Video services

Sezmi Dumps No-Frills Pay-TV Service

Sezmi Corp. , a startup that tried to take on MSOs and other pay-TV operators with a low-cost hybrid broadband- broadcast delivery platform, is shutting down its direct-to-consumer video service.

The company notified subs on Friday afternoon that it would scuttle that service starting Monday (Sept. 26) and instead focus on striking deals with service providers. Sezmi's trying to soften the blow by letting customers rent movies and TV shows for free through Nov. 1.

"Sezmi has changed its business focus to providing our product and technology platform to service providers, internationally and in the U.S., who are interested in providing broadband video services," the company said. Sezmi, which was not immediately available for comment, has not disclosed subscriber numbers.

Sezmi and its hybrid video service originally set out to disrupt the TV market with a low-cost video subscription service. Its entry-level Sezmi Select service sold for $4.99 per month and included a DVR with 1-terabyte of storage (which sold for $150), access to a menu of VoD titles and a lineup of broadcast TV channels. A higher-end Select Plus, limited to Los Angeles, ran $19.99 per month and included a slimmed down cable TV package that included some popular channels like Nickelodeon, MTV and VH1 (but no ESPN) that was delivered over spectrum leased from local broadcast TV stations. Sezmi shut down Select Plus in late 2010.

Sezmi, which has raised more than $90 million, is now pitching its hybrid approach as a turnkey product to help service providers pipe video services to tablets, TVs, smartphones and other IP-connected devices. Among recent wins, Grupo Iusacell of Mexico picked the Sezmi platform to power its Totalplay video service.

Why this matters
Sezmi is the last startup to try and fail to win gobs of customers with inexpensive, no-fills TV packages and couldn't make its model work despite a crummy economy and a budding cord-cutting trend. US Digital Television LLC (USDTV) also had designs on a hybrid approach based on cheap video subscription packages, but managed to sign up just 4,000 subs before going belly-up in 2007 after its primary investor pulled out.

Cable MSOs, meanwhile, are starting to get wise to the fact that the tough economy and pricey subscription rates are causing them to lose subscribers by the hundreds of thousands each quarter. Time Warner Cable Inc. (NYSE: TWC), for example, pledged last week to expand the availability of TV Essentials, an ESPN-free tier that's priced at between $30 to $40 per month. (See Q2 Video Scorecard: Cable, Satellite Get Creamed .)

For more
Read more about Sezmi's roller-coaster ride.

— Jeff Baumgartner, Site Editor, Light Reading Cable

dvb4catv 12/5/2012 | 4:52:39 PM
re: Sezmi Dumps No-Frills Pay-TV Service

I think this type of sevice was tried in the late 70's where pay per view movies were transmitted to VCR's with adapter boxes.

It was transmitted in the Verticle Blanking Interval. A digital version was tried again 10 years later. The video was stored on disk instead of a VCR.

This latest attempt was transmitted in an all digtal form using spare bits in the broadcasters transport stream.

This was tried about eight years ago and very few people were using the TV stations Digital Carrier. My compnay supplied satellite carrier services to paging companies in the late 80's.

The first nationwide carrier used the FM Radio sations subcarrier to transmit data. The paging traffic was delivered over satellite to multiple radio sations.

The main problem with this approach was that you had to had hundreds of contracts with these independent radio stations. Before you knew it you were spending all your time negotiating contracts. Like everyday or week.

I think this was one of the main failures.

Broadcasting directly to the paging transmitters solved the problem.

Norman Gillaspie www.transparentvideo.net

AESerm 12/5/2012 | 4:52:39 PM
re: Sezmi Dumps No-Frills Pay-TV Service

Interesting they mention international. While I was focused on covering HTTP video at IBC for Videonet, I kept bumping into counterveilng references to hybrid. Some booths/stands (Korean-based Kaon, for sure) were trumpeting it loudly. As for Sezmi, maybe a lesson that when aiming to be a disruptive innovator, it helps to be truly innovative?

Jeff Baumgartner 12/5/2012 | 4:52:39 PM
re: Sezmi Dumps No-Frills Pay-TV Service

The timing of this is sort of surprising to me considering all the talk about cable's affordability crisis and the specter of cord-cutting and so and so forth. It would seem that the getting should have been good for a package for Sezmi (aside from that box , which would still set people back $250).

