Investors have just dropped $20.5 million on Aereo, a start-up that has devised a means of streaming broadcast television to mobile devices.

Barry Diller, chairman of IAC, one of Aereo's new investors, will take a seat on Aereo's board.

Aereo, previously known as Bamboom Labs, plays off the network DVR approach. The company starts with inexpensive, very small HD antennas. It sets up a data center and assigns a single antenna to each subscriber, and it associates that antenna with network storage. When the subscriber selects a program – live or recorded on the nDVR – the Aereo data center initiates a stream to the subscriber's smartphone or tablet, or to over-the-top boxes such as the Roku box or Apple TV.

Each subscriber will have access to network and local channels and will have an allocation of about 40 hours of nDVR storage. The service integrates social networking apps.

Aereo is set to charge $12 a month for the service, which according to news reports will first be available only in New York City. The company is planning to start offering a 30-day free trial starting March 14.

IAC led the new round of financing. Previous investors that participated in the latest round include FirstMark Capital, First Round Capital, High Line Venture Partners and Highland Capital Partners, along with some unidentified individual investors.

The new infusion brings Aereo's total funding to approximately $25 million.

"Aereo is the first potentially transformative technology that has the chance to give people access to broadcast television delivered over the Internet to any device, large or small, they desire. No wires, no new boxes or remotes, portable everywhere there's an Internet connection in the world – truly a revolutionary product," said Diller.