Convinced that there’s limited consumer interest in so-called “skinny” bundles, Layer3 TV, a self-described “next-generation cable operator,” has pushed ahead with the launch of a full-freight pay TV service in Chicago that features a baseline package of more than 200 channels in HD, including local broadcast TV feeds, that starts at about $75 per month.
Layer3 TV, which debuted service in Chicago over the Labor Day weekend, is entering the market with a baseline package called “allHD Platinum," along with a variety of genre-focused add-on packages, premium packages, and some a la carte options.
Layer3 TV still isn’t saying precisely how it’s getting service into the customer's home, since it doesn’t own the last-mile access network. However, industry sources have said that Layer3 TV is securing capacity from other area providers (Comcast and RCN are among the incumbent MSOs in the Chicago area). Still, Layer3 TV does consider itself a facilities-based MVPD that delivers a managed IPTV service.
Though there are lingering questions about that last mile element, Layer3 TV does provide just about everything else, including the installation, a fleet of electric-powered BMW i3s for its field techs, the in-home equipment, the user interface/guide, and the billing and customer care components.
“It’s concierge cable,” explained Lindsay Gardner, Layer3 TV’s chief content officer, the industry vet who has been spending most of his waking hours during the past two years carving out the MVPD’s carriage deals.
Layer3 TV is starting off with a service delivered to a high-octane, 4K-capable gateway that works with smaller client boxes that provide the same functionality as the main device. Gardner said Layer3 TV has also locked in content rights for a TV Everywhere, Look Back and Start Over services that will be activated in the coming months.
"We will be activating new features all the time and will be adding new channels and new markets all the time,” he said.
Layer3 TV’s basic package features the local broadcast network and a large array of basic cable channels, including mainstays such as A&E, AMC, Cartoon Network, Discovery, Disney Channel, E!, Freeform, FS1, FX, History Channel, IFC, TLC, TNT, Turner Classic Movies, MTV, and The Weather Channel, to name but a few.
Early on, that baseline offering is being complemented by thematic add-on tiers that include Sports & Info PLUS (examples: ESPN Classic, Great American Country, Pac-12’s regionals, Ride TV and Fox College Sports); Movies & Music PLUS (Chiller, an EPIX multiplex, Reelz, Sony Movie Channel, among others); and En Español PLUS (CNN en Español, Discovery Familia, TBN Salsa and Nat Geo Mundo, among others).
Layer3 TV is also pitching a handful of premium multiplexes – EPIX PLUS, HBO PLUS, Cinemax PLUS, Showtime PLUS (noticeably absent from that list is Starz). Layer3 TV is also selling some services on an a la carte basis, including Aapka Colors and Fox Soccer Plus.
Wired reported earlier this year that Layer3 TV will be delivering HD into the home at less than 4 Mbps using the bandwidth-saving HEVC codec.
Per the company, pricing ranges from about $75 on up and is dependent on programming choices and configurations, and believes that its packages will always be competitive with like offerings from incumbent providers. The base package also includes Layer3 TV’s primary gateway/whole-home DVR and a smaller client device. Customers can rent out more devices for an additional fee.
In addition to the beefy basic package, Layer3 TV “will do niche better than anybody does niche,” Gardner said, noting that Layer3 TV’s content team negotiated all of its own carriage deals and has 20,000 pages of documentation to show for it.
Execs from several programmers, including Disney, Scripps Networks, Viacom, and The Weather Channel, praised Layer3 TV’s tech and approach in the MVPD’s programming release.
An example: “Layer3 TV’s user interface and packaging options offer a fantastic environment, taking advantage of the latest technology to present our content. We continue to look for new ways to reach consumers and Layer3 TV offers a great avenue to do that,” Justin Connolly, EVP of affiliate sales and marketing for Disney and ESPN Media Networks, said in a release.
Layer3 TV also has a 4K offering in the works. Gardner said the MVPD has already inked a deal for its first full-time 4K channel, and that several “major programmers” will be offering VOD content in the format. “In every conversation I have with a movie studio or programmer, 4K comes up,” he said.
Layer3 TV has not yet announced where it will launch service next. It’s been conducting a trial in a couple of markets in Texas under the Umio TV brand. It’s believed that Suddenlink (now owned by Altice) has been partnering with Layer3 TV in that effort.
Layer3 TV is also complementing its main video offering by integrating over-the-top and social media services, including YouTube and Facebook, and is expected to expand that slate in the coming months.
Denver-based Layer3 TV has raised about $100 million, and Altice and Paulson Co. are reportedly among its unannounced investors.
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