Let's start with the setup. They're getting content to you in three ways. The vast majority of TV viewing is of the major broadcast networks: ABC, NBC, CBS, Fox. Happily, they're broadcast for free over the public DTV waves. That subwoofer looking thing? That's a DTV receiver for that picks up all of those broadcasts. Second, they're working on content deals with cable channels, which be delivered via private broadcast (via satellite, actually) that your receiver also picks up. The final leg is video delivered over broadband, to the box, which is also a DVR with a terabyte of storage: Some of the broadband pipe will be used for the cable content (depending on the load vs. private broadcast), but it's also the pipe for YouTube and net video obviously.

Ideally, you won't know (or care) about where the content is coming from. One of the big things they're pushing, which I don't know people will be able to swallow is the idea of personal portals over channels. Basically, it'll learn your viewing habits and create what are essentially smart playlists of content, drawn from broadcast, cable stored content and internet video, all meshed together—kind of like TiVo on Web 2.0 crack, since it has a TV Guide menu with a list and times of shows and whatnot as well, but decentralized from the channel metaphor. Each person in the house has their own button on the top of the remote and it'll switch to customized programming for them. The web 2.0 business comes in not only with the streaming video stuff, but you can recommend shows and content to other users. Channels can also have their own portals, kind of like hyper web pages oriented around their shows and on demand video content. (It's in this sense that it wants to kill TV as you know it.)

Of course, contextual ads are part of the personalization shebang, but I thought they were done well, and at this point, it's part and parcel of anything of that nature. Plus, the ads combined the whole freeness of the broadcast networks over the public DTV waves equal cheapness—supposedly half the monthly rate of cable, though they wouldn't get more specific than that.

All of that sounds (sorta) great in theory, but for one, I think it's too complicated for the average consumer, in the sense that they're still pretty grounded on the channel metaphor. Ironically it's the non-attached, non-HD-fanatic that they're targeting here—your aunt and uncle, maybe not your grandmother. I don't know if they'll bite.

The other issue is more on the business end. They've gotta sign a lot of deals to make this happen, both with content partners (I neglected to mention any like CNN or ESPN because Sezmi hasn't announced any deals yet, though some are in place) and with a front-end partner. That is, you're not gonna go out and buy a Sezmi box. What you would buy, for instance, is a Sprint box made by Sezmi as part of a triple play package (WiMax would go great with the service actually, too bad infrastructure isn't there). And neither AT&T nor Verizon will sign up, they've got their own video dealios.

The backend is also, like I said, extremely complicated—anyone remember Moviebeam? They tried a somewhat similar trick with riding the public airwaves. On the other hand, they have some serious talent on the board and there's a lot of promise in the ideas and concept, but I can't shake the feeling we might looking at another Moxi, if only because of the business end. I hope I'm wrong.

They're starting trials now in a couple of areas, though NYC isn't one of them, with the hopes of a wider rollout by the end of the year.

SEZMI UNVEILS NEXT GENERATION TELEVISION OFFERING
The first complete TV 2.0 offering that seamlessly integrates traditional television with movies and Internet video, optimized for on-demand viewing and is personalized for the viewer

BELMONT, Calif. - May 1, 2008 - Sezmi Corporation (formerly known as Building B, Inc.) today unveiled a next generation television offering that includes many industry firsts. Sezmi also announced that it is commencing trials in pilot markets in preparation for commercial launch with broadband service providers and national retailers later this year.

Sezmi is designed to address fundamental shifts in consumer television viewing behavior and is the first television offering that is:

• A complete TV 2.0 solution: Sezmi delivers all television content, including broadcast and cable network programming, movies and Internet video, in one simple package, unlike Internet-driven offerings that do not include traditional television.

• Optimized for on-demand viewing: Sezmi embraces the migration of consumer TV viewing away from appointment-based viewing and gives consumers the flexibility to watch what they want, when they want. Sezmi's primary user interface organizes content as program lists (e.g., My Top Picks, My Genres, My Channels) that dramatically simplify the browsing and discovery of television content.

• A seamless integration of live, stored, on-demand and Internet video: Sezmi removes the artificial barriers between content from different sources and provides a single and consistent interface across live, stored, on-demand and Internet video.

• Personalized and tailored to the individual viewer: The Sezmi remote control has unique buttons for individual members of the household. Each user is presented with a personalized homepage-like screen that organizes a line-up of content that is specifically matched to the user's routines and preferences.

