Cable Operators

Sezmi Says, ‘See Ya’

10/03/2011 12:01 AM Eastern

Turns out that being cheaper than cable TV wasn’t enough.

Sezmi last week officially shut down its hybrid broadcast- Internet video service for consumers — which it once touted as less expensive and more personalized than pay TV services.

The startup cited its shift to sell its platform to service providers in the U.S. and abroad. “We regret to inform you that Sezmi is discontinuing its consumer service,” the company said in a notice to customers. “As of Monday, September 26, 2011, you will no longer be able to view or record broadcast TV programming through your Sezmi System.”

In the message to customers, Sezmi said it changed its business focus to providing its product and technology platform to service providers.

Earlier this spring, Sezmi president Phil Wiser acknowledged in an interview with Multichannel News that the company was having a tough time luring consumers away from pay TV services in the U.S. and was having better luck with service providers internationally (“Sezmi Downshifts Retail Play,” April 4, 2011).

Sezmi, founded in 2006, has raised more than $92 million to date from investors including Morgenthaler Ventures, OmniCapital Group, Index Ventures, TD Fund, Legend Ventures and Advanced Equities.

The company had expected to shake up the cable and satellite-TV market with an inexpensive bundle of live and video-on-demand content, delivered using a combination of broadcast airwaves — leased from local TV stations — and broadband Internet. Sezmi never disclosed how many subscribers it had signed up.

Sezmi launched a premium package with 23 cable networks for $19.99 per month in Los Angeles in the spring of 2010, but eliminated the cable option in December. Instead, it shifted last year to a $4.99-per-month package offered in parts of 36 U.S. markets, which delivered broadcast TV plus free and fee-based videoon- demand and Web content.

The service required consumers to pay $150 for the Sezmi antenna and 1-Terabyte DVR; Sezmi had previously charged $299 for the system.

Sezmi told customers that while they can’t watch or record live TV, they will still be able to view movies and shows that have been saved to the DVR. In addition, the company is letting customers access movies and shows for free from Sezmi’s on-demand catalog through Nov. 1, 2011.

“We sincerely appreciate the enthusiasm and loyalty our customers have shown,” Sezmi said in the customer notice. “Sezmi was launched to provide customers a new video entertainment choice that provides a premium video experience at a more affordable price. With our new company focus, we will continue to develop our video solutions and provide them to service providers who will be in a better position to offer the service to much broader customer base.”

September