“We’re not ready to discuss our future product roadmap . . . but it was a useful tool to demonstrate to the FCC where innovation is headed in the TV space for both over the top and over the air/QAM,” we were told by Boxee VP of Marketing Andrew Kippen. The filing itself also states that “both the Boxee Box with Live TV and the products under development provide consumers with competitive alternatives to traditional pay cable delivered via rented set top boxes.” Of course, one could argue that any over-the-top offering with access to online sources like Netflix can be an alternative to your cable box — but that is already true for the existing Boxee Box. The need to black out two entire paragraphs in the filing leads me to believe that Boxee is instead working on additional ways to access and consume over-the-air broadcast and cable TV.

So what does it have in store for us? Here are some possibilities:

• DVR functionality. This has been the most-requested feature ever since the Boxee Live TV tuner came out earlier this year. The tuner currently only displays what’s airing at any given time, but a software update and an attached hard disc could turn the combination of Boxee Box and Live TV tuner into a full-fledged DVR.
• A Boxee TV. Viewsonic was supposed to release a TV set powered by Boxee last year, but it scrapped its plan when consumer demand for smart TVs didn’t materialize. Of course, that doesn’t mean that another TV manufacturer couldn’t fill the gap. A TV with a built-in tuner would obviously also have access to Boxee Live TV and as such be impacted by any attempt to encrypt basic cable.
• A revamped Boxee Box with internal storage. This would go well with any DVR offering, in part because not every consumer wants to have an external hard drive and a USB dongle dangling from their Boxee Box. Of course, it would also be possible to directly add the TV tuner to the Box. But this could bring costs up even further, so I would expect this to be sold separately for the foreseeable future. Iomega is already selling a Boxee device with a hard drive in Europe, but the company told us it doesn’t have any plans to bring the device to the U.S.
• A cable set-top box. Yes, you read that correctly. Boxee has been big on cord cutting rhetoric lately, but the company is reportedly also talking to smaller cable operators about using Boxee’s platform as an alternative to the traditional cable box. This could be done with the existing Boxee Box and a Live TV tuner, but one could also imagine slightly revamped hardware that could offer subscribers online video, basic cable channels and a DVR for a small monthly fee, much like Sezmi used to offer. But instead of selling it directly to consumers, Boxee would offer the device through a regional cable company.

We will likely have to wait a while until we know what the company has up its sleeve. However, the success of the Live TV tuner — the device is currently sold out and on back order — shows that the company is clearly on to something here. And while the list of possible products above is admittedly pure speculation, it goes to show that there is a lot of potential for Boxee to innovate in this space.

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Here are the top five reasons Sezmi was unable to convince cord cutters to pony up for its service:

1. Expensive proprietary hardware

When Sezmi first launched, its combination of over-the-air tuner plus online streaming hardware cost a whopping $299. The price came down as time went on, but even at $149, the hardware was too expensive for most people to justify purchasing — especially since the hardware was incompatible with other services. Moreover, consumers have caught on that proprietary systems rarely pan out, meaning you’re often left with a useless piece of hardware if the service shuts down, as Sezmi eventually did.

2. A confusing value proposition

Not only was Sezmi’s hardware expensive, but it wasn’t clear what users were actually getting with the package. In addition to the one-time hardware cost, users also had to pay $4.99 a month for access to broadcast content — like ABC, CBS, Fox, NBC, PBS, Telemundo and Univision — which most would be able to access through a regular old HDTV antenna, and without having to pay a recurring monthly fee. Live in Los Angeles? Then you were in luck, and could sign up for a $19.99 per month Plus Service, which also included cable networks like Bravo, CNN, Comedy Central, Discovery, MSNBC, MTV, TBS, TNT and USA. Either way, it wasn’t clear why a user would choose Sezmi over streaming services like Netflix or Hulu Plus.

3. Not enough content

For the amount of money Sezmi was asking its users to put down for hardware, plus the amount they would have to pay each month, there was very little to differentiate the service from alternative video sources. Outside of a few live broadcast channels, Sezmi didn’t offer much that users couldn’t find elsewhere. Sure, it had access to some streaming content like YouTube videos, but that wasn’t enough to compete against the 250 or so channels available through streaming set-top boxes from the likes of Roku or Boxee.

4. Consumers not cutting the cord quickly enough

While there are plenty of reasons to believe what Sezmi had to offer just wasn’t good enough, there’s also the matter of timing. Sezmi might have been a little ahead of the adoption curve, in terms of releasing a hardware-based solution to help users cut the cord and not rely on cable anymore. Sezmi’s hardware was first announced in 2008, but didn’t become widely available until last summer. Even so, the number of users who have cut the cord over the past year or so looks to be limited, even if we expect that number to grow in the future.