• Extending the benefits of social networking to the TV: Sezmi subscribers can share playlists with friends and family, contribute to community ratings of shows and benefit from community recommendations.

• Designed for self-installation: Sezmi is a simple, out-of-the-box wireless product that provides consumers a high quality television experience in minutes.

"Consumers are waiting for the television industry to catch up and meet their demand for flexible, advanced and personalized features in their television service, just like they've come to expect with the Internet, wireless communications and digital media," said Kurt Scherf, vice president and principal analyst with Parks Associates.

"With the impending digital transition, the consumer shift to on-demand viewing, high definition, Internet
video, and other disruptions, now is the time for a true television alternative to emerge. From what I've seen, Sezmi's differentiated approach, leadership and industry relationships makes it a strong contender to fill this void."

"Sezmi focused on the television consumer and built an entirely new television offering from the ground up to meet the needs of viewers that want a premium experience at an affordable price," said Buno Pati, Sezmi co-founder and chief executive officer. "We have rallied support across multiple industries and are excited to work with our partners to offer a new and differentiated TV choice to consumers."

A Unique Approach to TV 2.0
"To deliver the full range of content that consumers expect at an affordable cost we had to create a network that overcame the limitations of broadband and better aligned with mass market content consumption," said Phil Wiser, Sezmi co-founder and president. "Our integrated solution seamlessly combines the efficiency and scale of broadcast delivery with the interactivity and access of broadband. As a result, we are able to deliver a next generation television experience to a much larger group of consumers, and we can do it today."

Sezmi has developed the FlexCast™ video distribution technology that combines terrestrial digital broadcast television with existing broadband infrastructure to cost effectively deliver video content. The system utilizes available capacity in existing digital television broadcast networks and creates a private, secure broadcast transmission for content. The resulting platform provides a breakthrough television experience without
the need to upgrade existing broadband infrastructure. Sezmi has also developed a cutting edge, smart antenna indoor reception system that makes both its private broadcast and existing terrestrial TV broadcasts accessible in an unprecedented manner. This network-attached reception system can be placed in any location in the home and requires no user adjustments.

A Multi-Industry Opportunity
Sezmi is working with leaders in the broadcast, broadband, content and advertising industries to create an entertainment platform that delivers enhanced value and new opportunities as the TV industry navigates through the major disruptions it is facing. Sezmi affords broadcasters the opportunity to realize significant returns on their digital investments through a proven subscription television business model and targeted advertising. Sezmi has entered into agreements with broadcasters in its initial launch markets.

"Sezmi's innovative platform enables broadcasters to enhance their core service, while creating new revenue opportunities," said Colleen B. Brown, President and CEO Fisher Communications. "Advertisers continue to tell us they want this type of measurable targeting to generate greater efficiencies on television and as broadcasters, we need this type of audience intelligence to more effectively connect our viewers with new programs."

As an end-to-end television service that incorporates an integrated broadcast solution, Sezmi is the ideal triple-play video companion to voice and data services offered by broadband service providers. "Sezmi creates a unique opportunity for Internet service providers and telecommunications companies looking to offer customers a differentiated triple play with its on-demand, personalized and affordable video service," said Jeff Gardner, president and CEO of Windstream Communications. "Unlike IPTV, Sezmi's innovative service utilizes the existing broadband network and does not require a significant capital infrastructure investment."

Sezmi enables content companies and advertisers to capitalize on current industry disruptions to create new business opportunities. Content providers are able to reach additional viewers, enhance their brands in an on-demand environment and drive higher CPMs through targeted advertising. Sezmi creates a unique opportunity for content companies to engage with viewers and strengthen their brands as consumers migrate towards an increasingly on-demand experience.

"Advertisers are demanding Internet-like efficiency with TV advertising. They want to target the right customer with the right ad, and have accurate data on viewer response," said Tim Hanlon, Executive Vice President of Denuo Group, a Publicis Company. "Sezmi is a breakthrough service in this area. For the first time, advertisers will know
exactly who—whether it's mom or dad or the kids—watched their commercial. Sezmi will enable improvements in advertising effectiveness and ultimately increases marketing ROI, two important goals in today's cluttered ad landscape."

Sezmi has established partnerships with broadcasters, broadband providers and contentcompanies to commence technical trials in preparation for commercial launch across several major U.S. markets later this year.

