Inching toward a launch it says is still on track for 2015, Layer3 TV has completed an additional funding round of $51 million. The Series B financing, which includes participation from Evolution Media Partners, North Bridge Venture Partners and other unnamed investors, brings the company's total funding to date to more than $80 million.
Denver-based Layer3 TV has been teasing its next-generation pay-TV service for more than a year, but details of the planned offering are still relatively scarce. For example, while executives say the company is "rapidly becoming a trusted and valued partner to the content community," there's no evidence yet of any programming deals.
CEO and Co-founder Jeff Binder has said repeatedly that the Layer3 TV service will be more elegant and user-friendly than traditional cable services. But beyond hinting at social media features and applications tied to the Internet of Things, the company has given very little indication of how it plans to streamline the TV experience.
Among the known elements of Layer3 TV is the fact that the company will offer some type of multiscreen service that's supposed to include 4K video delivery to user set-tops. Last December, the startup announced a partnership with SeaChange International Inc. (Nasdaq: SEAC), which includes the vendor's Nucleus video gateway software along with testing and integration services. (See Layer3 TV Signs SeaChange, Signals RDK Plans.)
Layer3 TV also boasts veteran leadership, including executives with long-time cable experience out of companies like Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable Inc. (NYSE: TWC), and Motorola. Co-founder and CTO Dave Fellows was previously CTO at Comcast from 2003 to 2008, and Layer3 TV hired Lindsay Gardner (formerly of Fox Networks) as Chief Content Officer last year.
So far, Layer3 TV has raised a lot of money and a lot of interest, but the industry is littered with TV innovators that have done the same with very little resulting success. Some, like Aereo, will continue to be remembered for their impact on the industry. Others, like Joost and Sezmi, will barely get a footnote in TV history.
As the pay-TV and broadband industries continue to consolidate, it will be harder and harder for startup companies to compete with the scale of a Comcast, AT&T Inc. (NYSE: T) or Verizon Communications Inc. (NYSE: VZ). Throw OTT providers like Netflix Inc. (Nasdaq: NFLX) and Amazon.com Inc. (Nasdaq: AMZN) into the mix, and the road gets even rougher.
Layer3 TV clearly has significant financial support and industry expertise. The question now is, can it turn those assets into a commercially thriving business?
— Mari Silbey, Senior Editor, Cable/Video, Light Reading