5. Too many other choices out there

At the end of the day, though, users who wished to cut the cord had a number of hardware options and services to choose from. On the hardware side, Sezmi was not only up against streaming boxes, but connected TVs and Blu-ray players, as well as game consoles offering streaming services that people already had in their houses, not to mention the vast amount of content that consumers could access from Netflix, Hulu Plus, Amazon Prime Instant Videos and other services. With so much choice out there, it was too difficult for Sezmi to make a dent in the market or convince users why they should standardize on its proprietary hardware or pay for its broadcast TV service.

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Why Google TV Wasn’t a Hit — and Why It’s Too Early to Write It Off; after a spate of mostly poor-to-middling reviews, Google TV products due out at the important Consumer Electronics Show in early January have been delayed. (Rob Hof’s blog)

Hollywood Dreams Take Digital Direction; talks between Google and Miramax over a digital-rights deal has some Hollywood insiders seeing green for funding-starved independent studios. (NY Post)

Sezmi Still Seeking Telco Partners; its plan to shut down its Plus service and discontinue use of digital broadcast spectrum is not a sign the company is abandoning its original strategy of partnering with telcos to offer premium video. (Light Reading)

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AOL Snags Amber J. Lawson as Head of Video Programming; Lawson will oversee AOL Studios, AOL Video hub, AOL.com and deals with 3rd party production companies making original content for the network. (Tubefilter)

YTL recently built out a 4G WiMAX network in Malaysia, which cost some 2.5 billion MYR ($802.6 million) to deploy. According to The Star Online, YTL will spend an additional 1 billion MYR to 2 billion MYR to roll out digital TV on its network to TV screens, computers and via mobile screens. As part of the deal, YTL will also reportedly take a 20 percent stake in Sezmi.

Sezmi offers a video service alternative to cable in 36 markets throughout the U.S. The startup sells a hardware package for $149 that includes an over-the-air receiver and online video set-top box to deliver on-demand video from a variety of content partners. For $4.99 a month, users can access live, linear broadcast TV programming over the air, along with on-demand over-the-top content available in an ad-supported or pay-per-view model.

Sezmi raised $17.3 million in a round of financing disclosed to the SEC last month. That round of financing came less than a year after it raised $25 million and launched its initial trial of services in Los Angeles.

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Sezmi is an over-the-top cable wannabe, offering up a mix of live, over-the-air programming, along with online, on-demand video content. The company sells a combination over-the-air HD tuner and broadband video appliance for $149 that allows users to watch live broadcast stations and also get select online content for a low monthly fee.

Once users have purchased the company’s hardware, the $4.99 Sezmi Select offering gives them access to content from ABC, CBS, the CW, Fox, NBC and Univision content over-the-air. For $19.99 a month, the startup sells a Sezmi Select Plus offering that expands that content to also include select cable content from cable networks like Bravo, CNN, Comedy Central, Discovery, MTV, TBS, TNT and USA. For now, though, Sezmi only offers its Sezmi Select Plus package in L.A., with plans to make the $19.99 plan available to more subscribers later.

Sezmi has been rapidly expanding availability, as users in 36 markets throughout the U.S. can now purchase its hardware and use the service. The company has also struck a deal with Amazon to sell its hardware online.

Sezmi’s most recent round of funding comes less than a year after the startup raised $25 million and launched the initial trial of its services in a Los Angeles test market.

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Ranking the Digital Living Room Barbarians; the clear winner in Apple TV is Netflix, which has navigated the digital entertainment landscape better than anyone. (ZDNet)

Exclusive Deals Make 3-D TV Audience Even Smaller; avid sports fans can watch 3-D broadcasts of live sporting events, such as the U.S. Open, but exclusive distribution deals limit who gets to see what. (CNET)

5min Media Partners With IGN Entertainment; IGN Entertainment has joined the 5min Video Games Channel to semantically match short-form videos such as game reviews, instructions and news from top gaming brands across the 5min network of more than 800 sites. (press release)

The Sezmi hardware sells for $149.99 — down from its original price of $299 — and is available from BestBuy.com. Up until this week, its service had only been available in 15 markets, including its launch market of Los Angeles. The L.A. market is currently the only place where its Sezmi Plus service is available. For $19.99 a month, Sezmi Plus includes programming from a number of cable programmers, such as Bravo, CNN, Comedy Central, Discovery, MSNBC, MTV, TBS, TNT and USA. Everywhere else, only its Sezmi Select offering is available. Sezmi Select costs $4.99 and includes broadcast content from networks such as ABC, CBS, Fox, NBC, PBS, Telemundo and Univision. Users also have access to a DVR for recording live shows, as well as a wide selection of on-demand content and online video sites.