Then again, if Sezmi has to reduce the cash burn quickly and sees the SP angle as the one that will bring revenues in the door faster, then they may not have had much of a choice here.

As the SP angle goes, seems like most of their earliest success has come outside the US, but I wonder if domestic broadband ISPs that don't have a video strategy might find this idea appealing since this could give them some OTT content and a nice user interface plus access to the broadcast TV channels and perhaps some additional incremental revenue coming in the door.  But I don't see traditional cable MSOs giving this much of a second look unless they can see no other way to put together a bare-bones video subscription package and use Sezmi as a save tactic. JB


Jeff Baumgartner 12/5/2012 | 4:52:38 PM
re: Sezmi Dumps No-Frills Pay-TV Service

Seems like int'l is where it's at for Sezmi right now; in addition to the deal in Mexico, it's also hooked up with YTL Communications  in Malaysia. We're already seeing alot of broadband-QAM hybrids in the cable world, but it will be interesting to see what sort of traction there is for broadband-broadcast hybrids and what sort of factors are making type of approach appealing in those two int'l markets. JB


Jeff Baumgartner 12/5/2012 | 4:52:38 PM
re: Sezmi Dumps No-Frills Pay-TV Service

Hey Norman,

And didn't Moviebeam and USDTV both tap into broadcast spectrum and use datacasting, too?  I realize that Semzi moved away from that idea after it shut down the Select Plus tier in Los Angeles, but it's a technology that starting to get quite the stigma to it based on all these failed attempts.  And it seems that these guys all ran into similar issues trying to deal w/getting/renting spectrum from broadcasters.

But I was not aware of that this sort of thing was tried in the 1970s. Sounds more cutting edge than Mr. Microphone, anyway. But the idea of using spare bits in the transport stream sounds very white spaces broadband'ish to me, and that idea may indeed have a future.  JB



dvb4catv 12/5/2012 | 4:52:37 PM
re: Sezmi Dumps No-Frills Pay-TV Service

Geocast Network Services was one of the companies that made a run at this type of service.



I wish I could remeber the compnay in the 70's. I think NBC was an investor. Over the years these ideas keep and other ideas keep popping up.

Of course I made a run at it in the 80's transmitting data to computer usess using a satellite receiver that plugged into a computers PCI Buss. It was reallymore of a labor of love and a goof off project. I brodcast USENT News in the 80's via satellite. Filtering of content was done more or less real-time at the PC. This all was prior to internet conenctions that were aavailable to individuals.

Usent news is still going I think it runs over 2mbps realtime in much the same way.

Although eventually we provided internet conenctions as well when it was part of the NFS. Mostly pirate and porno data now.

With Pagesat you could send a page to a pager from your terminal. Sounds like Twitter in a way. At the time paging companies could care less about these applications and instead seemed to focus on sercvices the general public, drug dealers etc.

the thing that amazes me is that services like linkedin are based upon old ideas like Special Interest Groups that were part of Usenet News. The difference is that these were not originally based upon making money but sharing information. These services now have fancy GUI Interfaces and a compnay that provides centralized service that collects information and makes money on it with ads and targeting groups.

craigleddy 12/5/2012 | 4:52:34 PM
re: Sezmi Dumps No-Frills Pay-TV Service

It's going to be very difficult for any of these OTT box players to reach critical mass, no matter how innovative they might be. In addition to the technology, operations and distribution costs, they've got to devote a lot for marketing to raise awareness of who they are, then persuade enough consumers to buy another device for their homes. Even the big guys, Apple TV and the Google TV boxes, have failed to capture significant consumer interest so far. It's no wonder they'll try to align with service providers and make more inroads in the international market, and both of those routes aren't easy either.



Jeff Baumgartner 12/5/2012 | 4:52:23 PM
re: Sezmi Dumps No-Frills Pay-TV Service

And there are alot of OTT  boxes out there for what limited  market there is for them from a service provider partnership point of view... Carol's Wilson's story on Ringgold today is a good example of a company that could probably use Sezmi, but it's a very small telco, so Sezmi could use many many more like it. JB


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