About Sezmi
Sezmi Corporation has developed the first complete TV 2.0 offering by combining traditional TV content, movies and internet video in a single easy-to-use product. Designed from the ground up with next generation TV functionality, Sezmi puts consumers in total control with a personalized on-demand viewing experience. Sezmi is working with partners from broadcast, broadband, content and advertising industries to create a new TV choice for consumers. Sezmi will be offered to consumers through broadband service providers and national retailers. For more information, visit www.sezmi.com

Warner's been toying around with it for a little while and been increasingly open to internet distribution, so it doesn't come as a major surprise. Interestingly, according to their numbers, offering same-day releases on the internet only eats into DVD rentals by 3-5 percent, and actually increases sales. Plus, online rentals/sales double bring them more than double the profit margin of physical discs, so everybody wins, except for Blockbuster. (So Hollywood really does have nothing to fear from online distribution.)

The best news though? Head of Warner's home video said that they're trying to make online rentals "at least as lenient" as grabbing a DVD from Blockbuster, breaking open that 24-hour window. Now that would be a deathblow for Blockbuster. [Bits]

No, p2p is no longer the single biggest traffic whore, responsible for only 20 percent of total traffic. It's streaming video, like YouTube and Hulu, which is now 50 percent of total traffic. During peak congestion—the times when Comcast will slow you down for hitting the pipe too hard—70 percent of it is http.

Which explains Comcast's flip on network management and why it's a total smokescreen. P2P is no longer the number one leech on networks, it's streaming video across regular old http. So they don't need to throttle p2p exclusively anymore—they need to slow the whole pipe down, hence the new "protocol agnostic" scheme. But they can look good showing off how much they love p2p. It remains to be seen how much of it the FCC will eat up. [GigaOM]

They're mercifully short, but you get hit with about three per episode (marked by the little white lines in the timeline), though you have a limited ability to jump around the ep to sorta avoid them. Still, they're less intrusive than the pop-ups that assault you at AllSP.com or the like. Which is probably a big part of why they're doing this—the online audience for South Park is huge, with lots of sites streaming eps and major torrent traffic. So why not get a slice of that ad revenue?

Ads are going to be a part of any free TV online equation, unfortunately. So are rights issues—for some reason the Britney ep is already available, but the first episode of the current season won't be up until April. WTF? But all in all, they get it as right as an official channel can for the time being, which looks startlingly like a glimpse at the future of TV. Update: Another reason living in Canada sucks: No access for Canadians. [South Park Studios]

The only people who aren't getting cut in to the infinite viewing parade are the cheapos who only rent a pair of DVDs a month for $5. Whether or not turning the stream access into a smorgasbord is enough to fend off the looming iTunes threat is doubtful—Mac-compatibility would be a nice little shot to the balls, though—but it's not like Netflix is totally without a battle plan for the infinite format war. [SF Gate/AP]

As we mentioned when we first introduced the MatrixStream to you, the catch to obtaining this remarkable streaming H.264 video using MatrixStream's MX-1 set-top box (pictured above) is that you must have a 6Mbps (megabit-per-second) broadband connection. That's what it'll take to watch 1080p videos on the system, and not a megabit less. For 720p HD, you'll need 3Mb, and for regular old 480p DVD-looking stuff, that'll need 1.5Mb per second.

Well, and then there's that other catch, enticing content creators to allow their movies to be moved over the thing. We're not holding our collective breath waiting for that to happen. But it gives you a good look at what might be pretty commonplace two or three years from now.

Reminds us of Vudu, doing almost exactly the same thing with standard def, with HD (albeit 1080i) downloading available now and instant HD reportedly on the way. Even though the $400 Vudu set-top box also has content issues, still, the future looks bright for this kind of tech. [MatrixStream]

The big question for those of you who bravely bought in: Will my bastard child videos still work even with the permanent closed sign in the store's window?

The videos you purchased and downloaded are yours to keep. Yes, you can play your videos as many times as you wish on the computer you used to download the videos. Due to licensing restrictions, you cannot copy or transfer your video files and play them on a different computer.

The store's sudden death actually isn't too surprising even though it was less than a year old and the first one to sport content from the "big six" studios. Who thinks "Wal-Mart" when they think "video downloads," and wants to deal with a clusterfuck of DRM, WMV files and Windows and IE-only compatibility? (Not Hollywood types!) Besides, its goose might've been cooked anyway when iTunes finally snagged a video rental deal.

On the other hand, its online music store is still going strong, or at least going enough to try to pressure labels to sell MP3s through it, though it looks like Amazon has the upper hand (in more ways than one.) Let's hope they weren't taking any cues from their cubicle mates in the vid store department! [Wal-Mart, Thanks MarktMan!]

