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Sezmi Continues Rollout

Sezmi, which aims to compete with cable and satellite operators with a new pay-TV service based on a mixture of broadcast and broadband delivery, is continuing its commercial rollout after successfully testing the service in Los Angeles last winter.

The Belmont, Calif.-based startup delivers some of its programming over the air by leasing part of broadcasters’ digital spectrum, and has been cited by the NAB as an innovative application for DTV. Sezmi announced last week that its entrylevel product, Sezmi Select, is now available in 36 markets nationwide. That represents an additional 25 markets beyond the 10 cities where the company launched Sezmi Select in June: Boston; Detroit; Houston; San Francisco; Kansas City, Mo.; Phoenix; Portland, Ore.; and Miami, Orlando and Fort Lauderdale, Fla.

New Sezmi cities include top 10 DMAs Philadelphia (No. 4), Dallas-Fort Worth (No. 5), Atlanta (No. 8) and Washington, D.C. (No. 9), as well as No. 13 DMA Seattle, where Sezmi had previously tested its system with stations owned by Fisher, Tribune and Daystar. Sezmi generally partners with two to four stations in a market, netting 15 to 20-plus megabits of usable bandwidth, according to Sezmi co-founder and president Phil Wiser. But the company isn’t disclosing what stations it is currently working with.

Sezmi, which was founded in 2006, delivers its service to a specialized set-top and indoor antenna through a hybrid transmission scheme it calls Flexcast. The Sezmi box has standard DTV reception capability for watching free, local over-the-air MPEG-2 broadcasts and can also receive MPEG-4 program streams that Sezmi inserts in a portion of the DTV spectrum. It also has a broadband connection for accessing online video and receiving guide data. The box, which is manufactured by Taiwanese conglomerate Tatung and is being sold online for $149.99, also has a terabyte of storage for DVR capability.

The mix of broadcast and broadband delivery is how Sezmi hopes to offer a costeffective alternative to existing pay-TV options. It plans to use the broadcast spectrum to deliver popular cable channels for a monthly fee, and the broadband pipe to give on-demand, pay-per-view access to thousands of TV shows and movies as well as the ability to watch free online content from YouTube and other Web sites. Sezmi also provides a personalized user interface that allows consumers to easily select their preferred mix of broadcast, cable and online content, and manage their time-shifted programming.

But the current Sezmi Select service doesn’t include linear cable programming, and as such is competing more with overthe- top devices than cable providers. For a monthly fee of $4.99, consumers who buy the Sezmi box can use the DVR and the program guide service and buy on-demand content from partners such as Discovery and Warner Bros. The only market where the full-fledged Sezmi experience, including cable channels, is currently available is Los Angeles. Sezmi customers in that market pay $19.99 a month for Sezmi Select Plus, which offers 23 cable channels from Turner, Discovery, NBC Universal, MTV Networks and others, but none of the offerings of cable sports giant ESPN.

Wiser says that Sezmi has been finetuning Sezmi Select Plus in Los Angeles and plans to roll it out to other markets later this year; Sezmi Select customers will be able to upgrade to the expanded service. Sezmi already has deals in place with programmers and local stations to offer linear cable networks in its current markets, he adds, but still needs to deploy headend equipment to most of its partner stations to receive and retransmit the programming.

Many broadcasters are eying mobile DTV as a potentially lucrative use of their spectrum, of course, and others are considering the possibility that the government will compensate them for voluntarily turning over part of their spectrum per the FCC’s broadband plan. But according to Wiser, Sezmi’s station partners haven’t shown any hesitation in moving ahead with their spectrum deals, which he views as a reflection of the financial uncertainty surrounding those alternative paths.

“We’ve been able to get spectrum in every market we’ve gone after,” Wiser says. “We have a business that works right now, and we’re writing checks today.”

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