Altice and Paulson Co. are among the unannounced investors in Layer3 TV, the Denver-based, next-gen cable operator that has already raised about $100 million, according to Variety.
Layer3 TV declined to comment on its financing activities, but Variety noted that Altice’s investment comes way of its acquisition of Suddenlink Communications, though the publication said Altice and Layer3 TV have “been quite cozy with each other for some time.” Altice, which closed its $17.7 billion purchase of Cablevision Systems last month, also declined to comment on its relationship with Layer3 TV.
Industry sources said there’s been some external interest in joining the investment mix at Layer3 TV, and that there could be some interest from those that bring strategic value to the emerging MVPD. Layer3 TV’s announced investors include Evolution Media Partners and North Bridge Venture Partners.
Layer3 TV has been tight-lipped about its specific go-to-market strategies, though it appears to have teamed up with Suddenlink for the trial of a service under the “Umio” brand in the MSO’s territories of Midland and Kingwood, Texas.
In addition to looking at deployments in which Layer3 TV could ride the distribution rights of another operator (such as it apparently did for the Suddenlink trial), the emerging MVPD has also been developing its own pay TV service by locking in its own distribution deals with programmers and other content providers, per industry sources. Those multiple approaches would expand Layer3 TV’s deployment options.
Layer3 TV confirmed that it will “soon” launch service in the Chicago market, home to incumbent MVPDs Comcast, RCN and AT&T.
In addition to Chicago, Layer3 TV has been seeking “installation supervisor” positions in Houston, Denver and Alexandria, Va., which fuels speculation on other markets that Layer3 TV might be targeting for future service launches.
According to Variety, Layer3 TV intends to launch a service in Chicago under its own brand.
A lingering question is how Layer3 TV will get service into the home via the so-called “last mile.”
According to one industry source, one way Layer3 TV intends to do this is by securing capacity on the cable operator’s IP network paired with a revenue sharing agreement with that MSO. However, Layer3 TV, which has been marketing itself under “The New Cable” tagline, would in essence provide the market with a fresh, alternative pay TV provider to consider because Layer3 TV would be the one installing, operating and providing customer care for the service. Layer3 TV will use electric-powered BMW i3 vehicles in its service fleet.
Though Layer3 TV hasn’t said much about how it will price and market its services, its web site does shed some light on some of the features it will provide in its including no annual contracts, 4K-ready wireless set-tops, a lineup of more than 150 HD channels, personalized profiles for each viewer in the home, and a DVR that can record up to eight shows at once, with storage ranging from 1 terabyte to 3 TB. An image of the Layer3 TV remote also shows a button for a microphone, which suggests it will support voice navigation.
Layer3 TV CEO Jeffrey Binder told Wired earlier this year that Layer3 TV would be launching in Chicago and a “couple of other major cities on the East and West coasts.” The company also told the pub that it would forge deals with “large infrastructure companies” for the last mile links into customer homes.
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