Sezmi drops basic cable channels

Sezmi, the hybrid broadcast/over-the-top Internet service, announced last week that it will discontinue its $19.99/month bundle of 23 basic cable channels. The cable channel service was only launched in a portion of the Los Angeles market, and Sezmi claims that customers didn't want it, although it was the only thing differentiating the Sezmi service from a good over-the-air antenna.

Now, Sezmi is falling back to a package combining broadcast TV, video-on-demand and Web content for $4.99/month. However, in order to use the Sezmi service, subscribers need a high-speed Internet connection and Sezmi's $150 bundle of a broadcast antenna and 1 Terabyte DVR. By comparison, consumers could subscribe to the ivi TV service for $4.99, which only requires a high-speed Internet connection and runs on most personal computers.

I don't think that lack of customer interest was the only, or even the primary, reason why Sezmi dropped its cable package. However, Sezmi now has an additional problem--many customers in its 35 other markets bought the Sezmi system with the expectation that they would eventually get access to the cable channel package. Now that the cable channel option is dead, I expect many users to discontinue the service or demand refunds.

Sezmi has changed its focus to providing IPTV services for telecom providers in countries with minimal infrastructure, such as the company's recent deal with Malaysian service provider YTL Communications, using YTL's LTE wireless network. As a result, the eventual discontinuation of its U.S. service may not be a big problem. However, Sezmi's problems once again illustrate the difficulties for new players trying to break into the U.S. multichannel video business.

Should You Get a DTV Converter Anyway?

It's impossible to watch television in the U.S. lately without seeing ads reminding viewers that analog transmissions will end on February 17, 2009 (except for low-power stations.) Like most viewers, I've ignored these messages, because I'm a cable subscriber, and over-the-air service is lousy in my area. However, there's potentially a good reason to get a coupon and buy a converter, if you have one or more sets with analog tuners: Over-the-air broadcasters will be able to multicast--send multiple subchannels of programming within a single digital channel. In my market, there are three stations that are already multicasting, and I receive their multicast channels on Comcast cable. However, there is no FCC rule that requires cable or satellite operators to multicast every channel put on the air by broadcasters.

In my market (San Francisco/San Jose), the subchannels of commercial broadcasters are being used for weather services and news rebroadcasts--nothing astounding. Nevertheless, broadcasters are being offered a plethora of programming to fill these new subchannels, and some of it might be interesting. In any event, if you've got some analog sets and you're not planning to toss them out anytime soon, you might consider getting some of them digital converter coupons, and then purchasing a converter box.

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