Video services

Sezmi Aims Beyond IPTV

The startup formerly known as Building B is launching a video service that, it claims, could remake the way TV is delivered and watched, and even enable telcos to offer video services in a way that could render cable and satellite providers obsolete.

Having changed its name (starting today) to Sezmi Corp. , the two-year-old startup says it's going to have trials running in at least three U.S. television markets by the summer.

Not all the details are out, but Sezmi has revealed the two prongs of its strategy. First, the company wants to deliver regular TV programming, Internet video, and video on demand (VOD) content together, using broadcast signals, not IPTV, to carry the bulk of the load.

Secondly, it's organizing channels and programming in a new way that helps consumers surf only the content they really want to watch.

"All the focus is on hi def. No one is addressing these issues, which are more important to consumers than hi def," says Buno Pati, Sezmi's CEO.

On the delivery side, Sezmi is taking advantage of digital terrestrial broadcast, using that spectrum to ship the bulk of the popular TV channels.

That alleviates the bandwidth question that's been dogging IPTV, since the home's Internet link doesn't necessarily have to deliver multiple high-definition streams all the time. In other words, Sezmi suggests that telcos could use the digital broadcasting infrastructure that's already sitting around, rather than trying to build out fiber networks to satisfy IPTV.

That's an approach that BT Group plc (NYSE: BT; London: BTA) has adopted in the U.K. for its BT Vision service, which comprises terrestrial TV delivered through a roof-top aerial and on-demand content delivered across a DSL connection, with all the content flowing through the customer's set-top box. (See Soccer Kickstarts BT's IPTV Growth.)

It might seem like a gamble, but Sezmi is going with statistics that show viewers still gravitate toward the big-name networks, such as NBC or ESPN. "The reality is, it's a short tail world," says Phil Wiser, Sezmi's chairman and president.

Specialty channels -- the kind showing depressing French movies or really long operas -- get delivered over the home's broadband connection, as does Internet video, of course. Sezmi refers to the overall architecture as FlexCast.

Parts of the plan might sound familiar, but Sezmi appears unique in its ambition to deliver all forms of video. Services such as Moviebeam took advantage of digital TV spectrum but didn't use it as part of an overall TV package. And unlike Apple TV or TiVo Inc. (Nasdaq: TIVO), Sezmi provides the content itself. And the way it does that -- the way it organizes all that programming -- might be the more significant half of its plan.

Redoing TV
Sezmi wants to change the very act of television watching. Channel numbers are gone, replaced with customized menus for different family members -- the Sezmi remote has five "on" buttons, each launching a different start page -- and a 1 Tbyte digital video recorder to feed those menus.

The menus act as playlists that are customized to each family member's taste. Sezmi adds to that by recording recommended shows and/or drawing from the preferences of viewers with similar habits. And in a nod to social networking, viewers can suggest shows to one another.

Outside one's own menu, Sezmi lists programs grouped by genre. A science fiction menu, for instance, might include options for Battlestar Galactica, a couple of video-on-demand Star Wars prequels, and some YouTube Inc. videos. The idea is to mix all the programs together, blurring the lines between broadcast TV, video-on-demand, and Internet video.

Channels aren't completely dead, though. Networks and local TV affiliates can get their own "zones" -- menu pages that list available programs and can even include targeted, clickable adverts.

The hardware required is limited to just two pieces: an antenna the size of a large vase and a set-top box. Once these are plugged into the TV, the service starts itself automatically.

While that sounds simple enough, the overall operation behind Sezmi gets complex. It includes: a TV operations center in Melbourne, Fla.; a network to deliver programming over the Internet; and a technology to collect information on viewing habits and to monitor the effectiveness of targeted ads.

Table 1: Sezmi's Pieces
Function Who Does It What It Means
TV Broadcasting Harris Operates the control center for TV programming, as it does for other clients like ABC
Servers, storage Sun The hardware for IP delivery of lesser-known networks and VOD choices
Targeted Ads Sezmi A backchannel capability helps advertisers see which ads are effective
Wireless broadband (Unknown) A 3G or WiMax provider could fuel the broadband portion of FlexCast in certain areas. This is just a possibility; Sezmi hasn't announced deals or plans here
Internet video Service Provider Distributed via broadband, as normal, but now, selections from sites like YouTube can be mixed in with other TV programming
DVR Sezmi 1 TByte of storage provided with Sezmi's set-top box
User preferences Sezmi FlexCast system learns preferences for up to five users, tapping other audience members' patterns to help guess at new recommendations
Source: Sezmi

All that has come together since Pati and Phil Wiser started the company in 2006. Sezmi won't say what it cost to build out the operation, but the startup didn't pay for everything itself. Harris Corp. (NYSE: HRS) helped pay for, and now runs, the network operations center.

The service has its limitations. Digital TV signals don't reach every home in the U.S., so Sezmi's will be a qualified service, unavailable to certain houses or neighborhoods.

And while Sezmi expects to have a network that passes 10 million homes in 2010, it's going to have to storm America a few markets at a time, starting with the trials this summer.

It's important to remember that Sezmi doesn't want to be a retail seller. It's setting up the service in the hope of getting service providers to offer it.

Telcos are the obvious target. They're trying to come up with video plans, but the smaller operators don't have the resources to build out fiber networks the way AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ) are. Sezmi claims it can help telcos avoid those costs, while providing a service that looks nothing like what the cable companies offer. "If they just replicate cable, then all they have to compete on is price," says Dave Allred, Sezmi's senior VP of marketing.

