IP Democracy: Sezmi: Destined for the Dustbin of TV Appliances
Through a slick PR campaign, a start-up called Sezmi (formerly Building B) is grabbing breathless headlines as the next great thing in TV 2.0 by promising to offer a set-top based video delivery service that works via a complicated hybrid datacasting-broadband delivery system. Sezmi, which has been kicking around for a couple of years, officially announced today that it will launch trials of its complex service in preparation for full-fledged commercial launch. Even more than other box-based alternative video delivery pipe dreams (think Moviebeam, USDTV, iBlast,Geocast and more recently the also much-hyped movie-only Vudu), Sezmi is destined sooner or later, and I would wager sooner, to join the dustbin of TV appliances, no matter how much glowing press it generates today.
Why? For one thing, to make its service work Sezmi needs to lease excess capacity from around two to four broadcast stations per market to deliver the most popular TV channels. Sezmi plans to use digital spectrum to deliver over-the-air signals plus around 24 to 40 of the most popular cable networks, with other TV content shipped via broadband to a DVR-type device that has one terabyte of storage.
But as Glen Dickson points out, most TV stations don't exactly have a lot of excess capacity to lease out and Sezmi won't say where it has struck deals with local broadcasters. In fact, despite the elaborate PR push and trial announcement, Sezmi doesn't offer any details about the markets where it will test its service or how much it plans to charge for the service or much of anything else.
Moreover, Sezmi is going to have a hard time leasing enough capacity to offer high-definition TV signals and as one major telco representative -- and Sezmi is targeting telcos with its service -- said last night, there are a lot of people out there with $2,000 TV sets. Dickson works out the math for Sezmi:
For example, if Sezmi were fortunate enough to get 15 mbps from each station -- which is probably wildly optimistic, as it would mean that the local station would be using less than 4 mbps for its active video signal -- that would still only give it a total payload of 60 mbps in a market. Even when using advanced MPEG-4 compression at very low data rates, which Sezmi said it is, that amount of bandwidth probably can’t support more than 10 HD channels, if that.
For another thing, Sezmi needs to cut deals with TV networks to retransmit and resell their content. But that's easier said than done, particularly for a start-up, and Sezmi won't say which program networks plan to participate in its trials.
One of the biggest barriers is that Sezmi is not aiming its service at consumers but is angling to land deals with wireless or telco partners. The most likely candidates are the biggest telcos such as AT&T and Verizon, both of which have spent billions to build out their own TV delivery services and aren't likely to opt for such a messy alternative.
There are many other issues on top of these major stumbling blocks (for example, as Chris Albrecht notes, it's going to be hard to channel surf the broadband-delivered content, which is true of other Internet-to-TV devices such as Apple TV, but Sezmi is positioning itself as a multichannel video delivery alternative). Sezmi, however, was founded by a former Sony CTO, Phil Wiser, and a former Harvard engineering professor, Buno Pati, and is backed by $17.5 million in A-list venture funds.
This blue-chip background combined with a sophisticated PR push is responsible for all the buzz generated today. But don't buy it. Like so many other similar ventures before it, Sezmi is an exciting concept, imbued as it is with the prospect of bypassing the traditional TV gatekeepers. Someday someone will find a way to loosen the tight grip that cable, satellite and, lately, phone companies have on multichannel video delivery and marry up the infinite capacity of the Internet with the TV set. Sezmi won't do it.
Posted by Cynthia Brumfield on May 1, 2008 8:11 AM to IP Democracy