As Ars called it, Hulu is a "corporate sandbox" loaded with content from NBC, News Corp., Sony, MGM, as well as their various subsidiary channels like FX, Sci-Fi Channel and so forth, offering anything from full episodes of Battlestar Galactica and Buffy to SNL Digital Shorts and an entire Russell Crowe flick, Master & Commander. It's Flash-based, it streams, just like YouTube, and it's ad-supported, with bumpers and "commercial breaks," just like the TV it's trying to ape. Despite the potential of being a corporate bomb, Hulu actually succeeds in a lot of ways. For one, the interface is pretty slick, the site itself not overwrought and easy enough to navigate, which is something of a miracle given how FUBAR productions of this sort typically turn out. The animations are smooth, with lots of scrollover popups and transparency, and buttons for all of the few things you can do with a video. Grays and blacks surround the video in a widescreen format, making it easier on your eyes.

Video and sound are clean, the 520x295 resolution for widescreen format clips definitely tolerable for the 42 minutes required to watch House or the like. More importantly, the streams have been exceptionally smooth. Bouncing around within vids is snappy, on few occasions taking longer than a second, and more often than not instantaneous. However, and it might be my imagination, video isn't quite as nice as it was on launch day a few days ago—a touch more pixellated—and seeking takes a bit longer. Still impressively small, more noticeable now.The potential deal killer here, the ads. (Also the best reason to wait for a review: I saw nary a frame of ads on launch night.) Their timing seems to be totally random. The initial three-second bumper is painless, promising "limited commercial interruption" thanks to X sponsor. But the in-show ad—so far in my experience no more than one 30-second clip per episode—could come at any time: within seconds of the bumper, halfway through, the first time you click ahead or so on. In that sense, it's maddening.

So why put up with ads? The content—and that's where Hulu's value and potential lies, but also its biggest shortcoming. Ars' problem with Hulu was the fact that it was a sandbox. I don't think that's necessarily bad, depending on what's in the sandbox and the playground rules—and what you expect to get out of it. I actually don't care to pull content out of Hulu's garden, beyond embedding clips on Gizmodo—I just want to be able to catch the Heroes ep I missed or peek a show I've heard about with a couple of clicks and no waiting.

Shortfall #1: It doesn't put shows up quickly enough after they air. It's still faster to grab a torrent right after Heroes airs on the East Coast than to wait for it to drop on Hulu (not that I've done that, lovely denizens of NBC's legal department). Solution? Air it on both simultaneously. It'll also help solve the tricky dilemma of measuring new vs. old, medium-shifting viewers.

Shortfall #2: It's an incomplete archive, with new episodes pushing off older ones. This is a balancing act because they don't want to cannibalize TV-on-DVD sales, but personally, if I haven't already bought a series on DVD I'm not going to. For instance, Buffy Season One is available in its entirety, but nothing beyond that, even though I wanna watch the musical episode. Heroes now only stretches back to the second ep of the current season.

The truly bold step to take in this little experiment is to throw open the content doors: Put up everything, and watch what happens. My guess is that it wouldn't adversely affect DVD sales—maybe iTunes, but according to NBC, they weren't making any money there anyway. Hell, throw in two thirty-second spots per clip, but bump the resolution. In other words: Make it more like TV.

"We don't want to replace the dollars we were making in the analog world with pennies on the digital side." Given that NBC apparently only netted $15 million in the last year of its deal with Apple despite accounting for 30-40 percent of video content sold (depending on whether you ask NBC or Apple), all the other contract sniggles aside, it's no wonder they bolted for Amazon—who probably ponied up a sweeter revenue sharing deal—and Hulu, where they'll have a sizable chunk of ad revenue. [Variety, Thanks John]

You need a speedy broadband connection (at least 3Mbps); fast-forward can be wonky; like every other distributor the scope and selection its ever-changing catalog of 5k flicks is at the mercy of Hollywood studios. Stay tuned for own review, but if you're feeling hasty you can go ahead and slap down your $399 now. [NYT]

The piece alludes to "grumbling about Apple's prices" by Hulu's other daddy, News Corp., lending more weight to the possibility of a larger revolt against Apple sparked by the NBC walkout/booting. If News Corp. followed them to Unbox (its iTunes contract is also supposedly coming due), the video download market would become much more interesting. Unbox would gain some needed content firepower and the networks would be working with a distributor more beholden to them—and one with a direct line to millions of TiVos.

