Sezmi presents TV 2.0

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We know what the second generation of the World Wide Web looks like -- a cornucopia of services and applications, not just text and graphics. But what might the Web 2.0 counterpart be for television? It will be digital, certainly, and offer far more programming from a greater variety of sources. It will make more shows available on demand, to meet the expectations of consumers who’ve been liberated by TiVo. It will be more interactive, to meet the expectations of advertisers spoiled by the Web. And it will be mobile. After all, every cell phone in the market will soon be able to show video, and TV flows inexorably toward any screen that can display it.

Today, a Silicon Valley start-up called Sezmi (formerly known by the more stealthy and Webster’s-friendly moniker Building B) goes public with its version of TV 2.0. It may not succeed -- the landscape is littered with the empty offices of firms that tried and failed to compete with the local cable operators -- but its approach shows what’s possible.

Sezmi was founded in 2006 by Buno Pati, a serial tech entrepreneur, and Phil Wiser, a former chief technical officer at Sony Corp. and Liquid Audio. Working through telephone companies, ISPs and major retailers, it plans to offer a version of pay TV that’s better than cable or satellite, yet with lower monthly fees. Its ability to deliver on those promises is hard to gauge, though; it claims that trials are starting in undisclosed pilot markets, but it hasn’t named any of its distributors or content providers, nor has it provided details about price or availability. On the other hand, it has attracted capital from half a dozen funders.

It also has demonstrated a working version of the service, using what appear to be production-ready versions of the equipment customers will have in their homes. That equipment come in two main pieces, Pati and Wiser said: a set-top box with a high-capacity hard drive for storing programs, and a sophisticated indoor antenna for receiving signals from local broadcasters. Together, the box and antenna will gather a full line-up of channels from three sources. Local digital TV channels will come in over the air, in high definition where available. Some programming from cable networks will be delivered over the air, too, using idle bandwidth in local stations’ digital channels, and the rest will be sent to the set-top box via broadband. The broadband connection will also be used for selected Internet feeds (e.g., YouTube videos).

At least four other ventures -- Geocast, iBlast, USDTV and Moviebeam -- have tried in vain to use TV broadcasters’ extra channel capacity for data or video services, but none offered a full-blown alternative to cable. Of course, competing with cable and satellite can be a fool’s errand for a start-up, too. But Sezmi is banking on comparatively low infrastructure costs to enable it to charge less than its competitors, and on its software to deliver a better experience to customers.

The company’s underlying assumption is that TV viewing is shifting away from scheduled programming in favor of on-demand viewing. Its set-top box can hold about 1,000 hours of video, whether they be time-shifted broadcasts or programs pushed to subscribers based on their viewing preferences. Its software is designed for a different approach to TV, too, eschewing the typical grid-like program guide in favor of customized lists for each member of the subscriber’s household. Those menus can change over the course of the day to reflect the viewer’s habits, Wiser saids -- for example, putting talk shows at the top of the list in the morning, dramas at the top at night.

Borrowing a concept from online search, Sezmi’s software will make it easy to hop from a show to related programs. Broadcast shows, recordings and online programming are integrated into common menus, blurring the distinctions between live and Memorex, online and off. And programmers can add another navigational option by creating portals within the program guide, steering viewers to their shows or Web-based content. Although Wiser said Sezmi is capable of incorporating any online video site with a well-organized library, subscribers won’t have free rein to tap into whatever they can find on the Net. Instead, it plans to limit them to the sites it chooses, starting a first with only a couple. Such a walled garden approach might simplify things for viewers, but it ignores how rich a source the Internet has become for movies, television and user-generated video.

Sezmi’s customization extends to advertising, too. Wiser said the company plans to enable marketers to target pitches to viewers according to their profiles, which will be influenced by what they watch through Sezmi. That sort of monitoring and behavioral targeting could strike consumers as unacceptably intrusive, but Wiser said no personally identifiable information will be disclosed to advertisers. ‘It’s all opt-in,’ he added. Targeted ads command higher fees, generating more revenue for content providers and broadcasters, Pati said.

The company expects to have the over-the-air and broadband capacity needed to reach 100 million households by 2010, Pati said. Its target markets are the tens of millions of families that have been late to the digital TV party -- those who’ve stuck with analog cable or rabbit ears -- or who move into new homes. Reflecting that focus, a big part of its pitch is simplicity, or how easy its gear is to set up and use. Ultimately, though, its success will hinge on how much people crave the different experience Sezmi’s software can deliver. If viewers don’t see much of an upgrade in TV 2.0, Sezmi will be left competing on price alone. And when you’re challenging an entrenched incumbent with deep pockets, that’s not much of an advantage.

Note -- the original version of this post misspelled Buno Pati’s first name. Many apologies.