While Sezmi could provide one way for consumers to quit cable while still being able to access some of their favorite content, its offering is relatively limited so far. Without access to some highly sought-after cable channels — like ESPN — many users may choose to hold off before purchasing Sezmi.

But for those that are interested, the markets where Sezmi can now be used include: Albuquerque-Santa Fe, NM; Atlanta, GA; Boston, MA; Charlotte, NC; Cleveland-Akron, OH; Columbus, OH; Dallas-Ft. Worth, TX; Detroit, MI; Grand Rapids-Kalamazoo-Battle Creek, MI; Greensboro-High Point-Winston Salem, NC; Greenville-Spartanburg, SC-Asheville, NC-Anderson, SC; Hartford & New Haven, CT; Houston, TX; Jacksonville, FL; Kansas City, MO; Los Angeles, CA; Memphis, TN; Miami-Fort Lauderdale, FL; Milwaukee, WI; Minneapolis-St. Paul, MN; Nashville, TN; Norfolk-Portsmouth-Newport News, VA; Oklahoma City, OK; Orlando-Daytona Beach-Melbourne, FL; Philadelphia, PA; Phoenix, AZ; Portland, OR; Raleigh-Durham, NC; Salt Lake City, UT; San Antonio, TX; San Diego, CA; San Francisco-Oakland-San Jose, CA; Seattle-Tacoma, WA; St. Louis, MO; Washington, DC; and West Palm Beach-Ft. Pierce, FL.

Sezmi has raised about $71 million since being founded in 2006, including a $25 million funding round from existing investors ahead of its initial LA trial.

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Residents of Boston; Detroit; Houston; Kansas City, Mo.; Phoenix; Portland, Ore.; Miami, Orlando and Ft. Lauderdale, Fla.; and San Francisco will now be able to use the Sezmi hardware to get live and on-demand content from broadcasters like ABC, CBS, Fox and NBC, as well as broadband Internet video from YouTube and other online video providers. But unlike in LA, the system won’t be sold in Best Buy stores (though it will be on sale through bestbuy.com), and users won’t have access to certain premium cable content.

The Sezmi system includes an HD Media Recorder that gives users access to a mix of live, recorded, on-demand and online content, and can store up to 1,400 hours of programming, as well as an over-the-air receiver to capture broadcast and cable channel signals. The hardware is priced at $299, and users must pay an additional $4.99 a month for its entry-level Sezmi Select offering, which combines over-the-air broadcast content with a smart DVR and numerous online and on-demand videos.

The $4.99 Sezmi Select offering will give its users access to content from ABC, CBS, the CW, Fox, NBC and Univision content over-the-air. But new customers in the expanded markets won’t be able to view cable content that’s usually sold as part of its $19.99 Sezmi Select Plus package. Cable programmers whose content is available in that package include Bravo, CNN, Comedy Central, Discovery, MTV, TBS, TNT, USA and others. Sezmi is planning market expansion for Sezmi Plus Select later this year.

While there’s a convergence component to Sezmi being able to blend broadcast and broadband content together, the startup will face some stiff competition on that front from products like TiVo DVRs and Google TV-enabled devices, which offer similar functionality.

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The two-part Sezmi system consists of an HD Media Recorder that organizes a mix of live, recorded, on-demand and online content, and can store up to 1,400 hours of programming, in addition to an over-the-air receiver that brings in broadcast and cable signals.

The Sezmi hardware costs $299 and will go on sale exclusively in Best Buy locations throughout the Los Angeles area, including Los Angeles County, Orange County, San Bernardino County and Riverside County. The commercial launch follows a 1,000-person trial that Sezmi launched in the same area last November.

Once someone has purchased the hardware, live programming is available through one of two service plans. The first is a $4.99/month Select offering that enables viewing of major broadcast networks such as ABC, CBS, Fox, NBC, MyNetwork, PBS, Azteca, Telefutura, Telemundo and Univision. The second plan costs $19.99/month and also includes live and on-demand programming from cable networks like Bravo, CNN, Comedy Central, Discovery, MSNBC, MTV, TBS, TNT and USA. Both include a mix of pay-per-view programming and access to broadband content from YouTube, Crackle, On Networks and other online video providers.

While the system may appease consumers looking for a low-cost monthly pricing for its pay-TV service, the relatively high cost of the hardware could prove a stumbling block to mass adoption. Also, while Sezmi has assembled a good selection of live cable channels, some — like ESPN — are noticeably missing. For early adopters that merely want access to a limited amount of broadcast and cable content and are looking to lower their cable bill, Sezmi’s system could provide an attractive alternative.

Sezmi has raised about $71 million since being founded in 2006, including a $25 million funding round from existing investors ahead of its initial LA trial. According to the press release, Sezmi plans to expand the system’s availability to the rest of the country in late spring.

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