Sezmi charts a new path to competition with cable
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Sezmi stunned subscribers in Los Angeles Friday night by telling them it would no longer be offering a package of popular cable networks as part of its pay-TV service. But the company isn’t scaling back, co-founder Phil Wiser said in an interview -- it’s switching technologies.
Sezmi positioned itself as a low-priced alternative to cable when it made its debut here about a year ago, offering a basic tier for $5 a month and a ‘Plus’ package for $20. The basic tier consisted of local digital TV channels transmitted over the air to a high-tech indoor antenna, plus YouTube, podcasts and broad selection of video-on-demand programming delivered through subscribers’ broadband connections. The ‘Plus’ tier added 23 cable networks, which were transmitted over the air by local broadcasters who had agreed to share their spectrum with Sezmi. It was available only in Los Angeles; in 35 other markets, Sezmi was offering just its $5-a-month service.
Using local stations to deliver cable channels was efficient, but striking the necessary deals with broadcasters in each market was time-consuming and expensive. So the company decided instead to transmit that programming over broadband, expanding on the technology it had built for its video-on-demand service. ‘If we can deliver those signals over a broadband connection,’ Wiser said, ‘why would we go city by city? We would take the live signals, whether they’re cable channels or other live signals, and deliver them the same way we deliver on demand.’
In other words, instead of being a hybrid of broadcasting, datacasting and online video, Sezmi is switching to a more conventional ‘over the top’ model that combines local broadcasts with broadband. The Plus tier will return ...
... via broadband, probably next year, Wiser said. To get an idea of what it’s planning for the U.S., Wiser pointed to what the company has been doing overseas. For example, it just joined a Malaysian conglomerate in announcing a package of phone, Internet, mobile and TV services, delivered across Malaysia through a new 4G wireless network. ‘In these developing countries in particular, this hybrid all-wireless solution we think is where the rest of the market is going to move,’ Wiser said, noting that the wireless networks are cheaper to deploy and maintain than a conventional cable or fiber-optic system.
The company plans to remain a low-priced pay-TV service, which means it won’t offer all the programming its competitors do. Its soon-to-be-defunct Plus service didn’t include ESPN, regional sports networks or premium movie channels, and it seems unlikely that the broadband version will be any different.
‘Large numbers of [pay TV] consumers are paying an extraordinary fee for something they don’t watch,’ Wiser said. ‘We’re going to be selective, we’re going to stay on point with an offering that’s not for everybody.... It’s still going to be driven by value.’
Meanwhile, some cable programmers are pushing Sezmi for a more comprehensive offering that lets subscribers be ‘able to access the programming that they paid for independent of what screen they’re on,’ Wiser said. The company has built the technology to support this, but it’s still in talks with programmers about a broader channel lineup that it can offer across the U.S. As a result, Sezmi will be deploying the new version of its service outside the U.S. first.
Related:
Sezmi to scale back service in L.A.
-- Jon Healey
Healey writes editorials for The Times’ Opinion Manufacturing Division.