Even AT&T and Verizon might find uses for Sezmi, in the areas that U-verse and FiOS don't yet reach, Allred says.

Sezmi has been working hard to generate buzz during the past year, but it's kept its Belmont, Calif., headquarters quiet and modest. Click the picture of the door to open a slideshow that includes six more photos from the inside.

— Craig Matsumoto, West Coast Editor, Light Reading

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Pete Baldwin 12/5/2012 | 3:41:55 PM
re: Sezmi Aims Beyond IPTV We've given Sezmi the Startup Spotlight treatment here:


Now, we'd previously done a Spotlight on Building B. In general, the idea is to update these Spotlight pages as a company evolves, but because of the name change, we figured we'd leave the old page untouched. So, here's what we knew -- or thought we knew -- about Building B in November:

Pete Baldwin 12/5/2012 | 3:41:55 PM
re: Sezmi Aims Beyond IPTV ... or is it really TV 2.0? What's your take?
Jeff Baumgartner 12/5/2012 | 3:41:54 PM
re: Sezmi Aims Beyond IPTV Or the next USDTV? Seems the list of failed datacasting ventures is long and impressive. I'll be curious to see if they'll be able to gather enough digital spectrum to deliver the amount of HD content consumers are going to want or expect. But that monster hard drive on the Sezmi set-top , coupled with a "push" HD-DVR service, may provide part of the answer. JB
opticalwatcher 12/5/2012 | 3:41:52 PM
re: Sezmi Aims Beyond IPTV I'm trying to figure out what they are offering.
TiVo can receive programs over the are, and it lets you "list programs grouped by genre" and record recommended shows.

Maybe their niche is the fusion of the over-the-air receiver along with some unspecified IPTV/video-on-demand internet program recording handled all in one box.

They might want to move further south than Belmont, down to San Jose, where receiving San Francisco's over-the-air digital stations is likely to be poor with just a table-top 'vase' antenna.
Pete Baldwin 12/5/2012 | 3:41:51 PM
re: Sezmi Aims Beyond IPTV They're offering a full TV service. So it's not a TiVo competitor; it's a Comcast competitor.

Now, it's possible you might not consider that a hook. Sezmi works on the premise that you want more than what cable or satellite has, but can't get IPTV because the telcos haven't built out to you yet. If you're content with cable+TiVO, then yes, you're probably not interested in Sezmi.

Sezmi's interface offers a greater scope, than TiVO, based on what little I've seen of it. It'll mix in sources TiVO can't get to (YouTube, VOD.) Whether that's valuable or not is up to you. It's also got more bells and whistles than TiVO (the possibility for a traffic & weather page, for instance.)

The antenna ... I didn't mean to downplay it (actually I was trying to emphasize how LARGE it is compared with in-home WiFi antennas.) Sezmi claims there's a top-notch antenna array inside that box, something where they worked on the engineering to outdo what's been available for digital TV. It's something I didn't have time to explore more deeply with them; I was considering doing a followup story about it.
thenameisbond 12/5/2012 | 3:41:50 PM
re: Sezmi Aims Beyond IPTV
Unless their STB does some re-encoding, playing flash videos from youtube on a 46" LCD HD TV will not be very pleasing. I tried playing them via a PS3 and its just something no one would like to watch.

Thats why people still prefer watching on a laptop vs TV.
trzwuip 12/5/2012 | 3:41:49 PM
re: Sezmi Aims Beyond IPTV Agreed with last post!

Not a good sign when a start up has to re-start because its first product went over like a fart in church!

Says Me: "This spells a likely last hurrah before doomsday!" Founders are likely spending their last dollars having their relatives perform Feng Shui on the building for $50k per session to drain the bank account completely. "I'll show you VCs!"

Honestly 12/5/2012 | 3:41:47 PM
re: Sezmi Aims Beyond IPTV Hope these guys have a boat load of money because good luck trying to establish yet another new way to deliver what we already can get delivered at least three ways that are standard. DirectTV too can develop lists by genre.
thebulk 12/5/2012 | 3:41:46 PM
re: Sezmi Aims Beyond IPTV i have to agree that watching youtube videos on your HDTV will not be the best experience you could have for entertainment.

not just that but i can not imagine youtube being very easy to navigate via TV and remote
Andy1978 12/5/2012 | 3:41:43 PM
re: Sezmi Aims Beyond IPTV It's cool that it puts over the air video and internet video all in one box and that it records everything on a DVR for me, but why should I watch their "targeted ads", let them collect marketing data about me and my viewing habits, *AND* pay them a monthly fee for the privlage of spying on me and spamming me with ads? Especially when I can download internet video and record OTA broadcasts on a DVR without paying them a monthly fee!

Their selling point is that TelCo's won't have to upgrade their existing broadband network for this thing to work. I, therefore, wonder how much of a burden this service would be on a typical 1.5 Mbps DSL connection? If this thing is going out and downloading stuff that it thinks I *might* like from the internet, what happens to my internet connection while it's downloading content to its HDD? There may be times when I'm surfing the net that I wouldn't want to share any of my bandwidth with the Sezmi box.

The idea is cool, but I don't think these guys have knocked it out of the park yet.
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