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If you are a regular and longtime reader, you would know I have written about the folly of startups trying to develop delivery boxes for TV, which sit on top of existing cable/satellite/DVR boxes on current TV services. It is ultimately about trying to get rid of the box, or at least the box clutter. Another one has officially announced it plans, and from the looks of it, a very ambitious one. Sezmi is the new brand name for the company previously codenamed Building-B, which we have written about before. The idea is not a separate movie box (a la the-dead-Moviebeam or Vudu), or an alternative content service (like Akimbo), but to completely replace your existing cable or satellite service with one box, and one digital TV receiver. It sounds a bit too good to be true, and to find out, I got a demo earlier this month from Phil Wiser, Sezmi co-founder and former CTO of Sony (NYSE: SNE), and CEO of the new venture Buno Pati.
The service’s backend is complex to explain: it marries terrestrial digital broadcast TV delivery system (which most of the existing cable/satellite consumers have never used or known about) with existing broadband service, and replaces a user’s existing cable or satellite service entirely, including their existing boxes. It has tied up with big TV infrastructure providers like Harris Corp and Sun to enable the service. The service will start trials in pilot markets now. It is positioning itself as a co-branded service providers with other ISP, telcos without TV service, and even retailers, and will launch commercially with these providers later this year.
On the service side, it has developed an interesting personalized service which allows up to five users (in say a family) to see different views of what they like and watch, when they turn on the TV. This is done through the different profile buttons on the remote control. On the content side, its digital TV receiver will catch all the networks in HD, for free of course, and then any additional cable/specialized channels, for which it is doing direct deals with media companies…these will be served through spare spectrum leased from local TV stations (this is what it tied up with Harris for). Besides the linear channels, the on-demand part will be stored on a terabyte hard drive inside the main box, and will be served through the broadband/Internet connection. It is yet to announce the content deals.
The key challenge will be distribution in the deeply entrenched duoploy of cable and satellite, and then explaining the complex, feature-rich service to consumers. Then the hue number of deals to get all the cable/specialized channels. Though the company is not disclosing the final price of the service, Pati and Wiser explained to me that the cost will come to about half the existing tiers of average cable service…some of those hurdles could be overcome by pricing it lower.
Also, it has brought on some serious executive and board talent, including Andy Lack, the chairman of Sony BMG Music Entertainment, who is on the board. Investors include Morgenthaler Ventures, Omni Capital, Index Ventures, TD Fund, Legend Ventures and Western Technology Investments, and it has announced $17.5 million in its first round, but had raised another undisclosed amount from the same investors. Some more additional details in this Forbes story as well.