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This week, ABC (s DIS) is taking the fight against Aereo to the New York-based startup’s home turf: the network will start streaming its entire programming schedule in real-time to viewers in New York and Philadelphia. This marks the first time one of the major broadcasters has streamed a 24-hour live feed online.

However, there are a few key differences between ABC’s and Aereo’s approach: After a six-week introductory phase that will be open to anyone in the two markets, ABC’s streams will only be available to authenticated cable subscribers. And ABC is using cloud technology to deliver its live streams, making the endeavour a whole lot cheaper than Aereo’s.

ABC will start to stream its programming to iOS (s AAPL) devices in these two markets Tuesday, and intends to quickly expand the service to other markets where it owns local stations. Viewers served by ABC affiliates may get access to the live streams a bit later — ABC first has to negotiate revenue sharing for advertising served on the live streams and navigate the treacherous waters of content licensing.

But Ken Brueck, co-founder and CMO of upLynk, the company that powers the live streaming for ABC, thinks it’s only a matter of time before affiliates join the live stream. That’s because, from a technology perspective, ABC’s live streaming is incredibly cheap: Local affiliates who want to live stream their feed only need a simple $1,000 Linux box that taps into their live broadcast feed and uploads everything to the cloud, where transcoding happens in real time.

Specialized software on the upLynk device also taps into the broadcaster’s programming guide, and Uplynk swaps out programming on the fly if the broadcaster doesn’t have the rights to air a certain show online. Also swapped out are ads, with ABC replacing its generic TV advertising with targeted ads served to iOS devices.

The combination of that $1,000 box and upLynk’s cloud transcoding may seem like a minor technical detail, but it’s one of the main reasons broadcasters haven’t attempted to stream live programming online before. Previously, live streaming would have required them to deploy hardware encoders to each and every affiliate, something that Brueck estimates would have cost many millions of dollars. Now, the transcoding is done by Amazon’s EC2.

That’s an approach that Aereo can’t take advantage of, because it has to transcode a unique feed for each and every customer, which is why Aereo’s roll-out is much more expensive — and has been somewhat slow. The startup, which captures live programming from major broadcasters with tiny personal antennas and then streams it to subscribers, announced that it wants to be in 22 cities by the end of 2013. But so far, it’s only available in New York.

The flip side, however, is that Aereo can serve up shows that even ABC can’t. The broadcaster doesn’t have the rights to stream each and every show online, so upLynk’s cloud servers occasionally have to swap out programming on the fly. “Sometimes, your content is going to be different” that on live TV, admitted Brueck. He added that he hopes that ABC’s new live streaming app can help the entire industry to sort out these kinds of issues.

This story was updated at 10:15 pm to clarify details of upLynk’s deployment with local affiliates.