as broadcast signals. At least one user of Aereo is less than impressed with the service. Marci Ryvicker, a media analyst at Wells Fargo Securities, said, "It's not great." A major problem, she explained, is that "channel changing takes forever and it's cumbersome." A tablet is needed to serve as a remote and it takes 15 seconds for a channel change to register. In that time, viewers could get up and walk to the TV and change the channel like they did in the 1950s. Aereo wins first legal round of fight with broadcasters Broadcasters sue to stop Aereo Aereo likely to face fight over its plans to distribute broadcast TV