This party's so just getting started. [NYT, HuffPo via Tubewad]

"People familiar with the situation say Mr. Stringer has been laying the groundwork in recent months to shift the company's focus to video downloading." In a nutshell, Sir Howard's pushing more cooperation across units and heightened hardware/software Zen, seeing them as necessary to establish dominance in the primordial soup that makes up the video download market right now.

But, proving that Sony's still Sony, Stringer "personally enforced a decision to adopt certain digital rights management software that will eventually be used in all of Sony's products." Guess there's still a few things Sony has left to learn. [WSJ]

WiMAX seems like an ideal delivery method, given the range it covers and its beefy bandwidth, so what Building B wants to do is definitely possible. But, the service launches in the fall, and WiMAX won't exactly have most of the country blanketed by then.

Either way, their vague assertions without hard specifics leave Om Malik (and us) "inherently skeptical of their claims." Topping off our saucer of skeptic's milk is the fact that their targeted ad partner is Claria, better known in its past life as Gator Corporation, proprietor of the eponymous adware client that plagued tens of millions of PCs in the late '90s.

The bottom line is that we'll believe in the One True Box when it's sitting atop our TVs—we've heard way too many empty promises from far too many prophets to be true believers before then. [Building B via NewTeeVee/GigaOM]

In the deal, Blockbuster also picked up the rights to show flicks owned by Movielink's now-former owners, which include Warner Bros., MGM, and Paramount, giving it something of a leg up on Netflix's service, which has a slightly limited selection.

The war's only going to get uglier until it gets better, and by better, we mean when Netflix rolls out that set-top box we've been drooling over for God knows how long. [NYT]

Movie content is provided by Twentieth Century Fox, Paramount, Warner Bros., and MGM, and will sit alongside free videos uploaded by users. Exceedingly lame, however, is that all of the studio movies are rentals only, imploding 30 days after you download one or a day after you start watching it.

New flicks go for $3.99, older ones for $2.99. TV show stuff is standard—$1.99 to buy (and keep). Since they're wrapped up in Windows Media Player DRM, you can guess where, how and on what they'll play (or not). Observation: Microsoft must be making a killing licensing their DRM to people, since most of the big digital movie distributors other than iTunes use it.

While overall I find these services to be ill-conceived, limiting and wholly unsatisfactory, if you do decide to buy crippled, overpriced content, a NYT test showed that thanks to BT's p2p setup, it took less time to download a movie than it did from Wal-Mart. Moreover, it seems to solve the issues that the Xbox 360 download service ran into on the first day.

The real question is: "Can BitTorrent compete against itself?" The BT network already offers a vastly superior catalog of content without restrictions (or cost), albeit not so legally. Something else to consider: since they're using your bandwidth to distribute content users pay for, why aren't purchases subsidized according to how much someone uploads?

Verdict: Call us when someone launches a store that offers content worth paying for. Unfortunately, Hollywood doesn't seem so keen on making that happen. – Matt Buchanan

Software Exploited by Pirates Goes to Work for Hollywood [NYT]

Quality depends on the users bandwidth, which can range from 1-3mbits, the higher equating to DVD quality. A stream can be watched in 10-15 seconds. The new service will rollout to about 250k users a month, as they scale up their delivery service to satisfy the entire Netflix user base of 6 million. That should happen, according to the website, by June.

IP video livingroom solutions by Sony, Apple, Microsoft and all the cable providers are on their way or here. So, we'll see how fast Netflix jumps to the livingroom. Could be time for that Netflix Set Top box we asked for at xmas. –Brian Lam

Netflix [Netflix]

I know the Jetsons got us all geared up for the videophone, but I have to admit, I've never been a big fan. First of all, companies have been trying to perfect this technology for like 10 years and its still kinda crap. Never as good as it looks on any given TV show that tends to promote it. Plus, as you Gizmodo readers may not know, I work in my pajamas, which would really suck in video. But looks like Grandstream Networks is trying its hand with the GXV-3000 video phone, powered by Texas Instruments programmable DSPs and based on the SIP standard. Featuring the H.264 real-time video codec, an advanced high resolution camera sensor, and a 5.6-inch TFT color LCD, it supposedly gives you faster frame rates, higher resolutions and real-time, good-looking streaming video. So the person you're talking to isn't saying one thing and mouthing another. Also comes with hands-free speakerphone with acoustic echo cancellation, dual 10/100Mbit/s Ethernet ports, 2 USB ports, 2.5mm headset jack, and RCA A/V output jack to allow simultaneous video output to TV. Goes for about $300.

Grandstream Networks IP Video Phone [Bios Magazine]