Startup NimbleTV To Build Set-Top Farms For Internet TV Play

NimbleTV, a 15-employee startup in New York City, is promising to sign up anyone anywhere in the world for pay-TV service locally, and then deliver live and recorded programming over the Internet to a slew of devices -- an approach the company maintains is perfectly legal.

NimbleTV's backers include Tribune Co., which owns or operates 23 local broadcast TV stations across the U.S.

Here's how it works, according to CEO Anand Subramanian: NimbleTV signs up for satellite or cable TV service on behalf of its customers, and manages the installation of set-top boxes at a physical location somewhere in a given market. The company then re-encodes the signals to deliver live TV or DVR recordings over the Internet, to wherever the customer may be.

In addition to their monthly cable or satellite TV bill, customers would pay an additional monthly fee -- of about $20 -- to NimbleTV.

"We effectively are providing you a local point of presence," Subramanian said. "We have spent enough time doing the necessary due diligence that we believe we are not breaking any laws."

Subramanian said the startup's initial beta test is kicking off this week in New York City. Eventually NimbleTV expects to have several hundred test users, who will be able to access 26 channels.

NimbleTV is not disclosing which pay-TV providers it will use for the test, or for the subsequent commercial launch targeted for this summer. Major operators in the New York area include Time Warner Cable, Cablevision Systems and Verizon's FiOS TV. Subramanian said the startup also will offer satellite TV service, which would be provided by either DirecTV or Dish Network.

Asked what would happen if a cable or satellite TV operator refused to install service in one of NimbleTV's proxy locations, Subramanian responded, "We believe we are bringing in new customers for them... If they don't [work with NimbleTV] there will be another MVPD [multichannel video programming distributor] who will."

NimbleTV is the latest startup aiming to shake up the current TV landscape with a multiscreen Internet-delivered video offering. However, in contrast to another New York-area startup, Aereo -- which is being sued by broadcasters because it believes it is not obligated to pay retransmission fees -- NimbleTV's approach ensures that everyone in the TV ecosystem still gets paid, Subramanian said.

"We wanted to make sure all the stakeholders in the industry are not harmed, either contractually, legally or economically," he said.

The initial reaction from pay-TV operators that NimbleTV has approached "has been very, very positive," Subramanian claimed. "They stand to get more subscribers."

In addition to Tribune, NimbleTV's other investors include venture capital firms Greycroft Partners and Tribeca Venture Partners. Subramanian declined to disclose how much funding the startup has raised but said it's "a pretty good chunk."

NimbleTV will provide a full lineup of cable programming, depending on which package a customer selects. On its website, the startup displays logos from networks including ABC, Fox, NBC, TNT, TBS, USA Network, Bravo, ESPN2, History, Fox News, CNN, MSNBC, MTV, Nick, Disney Channel, ABC Family, Lifetime, Syfy, Discovery, TLC, Travel Channel, Food Network, FX, IFC, NFL Network and MLB Network.

The service is not aimed at luring cost-conscious consumers, Subramanian acknowledged, given that it requires users to pay for a full TV subscription plus the monthly NimbleTV fee: "This is not a product for people who want to cut the cord," he said.

Subramanian said the 26 channels in the beta test represents a smaller package than what will be available in the commercial version of the service. NimbleTV will pay for the service on behalf of customers in the trial.

After receiving the TV programming at set-tops at different locations in New York City, NimbleTV will use proprietary technology to stream the video to customers. The startup is using some off-the-shelf technologies, including transcoders, Subramanian said.

The DVR component of the service will offer 10,000 hours of DVR storage space -- or more, according to Subramanian. The DVR part of the service will be offered in tiers, so "you can take 1,000 hours and add more space as you go," he added.

NimbleTV also expects to launch TV offerings in India and eventually plans to roll out in other countries.

Subramanian formed NimbleTV in January 2011. Previously, he was the founder of ContextWeb, an online advertising exchange that merged with digital marketing company Datran Media to form PulsePoint.